FMCG Sector: There’s a lot of chaos in the market at the moment. Nifty displayed both down and up movements on Friday.
The volatility of the stock market can be a shock to both investors and traders. Investors are now looking towards the FMCG sector to search for secure investment options.
It is believed that the FMCG sector is thought to be safe in an uncertain market which is why investors are now focusing on stocks that have reasonable valuations, including FMCG stocks such as ITC, Hindustan Unilever, Marico, and Tata Consumer.
Brokerage houses are also suggesting certain stocks in that FMCG sector.
The brokerage firm anticipates an increase within the FMCG sector by 2025 following an unseasonably slow year.
It is believed that the FMCG sector has been lagging in terms of growth in earnings in 2024 due to increasing inflation.
However the outlook for the sector could improve over the next few days, and businesses could see a price increase.
However, the brokerage stated that the market could remain in a restricted price range.
The brokerage says that according to its forecasts, the volume of staples, sales, and EBITDA will likely increase at 5.5 percent, 10 percent, and 12 percent, respectively, in the fiscal year 2026.
In the case of paints, it anticipates volumes, sales, and EBITDA to increase by 11 percent over the year.
The brokerage stated the report said that in a scenario of inflation, well-organized brands will take a cut from non-organized and regional players.
He stated that with a solid growth forecast for the future, valuations are also reasonable and it is recommended to buy ITC Limited.
The report also stated that there was the possibility of competition among Hindustan Unilever Limited and Marico Limited.
This brokerage firm has a goal price of Rs 575 for ITC as well as an HUL price is Rs 3100, and the price is Rs 760 mark for Marico.
Investors have shown interest in ITC following the merger. The stock is making a spotlight following the detachment of the hotel business from FMC.
FMCG’s huge stock ITC is the subject of attention following the long-awaited separation of ITC Hotels.
ITC Hotels will soon be able to be a separately listed company, and for now, the main focus is on the independent ITC and its value.
Quick Fact
Company name: ITC
| Company name | ITC |
|---|---|
| Sector | FMCG |
| Focus | Reasonable valuation, stable growth |
| Growth forecast | Positive by 2025 |
| Price Target | ₹575 (Possible target price) |
| Hotel business | Detached, independent listed entity |
Company name: Hindustan Unilever
| Company name | Hindustan Unilever |
|---|---|
| Sector | FMCG |
| Competition | Noted with Marico |
| Price Target | ₹3100 (Possible target price) |
Company name: Marico
| Company name | Marico |
|---|---|
| Sector | FMCG |
| Competition | Noted with Hindustan Unilever |
| Price Target | ₹760 (Possible target price) |
General FMCG Sector Insights
| Company name | FMCG Sector |
|---|---|
| Earnings growth | Lagging in 2024 due to inflation |
| 2026 forecast | Volume growth: 5.5% |
| 2026 forecast | Sales growth: 10% |
| 2026 forecast | EBITDA growth: 12% |
| Paint sector | Volume, sales, EBITDA to grow by 11% |
| Brand impact | Organized brands gaining over local |
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