FMCG stocks see sharp buying interest on Budget proposals; Godrej Consumer Products top gainer

Shares of FMCG companies rallied up to 7 per cent in Saturday's session amid sharp buying in the pack after the budget 2025 increased the income tax exemption limit to Rs 12 lakh per year under the new tax regime. As per analysts this is a big relief for the middle and lower middle class as it will likely result in higher savings, and drive consumption.

Overall, the move is considered to cushion the impact of rising inflation and lessen the financial burden on the middle class. By and large, the Union Budget proposals have prioritized consumption through personal tax cuts even while staying the fiscal consolidation path.

Post the development, Nifty FMCG emerged as the top sectoral gainer, with gains of nearly 4 per cent at the last count.

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Barring Balrampur Chini Mills, all the other 15 key constituents traded with remarkable gains of between 1-7per cent. Varun Beverages led the pack with gains of 6.5 per cent, followed by Godrej Consumer Products, Britannia, United Spirits, Colgate Palmolive and ITC which traded higher by 4 per cent.

Pranav Haridasan, MD and CEO, Axis Securities said, "Sectorally, this budget is particularly positive for consumer and consumption-driven stocks, which have underperformed recently but now stand to benefit from a demand revival."

Tax slabs have been rationalised in personal income tax, increasing the purchasing power of the consumers. Demand will get a boost specially in consumer discretionary items like FMCG, auto etc, added Sandeep Bangla, CEO - TRUST Mutual Funds.