Which is The No 1 FMCG Company In India ?

Our Everyday life is solely dependent on FMCG (Fast Moving Consumer Goods) products from morning to night.This Sector is the India's fourth largest sector & engaged 3.2 million people directly or indirectly.The demand of FMCG products are growing rapidly.Due to low cost & very fast consumption, FMCG products are produced in large volume. This sectors basically covers Processed foods, Drinks,Beverages,Personal care products,Medicines,Cleaning Products,Toiletries,Office Supplies
Today we have done detailed fundamental comparison of  top 6  FMCG Companies in India. This companion is based on Quality & Valuation.

Comparison Of 6 good FMCG Companies by  Fundamental Analysis.

Companies selected for analysis

      1) GODREJCP                        2) MARICO                                    3) HINDUNILVR

      4) DABUR                               5) ITC                                             6) TATA CONSUMER

Process Of Analysis & Understanding of Rank & Score considering Quality & Valuation

A) Comparison considering Quality

Here , 1 means that the company has scored lowest points and 5 means the company has scored highest points.

Here we have analysed considering ten matrices as below :

         1) Current Ratio                                 2) Return on Capital Employed(ROCE)   

         3) Return on Equity (ROE)               4) Retun on Asset (ROA)            

         5) Debt to Equity Ratio(D/E)            6) Inventory Turnover Ratio

        7) Interest Coverage Ratio                8) Operating Profit Margin             

        9) 5 year sales & Profit Growth        10) 5 year sales & Profit Growth    

Comparing  the quality aspects HINDUNILVR is Ranked One &  GODREJ CONSUMER Is Ranked Sixth.

A) Comparison considering Valuation

Here we have valued Stock Price((Highest(6) to Lowest(1)) considering ten matrices as below :

        1) Price/ Earning  to Earnings Growth Ratio(PEG Ratio)    2) Price to sales Ratio (P/S ratio)   

        3) Price to Book Value (P/B Ratio)                                       4) Price/ Earning (PE Ratio)            

        5) Dividend Yield (D/Y ratio)                                                 6) EV/EBITDA Ratio(Lower Better)

        7)EV/Sales Ratio                                                                   8) PEXPB (Lower Better)             

        9) Price to free Cash Flow (Price /FCF)                             10) Price To Graham No(lower Better)    

Comparing  the Valuation  aspects ITC is Ranked One (Cheapest Price) & DABUR is Ranked Sixth (High price).

Please note that this is not any buy and sell recommendation , only a comparative study for education purpose only.

Tata Consumer :A Rising Star in FMCG

Tata Consumer Products, is the India’s leading Branded Tea packet company. About 60% of revenue generated from Tea and coffee business. Recently company presented very Good performance not only in Tea business but other food business also presented robust performance in both Inside & outside India.

In the upcoming semi-annual review Tata Consumer Products may be included in the Nifty index for the rebalancing in March ‘2021, said Edelweiss Alternative Research.

ICRA UPGRADED the rating for the short-term instruments of Tata Consumer Products worth Rs 715 crore at A1-plus and also reaffirmed the rating for the long terrm instruments of Tata Consumer Products to 'ICRA AAA' with a stable outlook from AA-plus earlier. The company has low debt with FII / FPI or institutions increasing their shareholding.

In the Beverages business, Tata Consumer Products is the 2nd largest player in branded tea in the world with over 330 million servings everyday across the world. Their brands include Tata Tea, Tetley, Vitax, Eight O’Clock Coffee, Himalayan Natural Mineral Water, Tata Coffee Grand and Joekels. It is home to key brands such as Tata Tea, Tetley, Tata Salt and Tata Sampann.
Their Tata Tea brand is No.1 in terms of volume and No.2 in terms of value. Tetley brand is among the top 3 in the UK and Canada along with Eight O’ Clock which is the 4th largest player in coffee bags in the US.

Financial Snapshot

• TATACONSUM's forecast earnings growth (17.5% per year) is above the savings rate (7%).
  
  
• TATACONSUM's earnings have grown significantly by 22.7% per year over the past 5 years.
  
  
• TATACONSUM's earnings growth over the past year (38.8%) exceeds its 5-year average 
  (22.7% per year).
• TATACONSUM's earnings growth over the past year (38.8%) exceeded the Food industry
  20%. 
• TATACONSUM's debt to equity ratio has reduced from 20.5% to 7.5% over the past 5 years. 
  
  
• TATACONSUM's debt is well covered by operating cash flow (121.5%).
  
  
•  TATACONSUM's dividend payments have increased over the past 10 years. 
  
  
• TATACONSUM's dividends in 3 years are forecast to be well covered by earnings (39.6% payout ratio). 
  
  
• TATACONSUM's portfolio of products ranges from tea, coffee, water and ready-to-drink to salt, pulses, spices, ready-to-eat and more.
  
  The company overall shows promising growth opportunities and business synergies
  

Technical Outlook(Cmp Rs.601.50) 

Last Week Tata Consumer  given breakout just above Rs. 600. Traders & investors may buy keeping stop loss Rs. 550 for the target of Rs. 655+ shortly if sustain above 600. Investors are advised to buy every dips for the log term view & this stock must be in every portfolio.