Best FMCG Stocks in September 2024 Based on 5Y CAGR

The FMCG sector in India has witnessed growth because of consumer-driven growth and higher product prices, especially for essential goods. During 2021-27, the total revenue of the FMCG market is likely to grow at a CAGR of 27.9%, reaching nearly US$615.87 billion. The Union government approved a new PLI scheme for the food processing sector, with a budget outlay of ₹109 billion (US$ 1.46 billion). In this blog, we will explore the best FMCG stocks in September 2024:

Best FMCG Stocks in September 2024 Based on 5Y CAGR

Note: The FMCG stocks list has been selected from the companies having a market capitalisation of more than ₹10,000 crore and sorted based on 5Y CAGR as of September 17, 2024.

Overview of 5 Best FMCG Stocks

• Hatsun Agro Product Limited: Hatsun Agro Product Limited has been in business for over five decades and has achieved the position of the largest private-sector industry in the Dairy sector. It manufactures and markets Milk and Milk products, Ice Cream, etc. During FY24, the company’s operating margin stood at 4.48%, compared to 3.09% in FY23. The increase is due to increased profit and revenue due to better performance.

Key Metrics:

• Return on Equity (ROE): 17%
• Return on Capital Employed (ROCE): 13.2%

• Britannia Industries Ltd: Britannia is among the most trusted food brands and manufactures India’s favourite brands, such as Good Day, Tiger, NutriChoice, Milk Bikis, and Marie Gold, which are household names in India. During Q1 FY25, the company’s revenue from operations amounted to ₹4,130 crores, which was a 4% growth on a 12-month basis and a 13% growth on a 24-month basis.

Key Metrics:

• ROE: 57.1%
• ROCE: 48.9%

• Nestle India Ltd: Nestle India, a subsidiary of Nestle S A (holds 62% stake) is primarily involved in the Food business, which incorporates product groups viz. Milk Products and Nutrition, Prepared dishes and Cooking aids, Powdered and Liquid Beverages and Confectionery.  During Q1 FY25, the company recorded strong revenue growth led by volume growth and increased realisations. It witnessed robust strength of operations exemplified by consistent delivery of operating profit margins, even during Covid.

Key Metrics:

• ROE: 135%
• ROCE: 169%

• Zydus Wellness Ltd: Zydus Wellness operates as an integrated consumer Company with a business encompassing the entire value chain in the development, production, marketing and distribution of health and wellness products. The product portfolio of the Company includes brands like Sugar free, Everyuth and Nutralite. On the Personal Care front, Everyuth brand continues to outpace category growth and has registered strong growth. The face scrub category has grown by 14.3% at the MAT level. Everyuth scrub has maintained its leadership position with a market share of 46.2% in the facial scrub category.

Key Metrics:

• ROE: 5.32%
• ROCE: 5.33%

• Mrs. Bectors Food Specialities Ltd: Mrs. Bectors Food Specialities Ltd manufactures biscuits and bakery products that are marketed under Mrs. Bector’s Cremica and Mrs. Bector’s English Oven brands, respectively. With respect to the biscuit segment, Q1FY25 revenue stood at ₹ 273 crores against ₹ 223 crores in Q1FY24, thus registering a growth of 23% compared to Q1FY24, including the domestic & export biscuit segment. The biscuit segment has grown by 53% as compared to Q1FY23.

Key Metrics:

• ROE: 23.2%
• ROCE: 25.4%

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.