Top FMCG Stocks in India

08 April 2024
9 min read
Top FMCG Stocks in India
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(The stocks mentioned in the blog are as per Analyst Ratings and Market Capitalization)

India's FMCG sector ranks as the 4th-largest in the economy. It features high-turnover consumer packaged goods, which undergo rapid production, distribution, marketing and consumption. Today, the dominant FMCG products in the market include detergents, toiletries, tooth-cleaning products, cosmetics and more.

The FMCG products are always in demand and are considered essential household items. In India, investing in FMCG stocks has been a popular choice due to the sector's consistent growth and the continuously rising consumer demand for these products.

FMCG Sector in India - A Brief Overview

The FMCG sector in India covers a wide range of product categories like home care, food & beverages, health care, personal care, beauty and cosmetics, etc. Changes in consumer behaviour, favourable government policies, rapid urbanisation, the introduction of new branded products, the growth of e-commerce platforms and increasing disposable incomes have led to exponential growth in Indian FMCG stocks. 

With household and personal care products making up half of FMCG sales in India, the industry holds significant importance in the country's GDP and ranks 4th overall. The FMCG market is expected to exhibit robust growth, with total revenue projected to reach nearly USD 615.87 billion by 2027, growing at a CAGR of 27.9% from 2021.

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Best FMCG Stocks in India 2024 as per Analyst Ratings

The below table represents the best FMCG stocks in 2024 as per analyst ratings. We have chosen analyst ratings as a criterion to make the list as these stocks are rated by the analysts after a thorough market study.

Now, let’s have a look at the list-

S.No.

FMCG Stocks in India (as per analyst ratings)

BUY Analyst Rating (in %)

1.

ITC

91

2.

Varun Beverages

81

3.

Godrej Consumer Products

79

4.

Hindustan Unilever

67

5.

Britannia Industries

59

*Our stock selection criteria for top stocks based on analyst ratings are mentioned at the bottom of this blog.

Top FMCG Stocks in India in 2024 as per Market Capitalisation

Here is a list of the top FMCG stocks in India as per market capitalisation:

S.No.

FMCG Stocks in India (as per market capitalisation)

1.

Hindustan Unilever

2.

ITC

3.

Nestle India

4.

Varun Beverages

5.

Godrej Consumer Products

*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.

Overview of Best FMCG Stocks in India as per Analyst Ratings

The following section outlines a comprehensive overview of the best FMCG sector stocks in India as per analyst ratings:

1) ITC

Established in 1910, ITC transformed from a tobacco-centric company into a diversified conglomerate, expanding its presence in various sectors such as FMCGs, personal care products, agricultural commodities, paperboards, packaging, branded apparel, stationery, hotels, agarbattis, etc. Additionally, it expanded its branded packaged foods segment to include luxury chocolates, ghee, dairy and frozen food products.

Some of the popular food brands of this company include Kitchens of India, Aashirvaad, Sunrise, Bingo, Sunfeast Milkshake, Sunfeast Yippee, Candyman, Jelimals, GumOn, Fabelle, B Natural, etc.

Under the personal care segment, ITC offers a diverse range of products, including EDW Essenza, Dermafique, Fiama, Vivel, Engage, Superia, Nimyle, Savlon, etc. In the education sector, ITC provides Classmate and Paperkraft products. Additionally, the matches and agarbatti section includes AIM, Mangaldeep and Homelites. Its operations span across North America, Europe and Southeast Asian countries.

2) Varun Beverages

An Indian beverage company, Varun Beverages Limited (VBL) operates as a franchisee of PepsiCo. VBL manufactures and distributes a wide range of carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including packaged drinking water under PepsiCo trademarks.

Some of the PepsiCo CSD brands produced and sold by VBL are Pepsi, Mountain Dew, Pepsi Black, Sting, Seven-Up, Seven-Up Nimbooz Masala Soda, Mirinda Orange and Evervess. VBL also produces and sells PepsiCo NCB brands like Seven-Up Nimbooz, Tropicana Slice, Tropicana Juices, Aquafina and Gatorade. 

Its food segment includes brands like Lays, Doritos, Cheetos and Kurkure. It has about 31 manufacturing plants in India, 2 in Nepal, and one each in Morocco, Zambia, Sri Lanka and Zimbabwe.

3) Godrej Consumer Products

Headquartered in Mumbai and established in 2001, Godrej Consumer Products Limited is one of the popular FMCG company, operating primarily in the home care and personal care sectors.

Its personal care brands include Saniter, PAMELAGRANT Beauty, Villeneuve, Millefiori, Cinthol, etc. Home care brands include Stella, Good Knight, Ezee, HIT, etc. Additionally, haircare brands encompass DARLING, PROFECTIV Mega Growth, INECTO, ISSUE, nupur, PROFESSIONAL, ROBY, AFRICAN PRIDE, Just for Me, nyu, etc. 

The company operates in India, Africa, Indonesia and other regions. Godrej Consumer Products Limited has subsidiaries, including Godrej Household Products (Lanka) Pvt. Ltd, Beleza Mozambique LDA, Godrej South Africa Proprietary Ltd, Godrej Africa Holdings Limited, Cosmetica Nacional, Godrej East Africa Holdings Ltd and Deciral SA.

4) Hindustan Unilever

Established in 1933, Hindustan Unilever Limited dominates the FMCG market in India with a strong portfolio comprising over 50 brands across 14 FMCG categories. These brands are essential for millions of people across the country in their everyday lives. The company operates in five segments: beauty and well-being, nutrition, ice cream, home care, and personal care. 

Their food segment includes products from brands Kissan, Knorr, Bru coffee, Magnum, Horlicks, Annapurna, etc. The company’s personal care segment focuses on skin cleansing, deodorants and oral care items. Its personal care products include Clinic Plus, Fair and Lovely, Ponds, Lakme, Sunsilk, Dove, Lifebuoy, Close Up, etc. Home care includes fabric care and cleaning products from brands like Domex, Sunlight, Surf Excel, Comfort, Rin, and others.

5) Britannia Industries

Britannia Industries Limited is well-known across the country as one of the top biscuit manufacturers. The company focuses solely on the food sector and has 7 different parts within it. Its product range includes bakery items like biscuits, croissants, bread, cakes, rusks and wafers, as well as dairy products such as milk, butter, cheese, ready-to-drink milk beverages, and yoghurt. 

BIL sells its products under various brands like Milk Bikis, MarieGold, Good Day, Tiger, Crackers, Treat, 50-50, Bourbon and NutriChoice, which remain popular today. The company distributes its products through distributors, vendors, direct sales channels and contract packers. It supplies its products to the Middle East, Africa, Europe, America and various other countries.

Factors to Consider Before Investing in FMCG Stocks in India

Here are some essential factors you need to consider before buying the best FMCG shares in India to make informed investment decisions:

  • Supply Chain Management

It is important to understand how companies manage their raw materials throughout production. This ensures efficiency remains constant, safeguarding your investment from losses due to shortages in materials or finished products.

  • Distribution Network

A well-organised distribution network is crucial for companies to reach their target audience effectively and boost profits through increased sales.

Examining the distribution network of FMCG shares in India gives you insight into potential sales smoothness and the company's ability to capture a larger market share.

  • Financial Performance

Before you choose which FMCG stocks to buy, as an investor, you need to understand the company's current financial performance. You must examine the company's profit margins, how it makes money, return on equity and other important measures before deciding to invest.

  • Brand Equity and Market Share

These two factors play a vital role in determining whether a company can sustain itself in the long run. To ensure the reliability of FMCG shares in India, you need to check that the company has a strong brand image among its target audience and that its market share remains consistent over time.

  • Government Policies

When investing in FMCG stocks, it is important to think about how government regulations might affect the company's operations and profits. These regulations cover manufacturing, labelling and advertising, so you should consider their potential impact.

Should You Invest in FMCG Stocks?

Buying FMCG sector shares keeps you engaged in a diverse range of industries, from food and beverages to personal care and household products. These companies play a crucial role in India's economy, offering stability and growth potential. However, investing in FMCG stocks comes with its challenges.

FMCG stocks may be affected by changing consumer trends, economic conditions, and competition. To make informed decisions while investing in FMCG stocks, you must thoroughly research the market, stay updated on market developments, and monitor the financial performance of FMCG companies closely. Moreover, you must periodically review your investment strategy to ensure it aligns with your financial goals and risk tolerance. 

The Bottom Line 

The FMCG sector is rapidly growing and is expected to continue expanding in the coming years.

To make smart investment choices, you should stay updated with the FMCG stocks in India. It is a competitive industry with significant growth potential, providing attractive investment opportunities in the long run. 

*Stock Selection Criteria for Top Stocks Based on Analyst Rating

Investors must carefully read through the following information on stock selection criteria while running through the stocks based on analyst ratings-

These stocks have been shortlisted as per Analyst ratings provided by the I/B/E/S (The Institutional Broker’s Estimate System) database, further aggregated by Refinitiv. Ratings are determined by analysts' forecasts of company performance, taking into account metrics like earnings per share, sales, and net income. These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).  

Before investing, investors must conduct independent research and not solely rely on the information provided here. This will allow investors to make appropriate investment decisions based on their financial goals, investment objectives and risk tolerance.

*Stock Selection Criteria for Top Stocks Based on Market Capitalisation

These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. 

It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. 

This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Aakash Baid

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Groww Invest Tech Pvt. Ltd. (Formerly known as Nextbillion Technology Pvt. Ltd) Ltd. do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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