The dry spell in August has caused downtrading in the fast-moving consumer goods (FMCG) sector in India. Buyers are shifting from larger packs to smaller ones due to financial stress and inflationary pressures. Smaller packs have grown at a faster pace than mid or high-priced packs across most FMCG categories. The rain deficit in August is believed to be fueling this downtrading phenomenon.
The downtrading phenomenon, where consumers switch to purchasing smaller product sizes due to financial difficulties or rising prices, has intensified in the fast-moving consumer goods (FMCG) sector. Data from retail intelligence platform Bizom shows that smaller product sizes have experienced more rapid growth compared to medium or high-priced alternatives across most FMCG categories.
So I am really watching closely. That stock, the RSI for example, for RIL would be sub 30 right now, which means it enters the oversold territory. And that should put it in a point where we start seeing it pick up and contribute to the indices.