Budget 2019: Are the beaten-down auto and FMCG stocks good investment bets?

At the bourses, stocks of both these sectors have underperformed. On a YTD (year-to-date) basis, the Nifty Auto index has slipped 13 per cent, while the Nifty FMCG index has slipped 3 per cent.

The outbreak of IL&FS crisis in September 2018 and the subsequent liquidity squeeze in the system derailed the growth story of various sectors of the economy. While the auto industry continues to move in reverse gear, other consumption-related sectors such as consumer staples and FMCG (fast moving consumer goods) also seems to be in the limbo owing to an array of headwinds.

The near-term outlook, too, looks gloomy for the entire consumption theme, though things are likely to change for better in the second half of the fiscal year 2020 (H2FY2020), analysts say. A normal monsoon and a consumer-centric Budget