FMCG sector is one of the sectors with heavy growth potential in the Indian market. If we look at the statistics the FMCG sector occupies around 15% portion of the Indian GDP while employing around 10 million people. The growth witnessed by the sector has been attributed to a variety of factors such as heavy urbanisation paired with a growing segment of the population turning into middle class. Also social changes such as increasing purchasing power paired with an increase in the amount of disposable income has contributed to the exceptional growth of this sector.
Bonus: I personally have invested in 3 FMCG stocks, which I have revealed in this article. Keep reading.
8 Best FMCG stocks in India 2023
For an investor the FMCG sector is most lucrative inorder to earn heavy profits. However one should carefully choose a stock before investing further. This article lists out the top 8 FMCG stocks for investment that are listed on NSE/BSE.
HUL – Best FMCG company by Marketcap
HUL which stands for Hindustan Unilever Limited was founded in the year 1933. Since then it has steadily developed into a conglomerate and has positioned itself as the largest consumer goods company in the market. The expansion of the company can be witnessed by the fact that products of HUL are available across 150 countries. The company possesses a portfolio of around 400 brands.
The company can be divided into three major segment ie. Personal Care, Refreshment and Home Care. The sales statistics of HUL are as follows. It has a presence across 150 countries with sales exceeding $ 60 Billion on an annual basis.
HUL is the best FMCG company to invest in India, as most of the daily products you use is from Hindustan Unilever.
Some of the most popular HUL products include Lux, Lifebuoy, Surf Excel, Rin, Wheel, Glow and Loveley, Ponds, Vaseline, Lakme, Dove, Sunset, Axe, Bru, Kissan, Kwality Walls, Horlicks etc.
The USP of this company is that they have multiple products under same category, with various price range. For example, the company sells Lifeboy, Lux for a lower income group people whereas they also sell highly price Dove and Pears to more niche audience.
Disclaimer: I hold HUL in my portfolio
HUL marketcap: 6,07,119 Crore INR
ITC has recently positioned itself as a top class FMCG stock in India. The company established in the year 1910 is mostly known for its tobacco based products. However the organisation has also diversified across various segments.
A thing to note here is Saurabh Mukherjea, founder and CEO of Marcellus Investment Managers sold their ITC shares as the do not see the company giving 20% return year on year. He think this FMCG company may be a good one who could give 15% yearly, but not 20%, as they mostly pay dividends and do not reinvest in their business to expand.
Some of the famous brands under its ambit are Ashirwad Atta, Savlon, Yippee, Bingo, Savlon antiseptic, Engage fairness cream, Vivel soap.
At the time of updating the article, ITC is the second best FMCG company by marketcap. ITC has given more than 60% return in the last 1 year.
ITC marketcap: 5,83,896 Crore INR
Disclaimer: I hold ITC in my portfolio
Nestle India
Nestle has positioned itself as a high returns based FMCG stocks. In terms of 5 year’s returns the Nestle stock is the best stock in the market. The business has shown exponential growth across Indian markets and expands across a range of products such as tea, coffee and food.
The products of Nestle can be bifurcated across four segments. Beverages, Chocolates and Confectionery items, Nutrition and wellness products and Petcare based products.
Some of the popular Nestle products are Kitkat, Nescafe.
Nestle marketcap: 2,16,725 Crore INR
Britannia Industries Ltd.
Britannia Industries Ltd (BIL) established in 1892 has been a major manufacturer and marketer of various bakery and dairy based products. The company has a legacy stretching over a period of 100 years while the company clocks an annual revenue around ₹ 9000 crores.
Some of the popular Britannia Industries products are well known biscuits like Good Day, Marie Gold, Tiger, NutriChoice, dairy products like Britannia Curd, Britannia Dahi, Britannia Cheese, Snacks like Britannia Uncle Chips, Britannia 50-50, Britannia Cookies and many more.
Britannia marketcap: 1,18,757 Crore INR
Godrej Consumer Products
The Godrej company has an exceptional hold over the FMCG market of India. While its operations in India are deepening across the country it is also expanding towards emerging markets such as South America and Africa. The company manufactures products such as personal care products, health care based products, home appliances and a strong presence across the food products based market.
Some of the popular Godrej Consumer Products are: Cinthol, Godrej No.1, Godrej Fairglow, Hit mosquito repellant, Goodknight, Ghadi Detergent Powder.
Godrej Consumer Products marketcap: 1,05,902 Crore INR
Dabur
Dabur currently operates across the healthcare sector. The business established in the year 1884 in Kolkata has currently positioned itself as a leading manufacturer of healthcare products. Currently the company has turned into a leading manufacturer and marketer of Ayurveda based healthcare products in India. The company has diversified the products into three segments such as Ayurvedic Products, Food products and Personal care products.
Statistically the company has positioned itself as the fifth largest FMCG sector based company occupying a market share of around 5.5%.
Some of the popular Dabur Products are: Dabur Chyawanprash, Dabur Gulabari Rose Water, Dabur Vatika Amla Hair Oil, Dabur Lal Tail, Meswak Toothpaste, Dabur Real Juice and more.
Dabur marketcap: 1,03,017 Crore INR
Disclaimer: I hold Dabur in my portfolio
Marico Industries Ltd.
Marico is the market leader in the global beauty products and wellness market segment. It has positioned itself as a leading consumer products based company. The organisation incorporated in 1990 has witnessed sleek growth. Currently it operates across 25 countries with a heavy presence across emerging markets such as Africa and Asia.
Marico Industries marketcap: 74,137.86 Crore INR
Some of the popular Marico Industries Products are: Parachute Advansed Coconut Oil, Nihar naturals Coconut oil, Saffola Oil, Set Wet Hair Gel, Fair & Lovely and more
Adani Wilmar
When it comes to growth this company can be termed as the only company witnessing massive exponential growth across the FMCG sector. The company incorporated in the year 1999 has positioned itself as one of the largest packaged food companies. Adani Wilmar has positioned itself as the biggest importer of edible crude oil into the country. According to recent surveys Adani Wilmar has currently positioned itself as one of the topmost trusted brands across the country.
Some of the popular Adani Wilmar Products are: Fortune edible oil, Fortune pulses, sugar etc.
Adani Wilmar marketcap: 52,844 Crore INR
FAQs
Which India FMCG company has the highest marketcap?
HUL (Hindustan Unilever Limited)
Which is the best FMCG stock to buy?
It is difficult to say which would be the best performing FMCG company in India. However ITC has have given more than 60% return in the last one year. HUL, and Dabur are some more good FMCG stocks to buy and hold.
Which is the most undervalued Indian FMCG company?
According to the P/E ratio, ITC is the most undervalued Indian FMCG company. ITC’s P/E ratio is 30.42, while FMCG industry’s P/E ratio is 62.56.
Which is the most overvalued Indian FMCG company?
According to the P/E ratio, Adani Wilmar is the most overvalued Indian FMCG company. Adani Wilmar’s P/E ratio is 86.8, while FMCG industry’s P/E ratio is 62.56.
What’s the future of the FMCG sector in India?
India’s FMCG market has experienced significant growth over the years. In 2020, the market was valued at $110 billion, which is three times the size it was in 2012. It is projected to further expand and reach over $615 billion by 2027. The FMCG market in India is the fourth largest sector in the country’s economy and encompasses food and beverages, household and personal care products, and healthcare items. Household and personal care products account for 50 percent of the market share.
While both rural and urban areas contribute to the FMCG market in India, the rural sector plays a crucial role in driving growth. The growth rate in rural areas has been notable, leading to the overall expansion of the market. The availability and accessibility of FMCG products in rural regions have improved, leading to increased consumption and demand.
In the e-commerce sector, the online FMCG market in India has been rapidly growing. In 2023, it is estimated to exceed $10 billion in size. India’s e-commerce market is known for its fast-paced development, and the COVID-19 pandemic further accelerated the shift towards online shopping. During the nationwide lockdown imposed in March 2020, online platforms emerged as a relevant alternative for purchasing FMCG products, as offline retail faced restrictions and challenges. The convenience, wide product range, and doorstep delivery offered by online platforms contributed to the increased adoption of online FMCG shopping in India.
Overall, the FMCG market in India has witnessed remarkable growth, driven by factors such as the expansion of the rural market and the rise of online shopping. The market’s size and potential make it an attractive sector for both domestic and international companies operating in the FMCG industry.
Some of the future projections pertaining to the FMCG sector are as follows.
- The overall FMCG sector based in India is expected to grow at a rate of 14.9% CAGR and reach a market capitalization of $ 220 Billion.
- The packaged food market across India is slated to double owing to consumption factors and reach a valuation of around $ 70 Billion.
- The processed food market is supposed to reach a market capitalisation of $470 Billion by 2025.
- If we look at the grocery market of India the overall sales is expected to exceed a valuation of $17.12 Billion by 2026 with an estimated CAGR of 28.99%
The FMCG sector has been witnessing a major growth sentiment across all sectors and its demand is slated to witness massive growth. A competitive and growing industry is always a lucrative investment opportunity. However before finalising any stock always research its fundamentals and various other factors.
Top FMCG Companies in India by Marketcap (August 2023 Table)
| Rank | Brand Name | Market
Capitalization (in INR crores) |
P/E
Ratio |
|---|---|---|---|
| 1 | Hindustan Unilever | 6,07,119 | 58.61 |
| 2 | ITC | 5,83,896 | 30.42 |
| 3 | Nestle India | 2,16,725 | 79.5 |
| 4 | Britannia Industries | 1,18,757 | 58.18 |
| 5 | Godrej Consumer Products | 1,05,902 | 62.09 |
| 6 | Dabur India | 1,03,017 | 61.04 |
| 7 | Marico | 74,137.86 | 54.69 |
| 8 | Adani Wilmer | 52,844 | 86.8 |
Average P/E of FMCG industry: 62.56. based on the P/E ratio, ITC seems to be the most undervalued FMCG company even at the current price, whereas Adani Wilmar is most overvalued.
What did we learn?
