Fast-moving consumer goods (FMCG) companies (largely staple companies) have struggled to improve their volume growth in the last few years due to sluggish demand growth, especially in rural areas. Domestic brokerage LKP Securities noted large consumer staple companies reporting an average mid- to high single-digit volume growth between FY20-24, unlike a few smaller size FMCG companies, which have, on average, delivered low to mid-teens volume growth.
‘’This shows that these companies are notably gaining market share and growing at least by 1-2x faster than their larger peers. Based on this, we have identified companies with robust volume growth, presence in bigger TAM (Total Addressable Market), ability to compete with large companies, and strong fundamentals,” said LKP Securities.
The brokerage has termed these companies ‘Super Fast Moving Consumer Goods’ or Super FMCGs. LKP Securities’ top FMCG stock picks include Mrs.Bector Food Specialities, CCL Products, and Jyothy Laboratories Ltd.
