FMCG Sector Stocks to Invest in India

FMCG sector stocks represent the shares of companies that produce and supply fast-moving products such as household items, food items, herbal products, and personal care products. The companies involved in the FMCG sector in India entertain a stable demand for these products and offer an engaging opportunity for investors. 

FMCG Sector in India: Overview

The FMCG (Fast Moving Consumer Goods) Sector ranks 4th in India. The sector generates 45% of revenue from the rural and 55% from the urban markets. It accounts for 2.5% of the country’s GDP (Gross Domestic Product) and is a vital source of employment. India is a significant part of the global FMCG landscape, with a valuation of around INR 10,00000 crores in 2024. The increased purchasing power of the customers will tend to increase this valuation by a CAGR (Compound Annual Growth Rate) of 27.9%. Thus, investors can consider FMCG sector stocks to exploit their resilience even during economic downturns. But the question arises of which stocks are best to buy. Don’t worry. We’re here to help you identify the best stocks to generate higher returns in the upcoming years. Keep scrolling to explore.   

List of FMCG Stocks in India

*Data is updated as of 14th November 2024

Overview of FMCG Sector Stocks in India

The best FMCG sector stocks in an investment portfolio will continue to show green amounts. To invest in stocks, it is essential to know the company’s fundamentals, financials, and strengths to perform in the upcoming decades. While scrutinising FMCG stocks, we’ve identified some giant players expected to promote growth in the sector. Explore with us. 

1. ITC Ltd. 

ITC Ltd. is a Kolkata-based company founded on 24th August 1910. With a contribution of 12% to India’s FMCG industry, it has a presence in multiple business segments. These include FMCG, IT, packaging, hotels, and agribusiness. 

The market capitalisation of ITC stands at INR 5,85,000 crores, and the PE (Price-to-Earnings) Ratio is 28.50. As of 2024, LIC (Life Insurance Corporation) holds a 15.2% stake in this organisation, and British American Tobacco holds around 25.5% stake. Stable and steady growth in the demand for its product fosters the company’s YoY growth in revenue and net income. 

ITC Ltd. announced a 2.91% dividend yield in the quarter that ended in March 2024 and regained its popularity as one of the best FMCG sector stocks in India. 

2. Hindustan Unilever Ltd. 

Established in 1933 in Mumbai, Maharashtra, and now operating as a giant player in the FMCG sector in India. Hindustan Unilever Ltd. has a portfolio comprising over 20 product categories, including tea, detergents, soaps, shampoos, and more. The market capitalisation of this company is INR 5,72,000 crores, and the PE (Price-to-Earnings) Ratio is 55.69.   

Hindustan Unilever Ltd. consists of over 50 brands essential for millions of people across the country to manage their everyday lives. Promoters hold around 61.09% of the shares in this company and around 5.77% stake held by mutual funds. 

In addition to capital appreciation, Hindustan Unilever Ltd. often provides its shareholders with a dividend yield of 1.71%. 

3. Nestle India Ltd. 

Nestle India Ltd. was founded on 28th March 1959 in the food processing industry. It is one of the giant players in the FMCG sector stocks in India and operates around 9 manufacturing units across the country. These manufacturing facilities are available in the states like Punjab, Haryana, Tamil Nadu, Goa, Uttarakhand, Gujarat, and Himachal Pradesh. 

The market capitalisation of Nestle India Ltd. is INR 2,14,000 crores, and the PE (Price-to-Earnings) ratio of the company is 66.18. The promoters of this company hold around 62.76% stake, and the rest 37.26% is distributed among FIIs, DIIs, and others. 

On 25th April 2024, Nestle India Ltd. announced a dividend payout of 1.35%, which was recorded on 16th July 2024.  

4. Varun Beverages Ltd. 

Varun Beverages Ltd. is a Gurugram-based company founded in 1995 that manufactures soft drinks, non-carbonated beverages, and bottles. Ravi Jaipuria was the founder of this multinational company that served in different nations. As of 2019, it was the PepsiCo bottler in India. Now, it operates in more than 14 countries to generate higher revenue. 

The market capitalisation of Varun Beverages Ltd. is INR 1,89,000 crores, and its PE (Price-to-Earnings) ratio is 74.37. The company declared a dividend yield of 0.66% in the quarter ended in June 2024. RJ Corp. Ltd. holds around 26.7% stake in this one of the best FMCG sector stocks in India. 

5. Godrej Consumer Products Ltd.

It is a Mumbai-based multinational consumer goods company with multiple product segments, including personal care, skincare, and cleaning agents. In January this year, Godrej Consumer Products Ltd. launched a liquid detergent, Godrej Fab, in southern India. 

The market capitalisation of this one of the best FMCG sector stocks in India stands at INR 1,21,000 crores, and its PE (Price-to-Earnings) ratio is 66.70. The company operates in multiple locations, such as Madhya Pradesh, Himachal Pradesh, Chennai, Sikkim, and Pondicherry. As of September 2024, Promoters held around 63% of the company. Investors consider it a favourable stock as it offers a 1.70% dividend. Experts state that in the upcoming year, Godrej Consumer Products Ltd. will reach INR 1,457.17. 

Stocks With Their PE (Price-to-Earnings Ratio)

*Data is updated as of 14th November 2024

How to Invest in FMCG Sector Stocks?

Investing in FMCG sector stocks is significant in making the portfolio diversified and earning regular income (dividend). Here is how to invest in these stocks to generate higher returns in a shorter period of time. 

1. Assess Fundamentals

If a company is performing well, it doesn’t mean that it could help you generate unlimited returns. A financially strong stock can incur losses due to ineffective PE, low market capitalisation, etc. Consider picking fundamentally strong FMCG stocks in India to diversify your portfolio. Conduct thorough research on different stocks available and compare them with each other to identify the best one. 

2. Explore Different Stocks

Keeping a close eye on one stock is not enough. Try exploring multiple stocks at a time to identify the best one. Many FMCG sector stocks, such as ITC Ltd., Hindustan Unilever Ltd., Dabur India Ltd., Emami Ltd., and more, are available. Explore all these stocks and pick the best among them.   

3. Place Transaction

Register with a broker and open a demat account to buy the best FMCG stocks. Choose the quantity you wish to purchase and add the funds to place a transaction accordingly. You can watch the stock performance or returns in your portfolio. 

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Advice related to stocks can save you from huge losses. There are multiple stock advisory companies available in the business world. But we suggest you try Univest once, as it gives five free trades in the initial period.

The organisation is committed to empowering investors to earn higher returns on their investment portfolios. With Univest, you can easily earn around 18% to 20% monthly returns. Not only to generate returns, but you can also use the Univest application to track stock indices like Nifty50, BankNifty, and more. Multiple screeners and calculators are available on this app to help you manage your finances more efficiently.    

Winding Up

Are you looking for steady returns? Consider monitoring the Nifty FMCG Index and the best FMCG sector stocks available in the stock market. These stocks offer exponential growth and higher returns. This promising investment could help investors gain an advantage in stable demand, diversified product segments, long-term growth potential, and more. The projected growth of the FMCG sector in India, with a CAGR of 27.9% by 2030, will generate wealth for investors. 

FAQs On FMCG Sector Stocks

1. How do government policies affect FMCG sector stocks?

Ans. Regulatory frameworks such as FSSAI, the Income Tax Act of 1961, PLI, and more cover the FMCG sector in India. Keep an eye on such policies and regulations to assess their impact on the FMCG stocks in India.     

2. How to invest in FMCG sector stocks in India?

Ans. Register with a broker and open a demat account to invest in FMCG stocks. Explore and identify the best stocks available and transact through your demat account. 

3. What is resilience in FMCG stocks?

Ans. It is the ability of FMCG companies in India to sustain stability or growth potential despite economic downturns, market volatility, and other challenges. The FMCG sector is considered highly resilient to market conditions or other economic factors as compared to other industries in India.  

4. Is it good to invest in FMCG sector stocks in India?

Ans. Steady growth and stable demand for fast-moving consumer goods make FMCG stocks a popular choice to invest in. FMCG companies often provide high dividend payouts to investors, which could be a stepping stone in generating regular income apart from capital appreciation.

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