Best FMCG Stocks in India (2023)

Last Updated on Aug 3, 2023 by Anjali Chourasiya

Best FMCG stocks on NSE 2023

Note: To churn out a list of the best FMCG stocks, we have used the following parameters on Tickertape to filter the stocks, among many others. You can use the Tickertape Stock Screener to filter stocks based on different parameters.

• Sector: Consumer Staples (FMCG Foods, FMCG – Household Products, FMCG – Personal Products, FMCG – Tobacco)
• Market Cap: Set to high, i.e. Largecap
• Return on Capital Employed (ROCE): Set from highest to lowest
• PE Ratio

The information shown here is of date 3rd August 2023.

Details of top 3 FMCG stocks

1. Britannia Industries Ltd

Founded in 1892, Britannia Industries Ltd (BIL) is a manufacturer and marketer of bakery and dairy products. BIL is one of India’s leading food companies with a 100 yr legacy. Here are some financial highlights of the company.

• In FY 2023, the revenue of the company increases by 17.68% to Rs. 16,897.42 cr. 
• The ROCE of the company is the highest among the others on the list, which is 95.32%. Its PE ratio is 49.89.
• Over the last 5 yrs, the market share has increased from 12.6% to 15.72%.
• The stock shows good signs of profitability and efficiency. However, it lacks behind the market in financial growth, as stated by Tickertape Scorecard.
• Britannia Industries Ltd has no potential red flags, but the stock is overpriced and is not in the overbought zone.

To know more about the stock’s financial performance, click here.

2. Nestle India Ltd

Founded in 1866, Nestle is the world’s largest food and beverage company. They have more than 2,000 brands in 186 countries worldwide. The company has been in the market for more than 150 yrs. Further, they have set various sustainability goals to achieve by 2030. Let’s have a quick look at their financial performance.

• The ROCE of the company is 57.82%, and its PE ratio is higher than BIL, which is 92.29%. It is also the second highest on the list of top FMCG stocks.
• In FY 2023, the company’s revenue increases by 14.49% to Rs. 17,524.38 cr. 
• Over the last 5 yrs, free cash flow growth has been 6.2%, vs the industry average of 29.98%.
• The stock has a profitability score of 8.1, showing good signs of profitability and efficiency. However, in terms of valuation, the stock seems to be overvalued vs the market average as per the Tickertape Scorecard.
• Nestle India Ltd has no potential red flags, but the stock is overpriced but is not in the overbought zone.

To dive deeper into the stock’s fundamentals and financial performance, click here.

3. Marico Ltd

Incorporated in 1990, Marico is one of India’s leading consumer products companies in the global beauty and wellness market. The company is present in 25 countries across emerging markets of Asia and Africa. Here are some financial highlights of the company.

• The ROCE of the company is 41.16%, and its PE ratio is 55.84.
• In FY 2023, the revenue of the company increases by 4.89% to Rs. 11,168 cr. 
• Over the last 5 yrs, the net income has averaged 10.82%, vs the industry average of 6.52%.
• The profitability of Marico Ltd is 7.8, showing good signs of profitability and efficiency. However, as per the Tickertape Scorecard, the stock is lagging behind the market in financial growth and seems to be overvalued vs the market average.
• Marico Ltd has no potential red flags, but the stock is overpriced and is not in the overbought zone.

To know more about the stock’s financial performance, click here.

Fast Moving Consumer Goods (FMCG) is the fourth largest sector in the Indian economy. It accounts for around 15% of the GDP and employs more than 10 mn people in India. The industry has been growing at a rapid pace over the years due to various factors. Now, let’s look at what are FMCG stocks, 

What is FMCG?

FMCG refers to the products that are high in demand, affordable and sold quickly. They are quick to move out of the store. Hence the name ‘fast-moving’. People use these products on a daily or regular basis. It includes toothpaste, soaps, detergents, oil, shampoo, beverages, beauty products, personal care products, and more.

The FMCG sector in India is immense. It is categorised into three broad divisions:

1. Food & Beverages constituting about 19%.
2. Health care makes up 31%.
3. Household & Personal care is 50%.

FMCG stocks are the ‘barometer’ of consumer demands in the market. There is a Nifty FMCG Index that reflects the behaviour and performance of 15 FMCG stocks listed on the National Stock Exchange (NSE). 

Future projections of the Indian FMCG industry

Here are some estimations about the Indian FMCG industry given by the IBEF.

• The Indian FMCG market is expected to grow at a CAGR of 14.9% to reach $220 bn by 2025 from $110 bn in 2020.
• The Indian packaged food market is expected to double to $70 bn by 2025, and the Indian processed food market is projected to expand to $470 bn by 2025, up from $263 bn in FY 2020.
• The Indian online grocery market is expected to exceed sales of about $17.12 bn by 2026, at a CAGR of 28.99%. 

These projections of the FMCG sector look on track with the pandemic easing out. 

Factors to consider when buying FMCG stocks

There are various FMCG stocks in India. Deciding the best stocks to buy among them can be confusing. Here are some factors to consider before you invest in FMCG stocks.

Future growth potential: If a company has a high potential for future growth, it is one step ahead of the others. Growth potential is one of the most important factors to consider while picking stocks. Future growth represents the generation of higher profits in the future, resulting in a higher share price.

Current performance: While future growth is essential, it is also crucial to analyse the recent performance of the company. You must have a foundational understanding of the company. For this purpose, fundamental analysis is one of the most effective ways.

Portfolio diversity: Companies with a diversified portfolio have an edge over others in the same sector. Product portfolio diversification differentiates a company from its competitors and builds strong brand equity. 

Distribution network: A strong distribution network is a strong indication of a good FMCG company. A well-managed distribution network helps in the smooth functioning of the company. It also helps reach out to the maximum target audience and earn better sales profits. 

Valuation ratios: Valuation ratios help in identifying buying opportunities during different market phases. They are also used to find stocks that are significantly below their intrinsic value. 

Brand equity and market share: In order to understand if a company is able to sustain its current growth consistently for the long term, two factors, brand equity and market share, can help. They assist in determining the reliability of FMCG stocks.

Conclusion

The FMCG sector is snowballing. It is also expected to multiply at a healthy pace in the upcoming years. The industry is competitive and has high growth potential, offering lucrative investment opportunities. You can keep track of the top-performing FMCG stocks using Tickertape to make wise decisions about your investments.

Frequently asked questions 

1. What is FMCG Index?

The FMCG Index is designed to reflect the behaviour and performance of FMCG companies. The Nifty FMCG Index reflects the performance of 15 FMCGs.

2. What are FMCG sector stocks?

The FMCG sector is mainly divided into three categories: food & beverages, healthcare, household and personal care. Stocks belonging to these industries come under the category of FMCG stocks.

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Anjali Chourasiya

I am a finance enthusiast who loves exploring the world of money through my lens. I’ve been dedicated to building systems that work and curating content that helps people learn.

As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!

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