Table of Contents
What is an FMCG Company:
Every aspect of our lives is dependent on FMCG (Fast Moving Consumer Goods), it is those products that meet our fundamental needs. For the majority of our lives, we rely on FMCG (Fast Moving Consumer Goods) products to meet our basic needs.
FMCG products are those with a short shelf life, are produced in large quantities at a low cost, and are designed for immediate consumption.
This industry encompasses a variety of products, including household goods, over-the-counter medications, food, personal care products, stationery, and consumer electronics. Fast-moving consumer goods (FMCG) is India’s fourth-largest sector, employing over three million people.
Even at times of the Covid Pandemic, The FMCG sector recovered to a double-digit growth rate of 10.6 percent, owing to a variety of government initiatives as mentioned (mainly such as packaged staples and hygiene categories); abundant agricultural produce; reverse migration; and a lower unemployment rate.
The sector is an evergreen one. Due to its very nature of providing such goods that are of basic necessity. The sector throughout time has grown strong with every passing year. Now, nothing much needs to be said in regards to the sector’s future for we know how India’s population (especially the young working-class generation) would turn out in the coming years.
Top 15 FMCG companies in India:
| Sl.No | Company Name | CMP | Market Cap (In Crs) | ROCE % | ROE % | P/E | EV/EBITDA | PEG | ROCE 5 Yrs | ROE 5 Yrs |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Hind. Unilever | 2,374.25 | 5,57,846.14 | 39.21 | 29.25 | 68.24 | 45.98 | 4.75 | 74.36 | 53.82 |
| 2 | ITC Limited | 207.75 | 2,55,716.24 | 32.56 | 35.98 | 19.28 | 13.03 | 1.87 | 35.11 | 23.55 |
| 3 | Nestle India | 17,180.60 | 1,65,647.99 | 139.29 | 105.76 | 76.72 | 47.26 | 4.11 | 78.86 | 53.63 |
| 4 | Dabur India | 531.10 | 93,867.96 | 27.32 | 23.73 | 55.43 | 39.98 | 8.39 | 28.46 | 25.61 |
| 5 | Britannia Inds. | 3,525.45 | 84,916.91 | 45.36 | 46.89 | 45.56 | 30.75 | 2.60 | 44.31 | 35.92 |
| 6 | Godrej Consumer | 816.25 | 83,460.44 | 20.69 | 20.26 | 47.51 | 34.07 | 4.49 | 20.47 | 24.45 |
| 7 | Marico | 472.55 | 61,023.53 | 44.27 | 36.95 | 52.51 | 35.90 | 4.86 | 42.88 | 35.81 |
| 8 | P & G Hygiene | 13,398.50 | 43,492.52 | 58.30 | 42.09 | 64.72 | 43.85 | 15.37 | 62.01 | 41.32 |
| 9 | Colgate-Palmoliv | 1,580.95 | 42,999.57 | 95.22 | 75.03 | 41.53 | 27.42 | 3.65 | 76.01 | 55.73 |
| 10 | Varun Beverages | 979.65 | 28,281.39 | 10.73 | 11.19 | 70.12 | 23.54 | 2.34 | 13.99 | 12.97 |
| 11 | Emami | 513.10 | 22,808.00 | 18.25 | 15.53 | 58.43 | 26.74 | -6.49 | 22.21 | 18.51 |
| 12 | Hatsun Agro | 869.25 | 18,738.58 | 20.34 | 25.58 | 76.06 | 25.50 | 2.30 | 16.48 | 23.04 |
| 13 | Gillette India | 5,496.65 | 17,913.58 | 37.91 | 27.31 | 54.64 | 33.75 | 9.79 | 46.53 | 31.80 |
| 14 | Zydus Wellness | 2,123.10 | 13,509.74 | 6.50 | 6.25 | 53.85 | 39.08 | 2.76 | 7.79 | 7.85 |
| 15 | KRBL | 231.70 | 5,453.98 | 20.88 | 19.07 | 9.56 | 6.39 | 2.39 | 20.50 | 20.53 |
- ROCE % – Return on Capital Employed in percentage, per-annum.
- ROE % – Return on Equity in percentage, per-annum.
- P/E – Price to Earnings ratio.
- EV/EBITDA – Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization expenses.
- PEG – Price to Earnings Growth ratio.
- ROCE 5 Years – Return on Capital Employed in percentage, 5 years average.
- ROE 5 Years – Return on Equity in percentage, 5 years average.
HUL
Hindustan Unilever is in the FMCG business comprising primarily Home Care, Beauty & Personal Care, and Foods & Refreshment segments. The Company has manufacturing facilities across the country and sells primarily in India. HUL is the largest FMCG company in India with a market capitalization of a behemoth 557k crore.
The company is valued at a premium rate. And, the company is virtually debt-free, with a cash position that could serve the interest coverage 93.68 times. The company seems to have reached its saturation point. But, thanks to its diverse product portfolio. The company has achieved market heights that only a few companies could reach.
Products – Food and Refreshment products such as Horlicks, Boost, Cornetto & Magnum (Ice-cream), Knorr (Soup), BRU, Lipton, Red label, Brooke Bond & Taj Mahal (Tea products), Annapurna (Salt, Atta, and others).
Home care products such as Comfort, Wheel, Domex, Rin, Surf excel, Vim, Cif, and others.
Beauty and Personal care products such as AXE, Rexona (deodorants), Dove, Lifebuoy, LUX, Pears (soaps) Ponds, Pepsodent, Closeup (Toothpaste), Sunsilk, Vaseline, Lakme, Fair & Lovely, and many more.
ITC Limited
ITC is the largest cigarette manufacturer and seller in the country. ITC operates in five business segments at present – FMCG Cigarettes, FMCG Others, Hotels, Paperboards, Paper and Packaging, and Agri-Business. The company is valued at over 255k crore.
ITC seems to be undervalued thanks to its Tobacco business. The company is virtually debt-free and has an interest coverage rate at the highest of 314.04 times. ITC is flooding with cash reserves and it seems as if there’s no limit. The company’s operating performance is reasonably well.
Products – Consumer items such as Aashirvaad, Sunfeast, Bingo, Yippee, B-Natural, Mint-o, Candyman, Gumon, Farmland, Body care products such as Vivel, Engage, Superia, Nimyle, Savlon, and many more.
Nestle India
Nestle India Limited is an India-based company engaged in the food business. The Company operates in the Food segment. It is India’s 3rd largest FMCG Company. A well-established Multinational Company (MNC) reached India to grab the population-driven opportunities early on. Hence, achieved a humongous market capitalization of over 165k crore.
The company is valued at a premium rate. And, the debt-to-equity ratio at a mere 1:0.07. The company got interest coverage ability at 17.48 times, Hence, a comfortable cash position. Nestle’s operating efficiency and performance figures are extremely high and favorable. The company has been able to monetize its market dominance extremely well.
Products – Nestle snack bars such as Munch, Kitkat, Milkybar, and others. Maggi, Nescafe, NesPlus and many more.
Dabur India
Dabur India is one of the leading fast-moving consumer goods (FMCG) players and the largest in dealing with consumer care and food products that are predominantly ayurvedic and allied products. The company has a market capitalization of over 93k crore.
Dabur is valued reasonably well. And, the company’s debt-to-equity stands at a mere 1:0.06. With interest coverage ability at an amazing 67.73 times. Hence, a more than comfortable liquidity position. The company’s operating performance is reasonably decent.
Products – Hair oil & shampoo such as Amla, Vatika, Almond, Real juice, Dabur Red paste, Honey, Chyawanprash and Hajmola (Digestives), and many more.
Britannia Industries
Britannia Industries is one of India’s leading food companies with a 100-year legacy. Part of Wadia Group, Britannia is among the most trusted food brands. The britannias product portfolio includes Biscuits, Bread, Cakes, Rusk, and Dairy products including Cheese, Beverages, Milk, and Yoghurt.
The company has a market capitalization worth over 85k crore. Britannia is fairly valued. The company’s debt-to-equity ratio is at 1:0.59 with interest coverage ability at 23.67 times. Reasonably cash positive company. The company’s operating performance is excellent and shows no signs of stopping.
Products – Biscuits such as Good Day, Crackers, Marie Gold, Tiger, Bourbon, Little Hearts, Jim-Jam and others, Bread, Diary products, Cakes, Rusks and Creme wafers and many more.
Godrej Consumer
Godrej Consumer Products is engaged in a fast-moving consumer goods company, manufacturing and marketing Household, and Personal Care products. The company holds a market capitalization of over 84k crore.
It is fairly valued. And, the debt-to-equity ratio is at a mere 1:0.09 with interest coverage ability at 17.78 times. Reasonably cash positive company. The company’s operating performance and financial figures are comparatively low in regards to companies peer’s performance.
Products – Goodnight & HIT (Mosquito repellent), Cinthol, Issue & Ilicit (Hair products), Mitu (Baby products), Aer (Room fresheners), and many more.
Marico
Marico Limited is one of India’s leading consumer goods companies operating in the health, beauty, and wellness space. It has nurtured over 25 brands in the categories of hair care, skincare, edible oils, healthy foods, male grooming, fabric care, and hygiene. The company has a market capitalization worth over 61k crore.
The company is fairly valued. And, holds a debt-to-equity position of 1:0.11. With interest coverage ability at 44.27 times. Hence, a quite comfortable cash position. The company’s operating performance is excellent and shows no signs of stopping.
Products – Hair oil brand Parachute Coconut Oil and others, Saffola products, Kaya youth, Set-Wet (body deodorants), and many more.
Colgate-Palmoliv
Colgate-Palmolive (India) in the business of Personal Care (including Oral Care). The company got a market capitalization worth over 43k crore. Colgate is the market leader in Oral Care products.
The company is fairly valued. And, holds a debt-to-equity position of 1:0.01. With interest coverage ability at an outstanding 186.98 times. Extremely cash-positive company. The company’s operating performance and financial figures are excellent. But, due to the advent of newcomers into the market and highly concentrated product portfolio. The company’s future looks slim.
Products – Colgate toothpaste such as Colgate Diabetics, Total, 360, MaxFresh, Sensitive Original & Strong Teeth, and many more.
P & G Hygiene
Procter & Gamble Hygiene and Health Care is engaged in the manufacturing and selling of branded packaged fast-moving consumer goods in the femcare and healthcare businesses. P&G’s market capital is worth over 43k crore.
The company is valued at a premium. P&G is virtually debt-free with an outstanding cash position to cover interest at 142.47 times. Extremely cash-positive business. The company’s operating and financial figures are very favorable.
Products – Hygiene and personal care products such as Whisper, Pampers, Gillette (Grooming), Vicks, Olay, Fabric care such as Ariel and Tide, Haircare products such as Head & Shoulders, Pantene, Oral care, and many more.
Varun Beverages
Varun Beverages Ltd has been associated with PepsiCo since the 1990s and is a key player in the beverage industry and one of the largest franchisees of PepsiCo in the world. The company produces and distributes a wide range of carbonated soft drinks, non-carbonated drinks, and packaged water sold under trademarks owned by PepsiCo.
The company is worth over 29k crore. Is valued at a premium price. Varun Beverage’s debt position is at 1:0.91. And, interest coverage is a mere 3.18 times. Business is of cash consuming one but the liquidity position is average. Companies operating and financial figures are below average.
Products – Beverages such as Pepsi, 7Up, Mountain Dew, Mirinda, Slice, Tropicana, Aquafina (water), and many more.
Emami
Emami is engaged in the manufacturing & marketing of personal care & healthcare products with an enviable portfolio. The company is valued at over 22k crore. And, has a unique product portfolio.
The company is relatively overvalued. Emami debt-to-equity position is at 1:0.11. With Interest coverage ratio at 44.02 times. Hence, a comfortable cash position. The company’s operating and financial performance figures are average.
Products – Emami Hair colors and oil products such as Navratna and Keshking, Fair & Handsome, Boroplus (powder), Zandu Balm, HE (Grooming products), Emasol, Creme 21, and many more.
Hatsun Agro Products
Hatsun Agro Product Limited has been in business for over 5 decades and achieved the position of the largest private-sector industry in the Dairy sector manufacturing and marketing Milk and Milk products, Ice-Cream, etc. The company is valued at market capital of over 18k crore.
The company is valued at a premium rate. And, the debt-to-equity position isn’t positive for the same stands at 1:1.28. Hatsun’s interest coverage rate is at a mere 4.30 times. Hence, the cash position isn’t favorable either. The company’s operating and productivity level is reasonable.
Products – Ice-creams such as Arun, Ibaco, Milk products such as Arokya, Santosa, Aniva, Hatsun Dairy Ingredients, Hatsun Daily, Oyalo Pizza, and many more.
Gillette India
Gillette India is engaged in the manufacturing and sale of branded packaged fast-moving consumer goods in the grooming, portable power, and oral care businesses. The company’s market capitalization is at over 18k crore. And, is the market leader in regards to ‘Men’s grooming – Shaving products’.
The Company is a Sub-brand of “P&G”. And, is reasonably priced. Gillette is a virtually debt-free company with interest coverage ability at a stunning 91.42 times. Hence, a healthy cash-positive company. Companies operating and financial performance is at a positive note.
Products – Hygiene and personal care products such as Whisper, Pampers, Gillette (Grooming), Vicks, Olay, Fabric care such as Ariel and Tide, Hair care products such as Head & Shoulders, Pantene, Oral care, and many more.
Zydus Wellness
Zydus Wellness operates as an integrated consumer Company with business encompassing the entire value chain in the development, production, marketing, and distribution of health and wellness products. The company is valued at a market capitalization of 13k crore.
The company is fairly valued. And, holds a debt-to-equity position of 1:0.12. With interest coverage ability at a mere 3.92 times. Hence, a quite average cash position. The company’s operating performance is below average at just in single digit.
Products – Complan, Sugarfree, Glucon-D, Everyuth, Nycil, Nutralite, Sugarlite, and many more.
KRBL
KRBL is the world’s leading basmati rice producer and has fully integrated operations in every aspect of the basmati value chain, right from seed development, contract farming, procurement of paddy, storage, processing, packaging, branding, and marketing. The company is valued at over 5k crore.
KRBL seems undervalued. The company’s debt-to-equity position is at a mere 1:0.05. And, an interest coverage rate at 23.11 times. KRBL’s operating and financial performance is reasonably well.
Products – Basmati rice brands such as India Gate, Doon, Nur Jahan, Indian Farm, Bemisal, and many more.
Final thoughts:
Every aspect of our existence is dependent on FMCG (Fast Moving Consumer Goods) products that meet our fundamental needs. FMCG products are those that have a short shelf life, are produced in large quantities at a low cost, and are designed for immediate consumption.
This industry encompasses a variety of products, including household goods, over-the-counter medications, food, personal care products, stationery, and consumer electronics. Fast-moving consumer goods (FMCG) is India’s fourth-largest sector, employing over three million people.
FMCGs are becoming more important as people’s desires grow and their quality of life improves. To meet these criteria, various other FMCG companies fight for a major share of this industry. Among them are HUL, ITC, Dabur, Marico, and others.
In this highly competitive environment, FMCGs have maintained customer satisfaction by expanding to every nook and cranny of the country, thereby integrating each and every FMCG into the economy.
If there is any sector that is evergreen and the chances of having double-digit growth in its revenue, then that’s FMCG. Fast Moving Consumer Goods is an Investment worthy sector for a country such as India. The reason being India’s sheer size of population which stands at a little shy of 1.4 billion.
Disclaimer: All the information on this website is published in good faith and for general information purpose only.
