Producers of household items have been India’s best stock market bets for years. But the consumption slowdown in the world's fastest-growing major economy is rubbing the sheen off these shares.

The 74-member S&P BSE Fast-Moving Consumer Goods Index, which has had only one down year since 2006, has bucked the gains in the nation's benchmark measure. Some of the biggest names in the gauge have accumulated double-digit losses five months into the year.

The consumption engine is sputtering as the cash crunch caused by the crisis in the shadow-banking sector has curbed spending even on staples after hurting demand for cars and homes. Hindustan Unilever Limited (HUL) , whose soaps and detergents are used by nine out of 10 Indian households, in an analysts call on Friday pinned the deceleration on weak rural demand and said it is unable to say when the buoyancy of the past would return.

When a generally-measured management like HUL’s uses the term recession in its comments in the post-result presser, it generally is not a one-quarter blip, analysts led by Rohit Chordia at Kotak Institutional Equity Research wrote in a note on the weekend.

The company’s volume growth slowed to seven per cent in the March quarter after five straight quarters of double-digit expansion. Growth for Dabur India Limited during the period was 4.3 per cent compared with about eight per cent a year earlier. Britannia Industries Limited grew seven per cent, versus 11 per cent, and Godrej Consumer Products Limited posted a one per cent increase in its domestic branded-business volumes.

The market is repricing the growth outlook. HUL has declined 5.8 per cent in 2019, Godrej Consumer 21 per cent, Britannia 15 per cent and Dabur 11 per cent. The S&P BSE Fast-Moving Consumer Index trades at a 12-month blended forward price-to-earning of 32, higher than its five-year average, signaling potential for further contraction in values.

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