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 Corporate commentary in the quarter gone by lacked any concrete evidence of pickup in rural demand which reflected in the underperformance of the FMCG sector in every time frame in last one year, JM Financial Institutional Securities said in a report.

Risk-on sentiments are still prevalent in 2024, as is evident from the small and mid caps outperformance over Nifty in last one month. However, we continue to believe that 2024 would be the year of large caps over SMID, as asset allocators would prioritise valuation comfort. On a sectoral level, most notable outperformance came from utilities (13.5%), energy (13.4%) and pharma (10.2%) while FMCG underperformed the benchmark in every time frame (1W/M/Y) in last one year, the report said.

66% of the companies in JMFL coverage universe have either met or beaten expectations in Q3 FY24. Revenue growth of 5.7% YoY in companies under coverage (exc. BFSI) missed estimates by 2.3%. EBITDA margin of 17.5% exceeded expectations of 16.7%, but has tapered sequentially (18.7% in Q2FY24). Margins exceeded expectations in sectors like ports, metals, oil & gas and utilities while chemicals and media missed expectations, the report said.

Emerging market equities gained 4.7% in last one month, while Nifty (2.9%) underperformed the EM and DM basket by a wide margin. Entire commodity basket reverted with a gain of 3.2%, while crude prices were up 5.1%.