Best FMCG Stocks to Invest In India 2024

India's FMCG industry, the fourth-largest in the economy, is distinguished by significant turnover in consumer packaged products. Detergents, toiletries, tooth-cleaning products, and cosmetics are among the most common products. These vital home commodities are in great demand, which makes investing in FMCG firms appealing. Home care, food and drinks, health care, personal care, beauty, and cosmetics are some of the product categories covered by this industry. Changes in consumer behaviour, government legislation, urbanisation, new branded items, e-commerce platforms, and rising disposable incomes have all contributed to the exponential rise in Indian FMCG companies. 

With household and personal care items accounting for half of all sales, the industry is critical to India's GDP. The FMCG market is forecast to see strong development, with total revenue projected to reach roughly USD 615.87 billion by 2027, increasing at a CAGR of  27.9% from 2021. In this blog, we will understand FMCG stocks in India, how to invest in them, their benefits, factors, and much more. 

List of Best FMCG Companies In India

The performance of the best FMCG stocks can be influenced by consumer behaviour and economic indicators. Investors are actively searching for the best FMCG stocks for long-term investment, intending to achieve consistent returns and growth over prolonged durations. 

A curated FMCG stock list is given as follows.

Disclaimer: This list of FMCG stocks contains data updated as of 21st June 2024. However, it's important to conduct thorough research before making any investment decisions in these stocks.
 

Overview of the Top FMCG Stocks in India

Long-term investors prioritise stability when selecting the best FMCG stocks for their portfolios. FMCG stocks hold a prominent position, driving growth and meeting the diverse demands of consumers across the nation. Let's understand their market presence and product offerings in detail.

Hindustan Unilever Ltd

Hindustan Unilever Ltd was founded in the year 1933 on 17 October. The headquarters of this company is in Mumbai. This company has a broad range of well-known brands and goods in several areas like food, beverages, home care, and personal care, this is the reason why this company has become a household name.

• In terms of revenue, this company has grown remarkably based on the audited financial accounts for the last five years. 
• Based on the reports of the last five years, the firm has had outstanding turnover and volume growth rates.
• The company is almost debt-free.
• The company has been maintaining a healthy dividend payout of 92.2%
• The company has reported net profit after tax of Rs 2,561.00 Crore in the latest quarter.

ITC Ltd

ITC Ltd was founded in the year 1910. The Managing Director of this company is Sanjiv Puri. The company manages well-known brands such as Sunfeast, Yippee, Aashirvaad, Bingo!, B Natural, Engage, Savlon soaps, and Classmate, among others. 

• Over the last three years, Itc Ltd has given a return on equity (ROE) of 25.0%, which is good. 
• The company has a healthy dividend payout of 92.4%.
• The working capital requirements of this company have reduced from 29.1 days to 20.1 days. 
• The total sale of this company as of March 31, 2023, was INR 65,272.88 crores. 

Godrej Consumer Products Ltd

Godrej Consumer Products was established in the year 2001 and the headquarters are located in Mumbai. The CEO of this company is Sudhir Sitapati. With a diverse portfolio of 29 brands including Nupur, Cinthol, Ezee, HIT, Aer, and Good Knight, the company has established a strong domestic presence and has also expanded into markets in Africa and South America. 

• This company has a good track record of dividends and the current dividend yield is 1.13 %
• Over the last five years, the company has delivered a  sales growth of 6.45%

Britannia Industries Ltd

Britannia Industries Limited was founded in 1892 and the founder is Nusli Wadia. It is a food company specialising in the production of biscuits, cakes, and rusks. It operates within the FMCG foods sector, focusing on bakery and dairy items. 

• The company has a good return on equity (ROE) track record: 3 Years ROE 57.8%.
• The company has maintained a healthy dividend payout of 82.2%.
• The company has delivered a sales growth of 8.69% over the past five years.

Dabur India Ltd

The founder of this company is Burman Family and it is one of the biggest fast moving consumer goods companies in India today, which was established in 1884 by Dr. S.K. Burman. Over the years, the company's emphasis on Ayurvedic products and commitment to herbal formulations have solidified its reputation as a trusted brand, particularly among consumers who prioritise holistic and natural remedies. 

• This company has maintained a healthy dividend payout of 53.2%
• The company has reported a net profit after tax of Rs 341.62 Crore in the latest quarter.

TATA Consumer Products Ltd

Tata Consumer Products Ltd was founded in 1962, in Kolkata and the CEO of this company is Sunil A. D’Souza. This company is offering a broad spectrum of items ranging from tea and coffee to water and ready-to-eat products. 

• The company's working capital requirements have reduced from 48.9 days to 39.1 days
• It has been maintaining a healthy dividend payout of 63.0%
• The company has reported net profit after tax of Rs 267.71 Crore in the latest quarter.

Marico Ltd

The company was founded by Harsh Mariwala an Indian entrepreneur and it was established in the year 1971. This company is known as a top-tier consumer goods brand with a strong focus on health and beauty. Through well-known brands such as Parachute, Saffola, and Livon, Marico has earned consumer confidence and maintained a favourable market position.

• This company has a good return on equity (ROE) track record: 3 Years ROE 37.3%
• A healthy dividend payout of 74.9% is maintained by the company. 
• The company has delivered a sales growth of 5.65% over the past five years.
• Currently, the stock is trading at 20.1 times its book value

Bajaj Consumer Care Limited

This company was established in 1930 and it has emerged as a notable FMCG investment prospect. The company primarily focuses on hair care and personal care products, with flagship offerings including Bajaj Almond Drops and Bajaj Nomarks.

• The company has delivered sales growth of 1.39% over the past five years.
• The working capital days of this company have increased from 77.5 days to 226 days
• The company is almost debt-free. 

Emami Ltd

Emami Group was founded in 1974 and its headquarters are in Kolkata. This company is an Indian multinational conglomerate that serves various specialised sectors within personal care and healthcare. Its products are distributed across more than 60 countries and are accessible through 4.5 million retail outlets across India.

• The company has a good return on equity (ROE) track record: 3 Years ROE 31.4%
• It has been maintaining a healthy dividend payout of 58.5%

Hatsun Agro Product Ltd

Hatsun Agro Product Ltd, commonly known as Hatsun, is a prominent privately-owned dairy company based in Tamil Nadu, India. The company operates through various subsidiaries and brands, catering to a wide range of dairy products including milk, curd, ice cream, butter, ghee, paneer, and dairy-based beverages. 

• The company has been maintaining a healthy dividend payout of 63.3%
• The company has delivered a sales growth of 10.9% over past five years.
   

What Is FMCG?

Investing in the best FMCG stocks can provide exposure to a broad consumer base. Fast-moving consumer goods (FMCGs) refer to products that are swiftly sold at affordable prices. FMCGs typically have a short shelf life due to either their popularity among consumers, such as soft drinks and confections, or because they are perishable, such as meat, dairy products, and baked goods. These products are characterised by frequent purchases, rapid consumption, low pricing, and large-scale distribution. Additionally, they experience high turnover rates while displayed on store shelves.
 

What is the Nifty FMCG Index?

The Nifty FMCG (Fast Moving Consumer Goods) Index is a stock market index comprising companies that are primarily involved in manufacturing and selling fast-moving consumer goods. These goods include products such as food and beverages, personal care items, household products, and many more. 

The Nifty FMCG Index is part of the National Stock Exchange of India's (NSE) suite of sectoral indices, and it is designed to track the performance of the FMCG sector within the Indian stock market. It provides investors with a benchmark to gauge the overall performance of FMCG companies listed on the NSE.

 

How to Invest in the FMCG Industry Stock with BlinkX?

Here's how you can invest in the FMCG industry with BlinkX: 

• On BlinkX you can open your demat account and a trading account to buy and sell shares.
• In the second step, you need to do a thorough search of top FMCG companies in India and their stocks. Look at factors like their financial health, brand strength, market position, and prospects.
• You can download the BlinkX app from the app store or access the platform through the BlinkX website. Different types of research tools and news updates are offered by BlinkX that can help you make informed decisions.
• Once you have identified the stock you want to invest in, you can buy the stock through the BlinkX app.
• By using the BlinkX tracking tool you can regularly check the performance of your stock. 
   

Factors to Consider Before Buying the FMCG Stocks

When considering investments in premier FMCG shares, it's important to understand fundamental factors to consider for making informed investment decisions:

1. Market Dominance and Revenue Expansion

Look for FMCG companies in India that demonstrate strong market leadership and sustained revenue growth, indicating increased demand for their products.

2. Brand Equity

Leading FMCG firms are typically distinguished by their loyal customer base and competitive edge. Consequently, it is advisable to consider investing in FMCG stocks boasting substantial brand equity and effective marketing strategies.

3. Distribution Infrastructure

FMCG companies with a resilient and efficient distribution infrastructure are poised to reach a wider audience. Hence, consider investing in companies with a well-established distribution network.

4. Price-to-Earnings Ratio (P/E Ratio)

Evaluate the price-to-earnings (P/E) ratio of the FMCG stocks under consideration. A high P/E ratio may indicate overvaluation, whereas a low P/E ratio could suggest undervaluation.

5. Economic Indicators

FMCG stock prices are influenced by economic indicators like inflation and interest rates. Opt for consumer goods firms in India that display resilience against economic fluctuations.

6. Competitive Landscape

Analyse the level of competition in the Indian FMCG sector and the company's adeptness in preserving market share and revenue growth amidst competition.

7. Regulatory Environment 

FMCG stocks are subject to diverse regulatory frameworks concerning manufacturing, advertising, and labelling. Therefore, consider how government regulations may affect the company's operations and profitability.

 

Challenges of Investing in FMCG Stocks in India

Similar to any other investment, engaging in FMCG stock investments in India presents its own set of obstacles. However, with the guidance of financial advisors or utilising a reliable platform such as BlinkX, dealing with these hurdles becomes more manageable.

Economic Volatility Sensitivity

FMCG stocks can be challenging due to their susceptibility to market and economic fluctuations. Nonetheless, investors can mitigate this risk by diversifying their portfolios through BlinkX, which offers a collection of FMCG stocks, thus reducing overall risk exposure.

Transparency Concerns 

The lack of transparency in financial reporting poses a challenge for investing in FMCG stocks in India. Yet, BlinkX addresses this issue by furnishing investors with transparent and comprehensive information regarding stocks, including financial statements and performance metrics.

Changing Consumer Preferences

Investing in FMCG stocks involves the risk of changing consumer preferences. However, with BlinkX, investors can access a variety of consumer stocks in India that offer diverse product ranges, mitigating risks associated with shifting consumer trends.
 

Advantages of Investing in FMCG Stocks in India 

As market sentiment remains positive, investors are actively scouting for opportunities to capitalise on the growth potential of the best FMCG stocks. Investing in listed FMCG companies in India offers several advantages. Here are some key benefits:

Stability 

FMCG stocks listed on the NSE are regarded as defensive investments, known for their lower volatility compared to other sectors. This stability makes FMCG companies attractive to investors seeking steadiness, as they typically maintain stable demand regardless of economic conditions.

Long-term growth potential

Opting for the best FMCG stocks for the long term can yield consistent revenue growth over time. Investing in listed FMCG companies can serve as a reliable source of income for investors in the long run.

Diversification

Including FMCG shares in an investment portfolio can enhance diversification as they often exhibit lower correlation with other sectors. Through FMCG stocks investors can reduce overall risk exposure.

Brand Value

Leading FMCG companies in India often boast strong brand value, fostering customer loyalty and driving increased sales. Investing in FMCG companies with strong brand recognition has the potential to deliver sustained growth over the long term.

Defensive nature

FMCG companies tend to offer consistent dividend payments to shareholders, particularly during profitable periods with steady cash flows. This defensive characteristic makes FMCG stocks less susceptible to economic fluctuations, contributing to the resilience of an investment portfolio.

Dividends

The FMCG sector in India typically maintains profitability and stable cash flows, resulting in regular dividend payouts. Consequently, investing in FMCG stocks can serve as a reliable source of passive income through dividends.

 

Conclusion 
When planning for long term investment success, it's essential to carefully research and select the best FMCG stocks for long term growth potential. The scope of investing in the best FMCG stocks in India appears promising, with top companies often dominating the market. As the Indian economy continues to grow, driven by factors such as rising disposable incomes and changing consumer preferences, the FMCG sector is poised for sustained expansion. Investing in FMCG stocks in India presents a lucrative opportunity. Through the BlinkX trading app investors can track and diversify their portfolio efficiently.