ITC, Dabur, Godrej Consumer Lead FMCG Market Surge as Demand Outlook Brightens: Top 6 Picks to Watch

• The domestic FMCG sector shows promising growth prospects, driven by positive management commentary on the FY25 demand outlook and anticipated rural recovery.
• Despite short-term volatility, several FMCG stocks have seen decent gains recently, with the Nifty FMCG index climbing nearly 4 per cent since last month.
• Stocks such as Marico and Dabur have jumped over 10 per cent each over the last month, while shares of Godrej Consumer Products, Britannia Industries, United Breweries and United Spirits have jumped 5-4 per cent since last month.

Experts remain optimistic about the FMCG sector, pinning hopes on the revival of rural demand and suggesting several stocks from the space for healthy growth in the medium term.

Positive Outlook for FMCG Sector

Experts are optimistic about the FMCG sector, with expectations of a rural demand recovery driving this positive outlook. Emkay Global Financial Services suggests that the FMCG industry volume growth will likely rebound in FY25E, driven by rural recovery and favourable seasons. Abhishek Jain, the head of research at Arihant Capital, notes that while FMCG companies haven’t released any groundbreaking financial reports recently, there’s a lot of excitement surrounding a potential agri-sector revival.

FMCG Stocks to Watch

Brokerage firm Emkay Global prefers Dabur, Honasa Consumer, ITC and Emami from the FMCG pack. Amit Goel, Co-Founder & Chief Global Strategist at Pace 360, prefers ITC and Emami over other FMCG companies due to their low price-to-earnings (PE) ratios and excellent corporate governance standards. Prashanth Tapse, Senior VP Research at Mehta Equities, has a buy call on Godrej Consumer with a target price of ₹1,400 and a top loss of ₹1,280.

Conclusion

The FMCG sector shows promising growth prospects, driven by anticipated rural recovery and positive management commentary. Despite short-term volatility, several stocks from this sector are poised for healthy growth in the medium term. Investors are advised to consult certified experts before making any investment decisions.