FMCG is arguably India’s favourite sector for stock market investment. The full form of FMCG is ‘Fast Moving Consumer Goods’.
Companies in the FMCG sector sell goods that are used by people in their day-to-day life. For example; cereals, bread, biscuits, soap, toothpaste, milk, fruits, vegetables, meat, alcohol, cigarattes, medicines that can be purchased without a prescription etc.
Top companies in the FMCG sector are highly-priced because people are dependent on their products. Even if India is going through an economic crisis, top FMCG companies will survive and perform better than companies in most other sectors.
During a severe recession, people will continue to buy milk, medicines, soaps, cereals etc. These are basic needs that are essential for survival. People who are addicted to alcohol and cigarattes might cut down on other unnecessary expenses, but will continue to drink and smoke – which makes some of these companies ‘recession proof’.
Top FMCG companies in India
- Hindustan Unilever Limited (HUL): HUL is the largest FMCG company in India. Nearly half of all fast moving consumer products that are sold at supermarkets are sold by HUL. Some of the brands they own are Surf Excel, Lux, Dove, Lifebuoy, Sunsilk, Fair & Lovely, Lakme, Taj Mahal, Cornetto, Annapurna, Axe, Pears, Lyril, Rexona, Vaseline, Brooke Bond, Bru, Close Up, Pepsodent… and the list goes on.
- ITC: 80% of all cigarettes that are sold in India are produced by ITC. Their cigarette brands include Gold Flake Kings, Wills Navy Cut etc. Apart from that, the company also has presence in other FMCG sectors like food (Aashirvaad, Sunfeast, Candyman) and personal care products (Fiama Di Wills, Vivel, Savlon). The company has created huge wealth for investors in the last 30 years.
- Nestle: The name itseld is synonyomous with quality. The company has household brands like Maggi, Nescafe, Cerelac, Milkybar, Milkmaid, Kitkat, Munch etc.
- Britannia: Almost every household in India consumes Britannia biscuits, Some of their brands include Marie Gold, Tiger, Good Day, Bourbon, 50:50, Little Hearts etc. From around 50 rupees per share in 2004 to 3100 rupees per share in 2019, the company has created massive wealth for its long-term shareholders.
- Colgate Palmolive: Who hasn’t used Colgate toothpaste? They have a variety of tootpastes, along with a huge range of products including body wash, baby diapers (Huggies) etc.
- Marico: Even if you haven’t ever heard of Marico, chances are that you’d be using Parachute, Saffola and Set Wet. Marico is the company behind these products.
The other popular companies that aren’t publicly listed in the stock market are India’s iconic company Amul, Parle and Patanjali.