The growth of the FMCG sector in the country has been on the rise. Right from toothpaste and soaps to pure honey and body shower gel, the scope of this sector is growing beyond imagination.
The FMCG sector is one of the largest sectors of the country. Its contribution to the Indian economy has been prominently noteworthy in recent times.
Let us look at the top 5 FMCG stocks of the Indian stock market and analyze how investing in these stocks can prove to be beneficial.
Which are the top 5 FMCG Companies in India?
The FMCG sector is divided into the following categories:
- Home and Personal Care contributes about 50% to the total sales
- Foods and Beverages comprise 31% of the total sales
- The remaining 19% consists of the contribution made by Healthcare
The following are the top 5 FMCG company stocks in India:
Hindustan Unilever Limited (HINDUNILVR)
- Having a market capital of a staggering INR 5.3 lakh crore, HUL is the topmost FMCG giant in India. The company has a solid cash management system, with several of its top running brands having a turnover of INR 2000+ crores each.
- Maintaining an effective operating margin (average) of 20% approx, it has surpassed all its competitors. HUL has a highly effective and efficient supply chain network, which also makes it a significant employer in India.
- The shares of HUL have been trading at a record high PE of 70 and EPS being almost 34.02. The HUL share price has varied from INR 2215.20 to a 52W high of INR 2859 in the past year.
Nestle India Limited (NESTLEIND)
- Nestlé is a subsidiary of a Switzerland based organization and is the maker of India’s most loved Maggi noodles.
- The company predominantly produces beverages and confectioneries such as Milkmaid, Kit-Kat, Nescafe, etc.
- Nestle share price has varied from INR 17,479 to INR 18,139 in the past year with a market capital of INR 1.75 lakh crore.
- Nestle has an impressive dividend yield ratio of 1.10
Dabur India Limited (DABUR)
- Dabur is a leading manufacturer of Ayurvedic products. Its primary target market is the rural areas of India, which contribute to about 45% of its total revenue.
- The company’s products are globally recognized for being nature-based.
- Dabur share price has varied from INR 527.30 to INR 554.15 in the past years making it an affordable buy to the common man.
- It has a market capital of about INR 99,000 crore and is constantly growing and bringing out innovative products.
Britannia Industries Limited (BRITANNIA)
- Britannia is a leading FMCG giant and is a critical part of the Wadia group.
- Britannia has over 5 million retail outlets in the nation. Its brands like Marie Gold and Good day have a reach of more than 50% of households in India.
- Currently, Britannia’s share price has varied from INR 3389.45 to a 52W high of INR 4153 in the past year with an outstanding dividend yield ratio of 4.40.
ITC Limited (ITC)
- ITC is one of the oldest companies generating 65% of its revenue from the Tobacco segment
- The company has diversified its business into different segments such as apparel, hotels, agriculture, etc.
- The ITC share price has varied from INR 218.60 to a 52W high of INR 262.55. It has a market capital of INR 2.8 lakh crore and a dividend yield ratio of 4.63, which makes it the second-largest contributor to the FMCG sector after HUL in terms of market capitalization.
Even during the pandemic, the demand for essential products was met by effective supply chain operations of the FMCG companies. Hence one can certainly keep an eye on these stocks and begin with online trading to understand the crux of the stock market.