Volume growth should hold up FMCG P/E multiples: Analysts at Credit Suisse

The BSE FMCG (fast moving consumer goods) index has outperformed the Sensex in six out of the last 10 financial years, including year-to-date performance in FY18.
 
The strong show of the consumer sector is on the back of multiple re-rating rather than earnings growth. Thus, while earnings growth for the top consumer stocks has been 13 per cent, their returns have been a sharper 24 per cent.
 
Analysts at Jefferies said the consumer goods space has seen a sharp multiple rerating after FY09 as average one year forward price-earnings (P/E) multiple of the sector improved from 22 times