Defensive sectors emerged attractive bets in 2012-13!

Siddharth Tak / Zee Research Group/ Delhi

In the financial year 2012-13 (FY13), Sensex and Nifty generated marginal returns of 8.23 percent and 7.31 percent respectively. This does not inspire confidence! But from investors point of view had they invested in stocks of defensive sectors like FMCG and Healthcare then they would have made handsome gains as Bombay Stock Exchange (BSE). FMCG and Healthcare index rose 31.74 percent and 20.86 percent respectively. This clearly illustrates that these indices had outperformed the markets in FY13.

Explaining the rationale behind the excellent returns provided by FMCG and Healthcare sector, Sudip Bandyopadhyay, President, Destimoney Securities, opined, “FMCG and Healthcare sectors are driven by India consumption story and their outperformance will continue unabated. Companies in FMCG and Healthcare sector have optimistic future and their shares will continue to provide healthy returns in this financial year.”

Bandyopadhyay’s thought got an endorsement from Prakash Diwan, chief portfolio strategist at Prakash Diwan Wealth, who averred, “A growing demand in rural market and high disposable income of middle class is pouring demand for FMCG products, personal hygiene products , healthcare products, and cosmetic products.”

Apart from FMCG and Healthcare, other sector indices like InfoTech, Banking and Consumer Durables also did well, gaining a little over 10 percent in FY13. However, BSE Oil & Gas and Realty indices registered meager gains of 2.96 percent and 0.18 percent in FY13.

The poor performance of Oil & Gas sector and other index heavyweights has led to the overall sluggish performance of Sensex. “Oil & Gas and Banking sector has higher weightage in Sensex. Moreover, stocks in these sectors have emerged as laggards in this financial year. Furthermore, this year index heavyweights have not delivered much hence Sensex has reported a lackluster performance,” added Diwan at Prakash Diwan Wealth.

As regards indices laggards, BSE Metal index declined by 22.81 percent, followed by Power index (21.26 percent), BSE Small Cap (12.44 percent), BSE Capital Goods (10.81 percent), BSE Midcap (3.22 percent), and BSE Auto (1.36 percent).

Considering the individual stock gainers in FY13, Wockhardt emerged as the top gainer with gains of 235 percent. Amongst the losers, Glodyne Technoserve lost the most giving up 97 percent.