Want to know about top FMCG Stocks in India, Well you have landed on the right article.
If you are seeking a stock that holds value over the long run, and is relatively less risky, consider FMCG, the fast-moving consumer goods sector. It is one of the most prolific and profitable sectors currently underway in the market.
The potential of FMCG stocks to provide investors with a big gain is well known, so when it comes to searching on Google for the best FMCG stocks to buy, the results are endless.
Meanwhile, if you happen to stumble upon this page while browsing for FMCG companies in India, then you are at the right place to search because you have landed on the right page.
Our team has compiled a list of the top ten FMCG sector stocks you should invest your money into right now. Before we move on, let's take a look at how the FMCG sector in India works.
Best FMCG Stocks (2022)
1. HUL
The annual turnover of HUL's five most profitable brands is more than Rs.2,000 crore each, and the regular turnover of seven of its brands is more than Rs.1,000 crore annually.
In recent years it has grown to become the largest FMCG company in India.
There are a variety of personal care products offered by HUL Group, which can be divided into 12 distinct categories.
These include personal care products, fabric detergents, skin care products, hair care products, oral health products, deodorants, colour cosmetics, beverages, ice creams, frozen desserts, water purification products, and a variety of colour cosmetics.
Factors that affect company share:
In the majority of the categories that HUL is present in, HUL is one of the leading brands. In addition to the millions of Indian consumers who rely on it for their everyday needs, this company has several brands that hold the top two shares of the market in these categories.
The company's product portfolio includes home care products, beauty and personal care products, food and refreshments (19% of revenue), and a variety of other products.
As a subsidiary of Unilever Plc, which is headquartered in the United Kingdom, this company holds a stake of 61.9% in HUL, one of the world's largest consumer goods companies and has operations in 190 countries around the world.
Why to invest
Despite a highly visible brand portfolio over the past few decades, HUL has maintained a leadership position over the years thanks to an extensive distribution network and strong marketing and advertising efforts.
To adapt its channel strategy for its products and market segments, HUL has been leveraging its distribution strengths.
It is the first consumer company in the FMCG sector to surpass a market cap of Rs.5 lakh crore, which makes it the highest market cap of any consumer company.
In the past five years, HUL has maintained a solid ROE and ROCE of 53.8% and 74.4% respectively, which has allowed the company to grow its sales at a CAGR of 7.8% and its profit margins at a CAGR of 14.4%.
Furthermore, the company has been maintaining adequate liquidity as well as paying dividends. By acquisition of the most popular brands such as Boost, Horlicks.
The Food and Refreshments portfolio of HUL has been strengthened, by acquiring the largest FMCG merger in India, GlaxoSmithKline Consumer Healthcare Ltd has begun showing synergies across its food and beverage brands.
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2. Nestle
It stands out from its competitors as a pioneer in the Indian fast-moving consumer goods industry due to its strong market position across a wide range of product categories.
One of the industry's major players, it has a large presence across the country.
Nestle has released a wide range of products under the Maggi brand that are popular among people throughout the world.
Factors that affect company share:
The company's product portfolio comprises almost 85% of market-leading products, including milk products and nutrition products (96% in infant cereals), cooking aids (Nestle EveryDay 44%), prepared meals (Instant Pasta Maggi -69%), beverages (Nescafe 51%), and chocolates and confectionery (63%).
The company has the ability to generate a lot of cash flow in those segments and the company has established well-known brands, in addition to producing a lot of cash.
Moreover, Nestle India's revenue profile is very diverse as well as it manufactures a wide-range of healthy foods, including both milk-based products (milk products) and weaning foods, which account for almost half of Nestle India's revenue.
In the company's revenue generation segment, Nestle India generates 12% of its total revenues from beverages (instant coffees, iced teas, and other beverage vending mixes), 31.8% of its revenue comes from cooking aids and prepared meals (such as Maggi), 14.8% from chocolates and confectionery products (such as Kit Kats and Munchs), and 14.8% from instant coffees and iced teas.
Why to invest
There is no doubt that Nestle is one of the world's biggest players in the food and beverage industry and holds 62.7% of the India business, making it one of the largest players in the world in terms of food and beverage consumption.
In addition to its proprietary technology and strong development capabilities, Nestle India has another advantage, which is that it has access to the research and development capabilities of its parent company, which makes it even stronger than ever before.
As a result of this, in the last five years, the company has been able to grow its PAT at a CAGR of 13.6%. They have also managed to maintain a healthy Return on Equity and Return on Capital Employed, which are respectively 93% and 126%.
Furthermore, they are almost debt free, with a Debt to Equity ratio of 0.13, and on average, they have managed to keep 21.2% effective operating margins.
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3. ITC
ITC has been a tobacco company throughout its history, and has achieved many milestones during that time period.
As a tobacco company, the company was initially formed as a tobacco company, but it has transformed into a conglomerate that has become increasingly successful over the past few decades, offering a broad range of products and services such as fast-moving consumer goods (FMCG), paperboard, printing, packaging, agricultural commodities, hotels, packaged foods with brand names, branded apparel, stationery, safety matches, agarbattis, and many other related businesses.
In the packaged food segment of the company, along with a variety of food items, you will find a range of luxury chocolates, hand-made ghees, nuts, and dairy products at affordable prices.
With the acquisition of Sunrise Foods Pvt Ltd, ITC should be able to further cement its position in eastern markets, which is where spices are being sought after.
Factors that affect company share:
FMCG (other than cigarettes) is one of the fastest growing segments has steadily increased its presence within the company since it started operating in FY20, accounting for the company generates 31% of its revenue from gaming now (up from 26% in FY20).
Also, ITC has been continually decreasing the amount of attention it puts into its cigarettes business, which used to contribute 62.7% of the company's revenues in 2015, but is now contributing only 42% of the company's revenues for FY21.
Why to invest
In response to this, ITC has shifted their focus toward growing its FMCG business, which is now its biggest revenue generator.
As the company has grown in revenue, it has also expanded its presence into agribusiness (26%), paper and packaging (12%), and hotels (1%) sectors. Due to the high level of cash and liquid investments (bonds, debentures, mutual funds, and bank deposits) made by the company, its liquidity is exceptionally strong.
In March 2021, the company had a dividend yield of 4.5%, which is a healthy dividend yield that has consistently rewarded shareholders. As of March 31, 2021, the company had retained a healthy dividend yield of 4.5%.
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4. Britannia Industries
With a market share of over a third in value terms, Britannia is among the leaders in the Indian biscuit industry.
In addition to glucose, Marie, cookies, crackers, cream, milk, and health biscuits, the company offers a diverse range of biscuits across all seven categories, including glucose, Marie, cookies, crackers, cream, milk, and health biscuits.
In addition, it has strong brands across its entire product line, including Good Day, Tiger, Marie, Nutri Choice, and Milk Bikis.
This strong market position is also the result of an extensive network that covers both the rural and urban areas.
In addition to its greenfield unit in Nepal, Britannia has also commissioned additional lines for cake and biscuit production at Ranjangaon in Pune and commissioned a new greenfield unit in Iran.
Factors affecting stock:
The company has tripled its direct sales footprint between fiscal 2014 and 2020 to reach 23.7 lakh outlets, with the number of dealers in rural areas reaching 23,500 in FY21 from only 8,000 in 2016.
It is also planning to branch out into new food categories in the future, and the company has launched new products recently, including cream wafers (10% market share), baked salted snacks, milk shakes, and croissants.
Earlier this year, the company relaunched its popular biscuit brand 'Milk Bikis '(Milk + Glucose) as a means of competing with popular brand Parle-G and eyeing a big share of the market for glucose biscuits.
Why to invest
Over the past five years, the company has seen a healthy CAGR of 9.36% and 17.5%, respectively. In the past three years, Britannia has maintained a healthy ROE of 35.9% and a ROCE of 44.3% respectively.
The company intends to establish itself as a global food company and has established strategic business units for adjacent bakery, dairy and international businesses in order to accomplish that goal.
As a result of the high level of competitive intensity in the last few quarters, new product launches have been quite common in order to gain a competitive advantage.
British Telecom is currently trading at a PE of 51x, implying that it is trading at attractive valuations in comparison to its industry, which has a PE of 59.3x.
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5. Dabur India
As one of the top FMCG companies in India, Dabur India Ltd has also gained a solid reputation.
Dabur India Ltd., founded in 1884, is now a century-old business firm that has been operating since then.
It is safe to say that Dabur India Ltd., existed in the world before NSE and BSE were established.
Factors affecting stock:
Company's ayurvedic medicines and products are made by S. K. Burman, a famous ayurvedic practitioner who has contributed to the development of ayurvedic medicines and products by Dabur India.
Having Dabur as a major supplier of ayurvedic consumer products shouldn't be a surprise, as it could well become one of the nation's largest.
In fact, the Company is gaining global fame due to the growing demand for ayurvedic products that has caused its name to become recognized across borders.
Dabur India Limited has been a major player in the industry for more than a decade through the following main products -
Dabur Hair Oils
Dabur Skincare, oral care
Shampoo
Ayurvedic medicines
Dabur Foods etc.
Dabur Homecare
Why to invest
Besides its highly volatile structure and affordable price tag, this stock has also long been trending for its Ayurvedic niche and its very low volatility.
The price of Dabur India Ltd's products has been characterised as depending on a float of around 500 price points. Dabur India has managed to generate a return on investment of 139% over the last five years.
It seems reasonable to expect that FMCG shares will continue to increase in price for a few years more. Dabur India Ltd is a company that has proven to be a reliable investor in past years, providing solid evidence to confirm the claim.
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6. Godrej Consumer product ltd
In addition to its presence in India as well as internationally, GCPL also possesses strong brands that make it a market leader in the household insecticides segment and hair colour sector.
It is also the second largest player in the soap category in India.
In all segments where the company operates in Indonesia, including household insecticides, air fresheners, and wet tissues, it is a market leader.
Factors affecting stock:
In Africa, GCPL holds the top position in dry hair extensions (hair braids), ethnic hair colour, and dry hair extensions in Africa.
With a 10-12% market share in primary brands such as Godrej No. 1 and Cinthol, GCPL is also the second largest toilet soap marketer after HUL. GCPL has acquired a few companies in the past few years to increase its geographical reach.
With its acquisition of the Darling Group – a leading hair extension company in Africa – it has strengthened its foothold on the region.
By maintaining its strong leadership position across various segments, the company manages to maintain its profitability by maintaining its pricing power in those segments.
Why to invest
A CAGR rate of 10.4% has been achieved by Godrej Consumer over the last five years while a CAGR rate of 5.54% has been achieved by its sales.
During the past five years, Godrej Consumer has also been able to increase its ROE and ROCE by 24.4% respectively as well as 20.3%. In addition to India and others, Godrej Consumer has also expanded its operations into Africa (23%) and Indonesia (17%).
It has been the company's primary method of growth to increase its revenue from international operations through acquisitions, which have been the primary method of growth.
In addition to acquiring strong local brands, GCPL has proven to be able to create synergies through the combination of operations of the acquired entities to increase profitability and scale.
As a result of its international presence, the company is exposed to the possibility of being affected by geopolitical events, including a change in government and local unrest, which may adversely affect the company's operations.
A PE of 39.7x looks expensive in comparison to a market valuation of 30.7x which is the industry's valuation.
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7. Marico Ltd
While the list of top stocks of FMCG to buy is endless, the best ones, like Marico Ltd, are very few.
Despite its relatively small size, Marico Ltd is able to maintain a prominent position on the list.
As a result of creating its presence in major countries worldwide in 1988, the company became a name that has come to be recognized in the FMCG sector.
As one of the leading consumer goods brands, OGX for a long time has been a market leader in the category of beauty and wellness.
Factors affecting stock:
As a result of Marico's activities, the company is making a name for itself in many areas including edible oils, hair care, skincare, immunity-boosting products, and healthy foods.
Since 2010, a high percentage of profits have been generated by the corporation over the past five years except for the year 2020 when the rate of the global pandemic caused its share price to drop dramatically.
It is projected, however, that the Company will earn more revenue and profit by the year 2021 than it has ever before.
Below is a list of a few of the most popular products that are produced by the company.
Parachute Coconut Oil
Saffola
Parachute Advanced Body Lotion
Mediker
Parachute Advanced
Nihar Naturals
Livon
Revive and much more
Why to invest
In order to try to understand the reason why this popular FMCG company is a noteworthy investment deal, let us go through its history. Among day traders, this company has consistently been among the top spot earners.
Despite the fact that long term investors have also started developing an interest in Marco Ltd, the company has set a lifetime high as of October 14, 2021, which has created opportunities for them as well.
As you can see, the price of the shares has risen all the way to 128.84%, almost doubling the investment of Marco investors since April 3, 2020.
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8. Colgate Polive
In 1985, Colgate Palmolive India Limited was founded as a subsidiary of a cross-border corporation in New Jersey.
Its main asset is the sale of Colgate's two biggest brands in India, and it remains a very popular stock in the Indian stock market.
We believe that this is a company, which is known primarily in India for the Colgate and Palmolive brands.
Factors affecting stock:
There is no doubt in my mind that this is one of the best consumer goods companies stocks to invest in as its brand is ubiquitous in the nation, making it an excellent choice for investors.
Why to invest
According to the Company’s historical trading performance for technical charts, it has been building the most excellent platform for so many years for day traders to profit from.
The Company will end the 2020 financial year with 48.18 billion revenue and a net income of 10.35 billion, which is higher than the previous year's results.
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9. Gillette India
It is well known that Procter & Gamble Hygiene & Health Care Ltd. is a lesser-known company, but through its wide range of products, it is popular.
In short, it is a parent company that is responsible for many consumer goods brands that you might be familiar with.
It is the company that is responsible for the creation of Pantene, Gillette, Oral B, Pampers, Ariel, among other brands.
Factors affecting stock:
Founded in 1964, the company has become one of the most attractive shares among prospective investors in recent years.
After all, its popularity in the industry has led to it being one of the most respected FMCG firms in India. In a nutshell, the company has been generating an attractive return on investment for some time now.
On this tour, we will explore a wide variety of P&G Hygiene Ltd. products across its broad product categories.
Baby Care
Skin and Personal Care
Personal Health Care
Grooming
Home Care
Fabric Care
Hair Care
Feminine Care
Oral Care
Why to invest
In order to understand those key reasons that are invoking us to BUY for a particular FMCG share, we must understand its important drivers.
It is not surprising that the market is flooded with tons of consumer goods stocks to invest in, but there is no doubt that food chunks in the market are limited.
Like P&G, the share of this company is one of the trusted ones. There is no doubt as to why the statement is so true, as there are tons of branded products that it sells. And all this makes it clear why the share of this company is so promising.
The cumulative return on investment of Procter & Gamble Hygiene & Health Care, Ltd. has been about 124.96% over the past five years, giving us a short introduction to why you should consider investing in P&G.
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10. Tata Consumer Products
I would like to highlight another name that has risen above the rest and is gaining a significant edge over other FMCG stocks to invest in, Tata Consumer Products (TCPL).
Tata Consumer Products (TCPL) is one of the best names in the FMCG sector. Set up in 1962, the company was originally a subsidiary of Tata Group.
Factors affecting stock:
Despite the fact that the Company manufactures a range of products and has several targets, if you already trust Tata Group, then you should not delay buying the share.
It is no secret that Tata Cons. Prod. Ltd keeps its product range diversified on a dynamic basis, as do many other FMCG companies.
The most popular brands owned by the company include Tata Tea and Tata Coffee, both of which are owned and managed by the company. It has enjoyed steady growth over the past few years, but is expected to grow even more by the end of 2021.
The following list represents the main products manufactured and supplied by Tata Consultancy Products Ltd and its subsidiaries:
Tea
Liquid Beverages
Coffee
Foods
Out-of-Home
Why to invest
The Company has an expected revenue of 116.02 billion, higher by 20.39% than the company's previous year revenue.
By the end of the financial year 2021, the Company’s revenue was reported at 116.02 billion, higher by 20.39% than the company's previous year revenue.
The Company generated more profit for the current year than it did the previous year generating 8.57 billion dollars, more than 86.33% higher than the previous year as a result of the global pandemic.
Currently, Tata Consumer products Ltd. has been an ideal investment for long-term investors based on its performance over the past few years.
In terms of return on investment, the Company has generated 425.71% since its inception in 2018. Overall, we can be confident in the performance of this share.
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Conclusion
It is also important to note that FMCG companies represent one of the largest asset classes of the Indian Stock market.
These FMCG stocks offer you a wide range of opportunities with the best possible returns. FMCG stocks are the most profitable asset class of Indian Stock Market.
The fast-moving consumer goods sector enjoys a high level of popularity because they serve nearly every industry, market, and individual. That is why if you are considering investing in FMCG shares you should think very seriously about it.
What's the point in putting your portfolio aside when you can end up including the most trusted sector of the market?
I hope you liked our article on best FMCG Stocks in India, if you have any comments or suggestions do share them in the comments below
Frequently Asked Question
Q1. Is it good to invest in FMCG?
Ans. Yes, FMCG sector has the highest demonstrated growth rate due to sale of daily use products. Its stocks are must buy.
Q2. What are best consumer stocks?
Ans. Bajaj Consumer Care Ltd. Household & Personal Products is the best stock to purchase today
Q3. Who is the number 1 in FMCG sector in world?
Ans. ITC is number 1 in the FMCG sector in the world today and occupies the largest market share.
