Fast-moving consumer goods (FMCG) is the fourth largest sector in the Indian economy. The FMCG sector is forecast to expand at a compound annual growth rate (CAGR) of 14.9% to $220 billion by 2025, much higher than $167 billion in 2023. The growing market size of FMCG companies is a clear indication of the big opportunity they hold for investors to grow their capital.
As a stock market investor, if you are thinking about investing in FMCGs and looking for the best FMCG stocks in India, you are in the right place. In this blog post, we will discuss some of the top FMCG stocks in India that you can invest in.
FMCG sector in India: A brief overview
The FMCG sector in India is massive, with a wide range of product categories including food & beverages, home care, beauty and cosmetics, personal care, and more. India’s FMCG stocks are witnessing rapid growth due to increasing disposable income, availability of new products, changing customer behaviour, rapid urbanization, and growth of e-commerce platforms.
As mentioned above, the FMCG sector is the fourth largest industry segment. Among FMCG companies, personal care and household products account for almost half of the market capitalization.
Top FMCG stocks in India in 2024 by market capitalization
If you are planning to diversify your investment portfolio, investing in FMCG companies or FMCG stocks can be a great option. However, you should find the best FMCG stocks that are suitable for your investment. We have compiled a list of the top FMCG stocks in India in 2024 by market cap to make your task easier.
- Hindustan Unilever– Hindustan Unilever has ₹6.371 trillion in market cap as of July 2024.
- ITC– ITC has a market cap of ₹6.278 trillion, as of July 2024.
- Nestle India- Nestle India’s market cap is ₹2.388 trillion, as of July 2024.
- Varun Beverages– As of July 2024, Varun Beverages market cap is ₹2.178 trillion.
- Godrej Consumer Products- Godrej’s market cap is ₹1.500 trillion as of July 2024.
Overview of the Top FMCG stocks in India
If you are confused about identifying the top FMCG stocks in India to invest in, you can consider these FMCG companies.
1. Hindustan Unilever
Hindustan Unilever Limited (HUL), a leading consumer goods company, is known for popular brands such as Surf Excel and Dove. Many of its products are market leaders in the industry segments they operate, making it a safe bet for long-term investment.
HUL’s product portfolio comprises 50+ brands among 14+ FMCG categories. These brands play a significant role in serving millions of people across India.
2. ITC
The history of ITC Group, a diversified Kolkata-based conglomerate, dates back to 1910 when it was incorporated as Imperial Tobacco Company of India Ltd. The company has interests in diverse industries such as FMCG, hotels, paperboard & packaging, agribusiness, and IT. ITC has evolved over the years to become one of the largest private sector companies in India. ITC is a household brand known for its cigarette brands such as Gold Flake and India Kings, Aashirvaad brand food products, and Sunfeast biscuits, not to mention its Classmate brand of student stationery products.
Primarily known as a tobacco company, the firm has diversified its revenue streams by venturing into several lucrative business segments. The expansion spree has defined ITC’s history, as seen by the establishment of ITC Hotels in the luxury segment and the launch of ITC Infotech, marking its foray into the information technology industry.
3. Nestle India
Nestle India Ltd, a unit of Nestle S.A. of Switzerland, is engaged in food business. The company is best known in India for its products such as NESCAFE, MAGGI, KIT KAT, and MILKMAID.
4. Varun Beverages
Another popular name among FMCG companies in India that you can consider investing in is Varun Beverages. It is one of the largest franchisees of PepsiCo and is one of the largest PepsiCo bottlers. Varun Beverages primarily manufactures and distributes a wide range of carbonated soft drinks and non-carbonated beverages in India. Besides this, VBL also manufactures and distributes packaged drinking water under the label of PepsiCo.
Pepsi, Mountain Dew, Seven Up, Sting, Nimbooz masala soda, Slice, Tropicana, Gatorade, Aquafina, and Miranda are some of the popular products that the company makes and and sells under the trademark of PepsiCo. Also, the VBL food segment has products like Lays, Cheetos, and Doritos. The company has a total of 31 production plants in India, 2 in Nepal, and one each in Zimbabwe, Morocco, and Zambia.
5. Godrej Consumer Products
Godrej Consumer Products Limited was established in 2001. It is one of the top FMCG companies in India in 2024, headquartered in Mumbai. Godrej primarily operates in the home care and personal care segment. The company has a wide range of personal care products that include PAMELAGRANT Beauty, Villeneuve, Cinthol, Saniter, and Millefiori.
Its home care products include HIT, Good Knight, Ezee, and Stella. Apart from this, Godrej Consumer Products Limited also offers a wide range of haircare products such as nupur, ROBY, PROFESSIONAL, ISSUE, INECTO, DARLING, AFRICAN PRIDE, PROFECTIV Mega Growth, nyu, just for me, etc.
Factors to consider before investing in FMCG stocks in India
Investing in FMCG stocks offers various benefits, but you should make informed decisions to make the most of your investment. Here are some factors that you should consider before investing in the top FMCG stocks in India.
Supply chain management
Supply chain management is a key factor in understanding a company’s efficiency. It is crucial to review how companies you are choosing to invest in manage their raw materials throughout the production process. A company’s efficient supply chain management system ensures that your investment is safeguarded against losses due to shortages in finished products or raw materials.
Distribution network
Another important factor to consider before investing in FMCG companies is their distribution network. A company’s ability to reach its target audience and boost profits is marked by a well-managed distribution network. Reviewing a company’s distribution network can offer you valuable insights into its potential sales and its ability to capture a greater share of the market.
Financial performance
One should also evaluate the financial performance of companies before you invest in the best FMCG stocks in India. The current financial performance of a company must be reviewed properly. You should understand how a company makes money, its profit margins, ROE (return on equity), and other financial metrics before making any investment.
Brand equity and market share
Brand equity and market share are two important factors that determine a company’s ability to sustain itself in the long run. If a company has a consistent market share over a long time and a strong brand image among the target audience, it can be one of the top FMCG companies in India.
Government policies
Government policies play a crucial role in stock market investments. Hence, it is important to analyze government policies and regulations that might affect your chosen company’s profits and operations. Government regulations usually cover labeling, manufacturing, and advertising.
Should you invest in FMCG stocks?
Investing in the top FMCG companies in India can help diversify your portfolio. With FMCG stocks, you get exposure to industries such as food, household products, personal care products, beverages, and more. However, investing in FMCG companies has its challenges. Various factors can affect the FMCG stocks like market competition, economic conditions, and changes in consumer preferences.
If you want to invest in the best FMCG stocks in India, you must research the market thoroughly, monitor the FMCG companies closely to understand their financial performance, and keep yourself updated on recent market developments. This will help you make informed decisions for your FMCG stock investment in India.
