Now Reading: Sector cycles shift every 2-3 years; IT, FMCG cheap
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Sector cycles shift every 2-3 years; IT, FMCG cheap
Data from Bandhan Contra Fund's NFO presentation, tracking sector performance from 2017 to 2026, shows market leadership shifts rapidly. Media was out of favour for nearly eight consecutive years, the longest stretch,…
The Story in Brief
Data from Bandhan Contra Fund's NFO presentation, tracking sector performance from 2017 to 2026, shows market leadership shifts rapidly. Media was out of favour for nearly eight consecutive years, the longest stretch, while realty, metals, power and pharma frequently topped the list. PSU banks made a sharp comeback after 2020 but fell out of favour again by 2026.
Mayank Jain of Share.Market by PhonePe said no sector holds a top-five position for more than 2-3 straight years, arguing against buy-and-hold sector bets. Tanvi Kanchan of Anand Rathi added that an out-of-favour sector without a visible earnings catalyst is a 'value trap'. In 2026, IT and FMCG trade at 33.6% and 22.8% below their five-year average P/E, making them attractive on valuation, though both face headwinds: IT from weak Western discretionary spending and FMCG from domestic challenges. Metals, trading 64.6% above its average, is a sector to avoid.
The Indian Opinion
The glib narrative that any out-of-favour sector is a buy ignores hard lessons. Media was unloved for eight years before turning, yet without earnings triggers such a bet is a value trap. Equally, blindly chasing last year's top sector, metals, now trading 64% above its five-year average P/E, invites pain. The real test: can IT and FMCG, despite trading at steep discounts, show earnings recovery in a weak global demand environment? Watch their next quarterly margins.
Source: livemint.com
This story was synthesised by AI from the source linked above.
