FMCG Sector Check - Falling Inflation, Likely Normal Monsoon Seen Boosting Demand: Anand Rathi

Anand Rathi Report

Most FMCG companies and those that operate in consumer discretionaries are up at least 10% post-elections, due to their defensive nature and optimism about better prospects.

A host of tailwinds—monsoon-led rural revival, post-election focus on social welfare and crude price-led margin buoyancy—augur well for the sector.

For the companies we cover, we estimate an average 13% earnings CAGR over FY24-26, assisted by gross-margin gains and recovering demand.

We cover four of the ten companies we hosted/interacted: Godrej Consumer, United Spirits, Radico Khaitan and Zydus Wellness.

We have Buy recommendations on Godrej Consumer and Zydus Wellness and Hold recommendations on United Spirits and Radico Khaitan.

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