Divam Sharma, Co-Founder of Green Portfolio, is advising caution on FMCG and quick-commerce sectors, citing high valuations and intense competition. He warns that a busy IPO pipeline may drain liquidity from the market, potentially impacting secondary stock performance. The firm suggests focusing on fundamental earnings growth and considers gold as a defensive hedge during this volatile period.
Divam Sharma, co-founder of Green Portfolio, has issued a cautious outlook for the fast-moving consumer goods (FMCG) sector, suggesting that current stock valuations in the space have outpaced underlying business growth. As the market enters a phase where earnings performance—rather than just valuation expansion—is expected to drive returns, the firm highlights that several FMCG companies are facing pressure from volatile agricultural input costs. If companies lack the pricing power to pass these rising costs on to consumers, profit margins may face significant pressure in the coming quarters.
Beyond traditional consumer goods, the firm is also advising a cautious stance on new-age tech and quick-commerce companies. These sectors are currently defined by aggressive pricing wars and the need to scale operations rapidly. With well-capitalized giants such as Amazon and Flipkart dominating the space, the path to sustained profitability for smaller, emerging players remains uncertain. Investors are advised to look for clearer evidence of healthy unit economics—the ability to turn a profit on each unit sold—before considering exposure to these high-growth, high-burn business models.
Another factor potentially influencing market liquidity is the heavy pipeline of upcoming initial public offerings (IPOs). Green Portfolio notes that a concentrated wave of new listings often acts as a structural headwind for the broader market. When significant capital is redirected from the secondary market toward new IPOs, existing listed stocks can face short-term pressure. Investors may watch whether this shift in capital allocation creates increased volatility in broader market indices.
In this environment, Green Portfolio suggests that investors pivot toward defensive strategies. Gold is being highlighted as a potential hedge against macroeconomic uncertainty and shifting global supply chains. Rather than betting on sector-wide trends, the firm advocates for a disciplined, selective approach focused on specific companies within the small- and mid-cap spaces. The goal is to identify businesses where fundamental earnings growth remains strong and valuations have not yet reached historical extremes. The key monitorable for investors in the coming months will be how companies manage input cost inflation and whether the expected market liquidity holds steady despite the busy primary market pipeline.