FMCG Stocks to Buy: As domestic vast fast-moving consumer goods (FMCG) sector shows signs of recovery—particularly in rural areas—analysts have identifying profit-booking opportunities in the industry.
Analysts at Anand Rathi brokerage has highlighted several FMCG stocks that could give returns in the future term term.
FMCG sector performance
According to the brokerage, the FMCG sector recorded a 10.7 per cent year-on-year growth in Q4 FY25, up from 10.6 per cent in the previous quarter. While volume growth moderated to 5.1 per cent, from 7.1 per cent in the previous quarter and pricing growth also improved to 5.6 per cent.
The noticeable fact is that rural region-market outperform urban areas with volume growth of 8.4 per cent which is almost four times higher than urban areas (2.6 per cent). This is the fourth consecutive quarter of rural outperformance.
Early eeather risks could impact summer demand
Analysts at the brokerage caution that unseasonal rainfall in April and May may affect demand for summer-centric products such as soft drinks, ice creams, and skincare items.
While some manufacturers of summer products may face short-term challenges, the brokerage remains optimistic about overall demand recovery—especially in rural regions.
Impact of input inflation on industry
Margins were under pressure in Q4 due to rising input costs of key raw materials such as palm oil, cocoa, milk, tea, and wheat. However, a decline in commodity prices along with price hikes expected in the second half of FY25 and early FY26.
What is input inflation?
Input inflation which is also known as cost-push inflation is refers to rising production costs driven by higher prices for raw materials, labor, transportation or energy which in turn raises the prices of final goods.
How quick commerce is fueling growth
Modern e-commerce and quick commerce platforms recorded a 40 per cent growth in Q4 across major metro cities, according to the brokerage.
What should long-term investors do?
Analysts noted that most major FMCG stocks have gained between 5 per cent and 20 per cent over the last three months, following declines in the previous six months. Meanwhile, Dabur and Colgate have showed flat to slightly negative performance. Due this analysts said that valuations of several firms are normalised to historical averages and future returns are expected.
They (analysts) have estimated a 9 per cent revenue CAGR and 14 per cent earnings CAGR in FY25–27.
Analysts are bullish on HUL, Godrej Consumers, UBL, other stocks; check out targets
Anand Rathi has suggested several stock from the FMCG industry, including Hindustan Unilever Ltd (HUL), Godrej Consumer Products Limited (GCPL), and United Breweries Ltd (UBL). Here are analysts’ recommendations along with respective targets:
HUL share price target
The brokerage recommends buying HUL shares for a share price target of Rs 2,840.
Godrej Consumer Products share price target
For the Godrej Consumer stock, the brokerage has ‘buy’ stance with a target of Rs 1,430 per share.
Emami share price target
Analysts recommend buying Emami shares for share price target of Rs 840.
Zydus Wellness share price target
Anand Rathi suggest buying Zydus Wellness shares for a target of Rs 2,570 per share. The brokerage recommend buying Mrs Bector Food shares for a target of Rs 1,875.
Mrs Bector Food share price target
The brokerage recommend buying Mrs Bector Food shares for a target of Rs 1,875.
| Company | Recommendation | Target Share Price |
|---|---|---|
| HUL | Buy | Rs 2,840 |
| GCPL | Buy | Rs 1,430 |
| Emami | Buy | Rs 840 |
| Zydus Wellness | Buy | Rs 2,570 |
| Mrs Bector Food | Buy | Rs 1,875 |
(Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.)
