FMCG sector of India has been growing at an exponential rate since a decade. The largest segment being the food that occupies 43% of share, and personal care that has a share of 22%. The FMCG sector which currently stands at a total market size of Rs. 2,000 billion and more is expected to become Rs. 4,000 to Rs. 6,200 billion by the end of the financial year 2020.

It may also interest you to know that FMCG sector which has grown at a CAGR of 11 % over the last decade is expected to grow at CAGR of 12-17% in the next 5 years, as per the report published by Confederation of Indian Industry (CII). The reasons for this incredible growth cited are rising GDP, more working Indians, rising income, and more media penetration.

Talking about the top FMCG stocks to invest in Q2, the list includes ITC, Britannia, Colgate Palmolive, Hindustan Unilever, and Dabur India. ITC share price can also reach a high soon as it sweeps away most of the cigarette business. The scope of cigarette industry is huge as India’s young economy has growing income, about 100 million people will be at the age of 18 in the next 5 years as per the Census India 2011, and todays’ youngsters are more prone to the western culture, creating a huge demand for cigarettes. ITC also has a very strong distribution network with more than 2 million retail outlets. The company is also into retailing and hotel sector with products in confectionaries, noodles, soaps, shampoos, and ready to eat food. Hence, the investors must strongly consider to invest in ITC.

Coming to the next in line Britannia industries, it boasts of a strong brand presence when we talk about the Biscuit Market in India. The company stands at a second position in the Indian biscuit market. It shares a 30% market share. The company also believes in the diversification of its products. They have a presence in the dairy, bakery and healthy breakfast. They are also sure to do a premiumization of their products to achieve higher returns. The company aims to increase its rural market share from current 70% to 1.5 times over next 2-3 years.

Indian Oral Care Industry expert Colgate has a huge potential too as the industry is going to grow at CAGR of 9 % over the next decade. Having a market penetration of 55% as compared to the U.S.A market where penetration is 97%, there lies a huge opportunity. The toothpaste market will have a better growth in coming years as there has been a shift from the traditional dental products to the toothpastes due to the increased promotion and awareness.

Likewise, live share market,as per Hindustan Unilever holds a strong presence in the soaps & detergents category. It has a powerful brand portfolio in the personal care segment. Its personal care segment pays 47% to EBIT. It is the second largest Indian tea company and is also growing in the coffee segment which is getting them huge revenue.

Dabur India, identified as a natural and herbal product line, has an expansive distribution network and a diversified business mix making it a steady gainer in revenue and profits.

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