
Starting 2025 with two defensive titans of the stock market

Summary
- Global rate cuts, a possible RBI rate cut, and increased budget spending to boost rural demand could catalyse stocks of fast-moving consumer goods companies next year.
As the year draws to a close, the benchmark Nifty 50 index is wrapping up with a modest 9% gain. Despite active sector rotations, defensive sectors underperformed, with the FMCG index—known for its resilience—remaining flat to negative.
Having said that, Profit Pulse has identified two standout defensive stocks that could offer stability and promise, making them valuable picks for navigating an uncertain market landscape.

With the Reserve Bank of India holding steady on its key policy rate while global rate cuts are underway, investor attention is on the upcoming Union budget for 2025-26. Focusing on consumption-driven sectors could unlock opportunities as government policies aim to boost demand.
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Hindustan Unilever Ltd
In 2024, Hindustan Unilever Ltd (HUL) has recorded a -11.40% return, marking its first negative annual performance in 21 years. However, several technical indicators suggest a potential upside in the near future:
Support from a rising trendline: Holding strong since April 2023.
Breakout re-test: The falling trendline has been successfully retested twice.
RSI divergence: The 14-period relative strength index (RSI) shows a three-bar divergence, signalling a potential reversal.

HUL’s share price has corrected sharply from ₹3,000 apiece to ₹2,320 within just three months. However, based on the earlier observations, this level appears to be a strong bargain-accumulation zone. At this juncture, multiple short-term and long-term supports reinforce the potential for a rebound.
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ITC
After outperforming in 2023, ITC Ltd has delivered a modest return of 3.70% in 2024. However, the daily chart reveals promising bullish signals:
Bullish breakout: The stock has broken out of a falling channel pattern.
Double-bottom formation: The price is on the verge of breaking out from a bullish double-bottom pattern.
200-day moving average: Prices are holding firmly above the 200-DMA.
RSI strength: The 14-period RSI is trading steady in the bullish zone.

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FMCG stocks: Gearing up for promising opportunities
- The Nifty FMCG index underperformed this calendar year, making it a potential contra-investment play as sectoral rotation gains momentum.
- Global rate cuts, a possible RBI rate cut, and increased budget spending to boost rural demand could catalyse stocks of fast-moving consumer goods companies.
- HUL and ITC stand out as strong contenders, with both showing robust technical and fundamental indicators that suggest promising returns in the near future.
In spite of all that transpired in 2024, the Nifty has still logged in a 9% return so far. While no one can predict the future with certainty, it seems likely defensives may be one way to go. And within that, the FMCG sector, and the two stocks identified above, could be interesting stocks to add to your watchlist for 2025.
For more such analyses, read The Best of Profit Pulse in 2024
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is head of the technical and derivative research desk at Jainam Broking Ltd.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article. However, clients of Jainam Broking may or may not own these securities.