Why FIIs are back in consumer durables

Bullish signal

- Dipti Sharma [e-mail]

Foreign institutional investors (FIIs) reversed the four-month selling streak in December, turning net buyers of Indian consumer durable stocks with purchases worth $438 million.

“This reversal may mark the beginning of a more substantial reallocation of global funds towards Indian domestic themes,” said Vipul Bhowar, senior director and head of equities, Waterfield Advisors.

The main reason for the bullish outlook is the expected increase in earnings in the second half of fiscal year 2026 (H2FY26), he said. Many companies are projected to see a 20-30% rise in profit after tax (PAT), fuelled by strong festive-season sales and reduced raw material costs. While valuations may have limited upside, the earnings growth in these companies could surpass expectations, said Bhowar.

The renewed buying interest from foreign investors comes after the sector’s recent underperformance. The BSE Consumer Durables index fell about 1% over the past year, lagging the 12% rise in Nifty 50.