Due to slow demand growth, particularly in rural regions, fast-moving consumer goods (FMCG) companies—mostly staple companies—have found it difficult to increase their volume growth in recent years.
In contrast to a few smaller FMCG companies that have, on average, generated low to mid-teens volume growth, domestic brokerage LKP Securities observed that large consumer staple companies reported an average mid- to high single-digit volume growth between FY20-24.
This indicates that compared to their larger contemporaries, these businesses are expanding at least 1-2 times quicker and gaining a noticeable share of the market. In light of this, we have selected businesses that have significant volume growth, a larger TAM (Total Addressable Market), the capacity to take on major players, and solid fundamentals, according to LKP Securities.
These businesses are known as “Super Fast Moving Consumer Goods,” or Super FMCGs, according to the brokerage. The top FMCG stocks recommended by LKP Securities are Jyothy Laboratories Ltd., Mrs. Bector Food Specialities Ltd., and CCL Products.
FMCG Industry Analysis Even with obstacles including extreme heatwaves in the north, increased competition, and the impact of the general election, the majority of staple companies reported mid- to high-single-digit revenue increases.
With rural markets exceeding urban development, the growth was mostly driven by a rural rebound. Due in great part to distribution growth and region-specific launches, rural demand is still steadily improving and has already surpassed metropolitan areas.