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FMCG Earnings to Surge: Key Stocks to Watch
23 Oct
Summary
- FMCG sector earnings expected to grow 15% annually.
- Marico, GCPL, Mrs Bector, and Asian Paints are top picks.
- Rising input costs and regulatory scrutiny pose challenges.
Indian FMCG stocks are poised for improved earnings growth over the next two financial years, from FY26 to FY28. Anand Rathi Research forecasts an approximate 10% revenue compound annual growth rate (CAGR) and a 15% earnings CAGR for 16 companies within its coverage universe. This signals a recovery from the subdued performance seen in FY25 and FY26.
Four companies have been identified as preferred picks: Marico, Godrej Consumer Products, Mrs Bector Food, and Asian Paints. These selections span both consumer staples and discretionary segments. The brokerage's optimism persists despite sector-wide pressures, including rising raw material costs for key commodities like sugar, wheat, copra, and crude oil.
Further challenges arise from increased regulatory scrutiny. While specific incidents involving Nestlé India and Hindustan Unilever are not expected to materially impact earnings, they may lead to higher compliance and communication costs across the food and FMCG industry, especially for health and nutrition-focused businesses.
