TOP 5 FMCG COMPANY IN INDIA 2020
- You know when the COVID situation came the whole market went down the cause of which almost all sectors went down out of all these sectors, there was one sector which acted as a defensive sector means if you had stocks from that sector your stocks would not have gone down at the rate of the overall market. This sector name is the FMCG sector.
Do you know in the FMCG sector which are the top five companies these top companies that we have chosen the criteria?
We have kept for this is Operating Profit Margin cause Operating Profit Margin. There can be a red flag that which the company isn’t doing well. We will talk about the top 5 FMCG companies whose Operating Profit Margin is really good as overall compared to the whole industry
The first company whose operating profit margin is very good in the FMCG sector, If I talk about the first company. The first company is Colgate, You might have surely heard of Colgate. You might be using its products a lot If I tell you a bit about Colgate, then its market capitalization is more than 37000 Cr. If I talk about its PE ratio then its PE ratio is of 46, If I talk about the overall FMCG sector PE ratio then the average comes out as around 42 compared to the industry, Colgate PE ratio is higher, after PE Ratio, now I will talk about this criteria on the basis of which we chose Colgate bunder top FMCGs as I told you at the beginning, For today, criteria would be which companies have the best operating profit margin.
Colgate operating profit margin
Now you would want to know Colgate operating profit margin. So, if I talk about Colgate operating profit margin then their operating margin comes out as 26.6% which is a good number for an FMCG sector if you don’t know what operating profit margin is, so I will tell you a bit about it.
What is operating profit margin?
The operating profit margin tells you that if a company made a sale of Rs 100 and its expense was Rs. 80 then margin comes out as Rs. 20. So in this case, your operating profit margin comes out as 20% so the higher a company operating profit is that means that the company is using its resources efficiently and the company efficiency in overall production is high.
Now, let talk about the Colgate shareholding pattern.
How is their shareholding pattern?
So first I will talk about Total Promotor Holding that how much percent holding does their promotor own. So if I talk about Colgate then the promotor of this company has 50.99% holding which has remained constant if I compare it to June 2019 and if I talk about mutual fund holdings there that how has mutual fund invested in this company so mutual fund out of its total shareholding pattern used to be 6.09% in December 2018 which has reduced to 3.66% so the mutual funds holding a share in this company has reduced a bit in a few years.
2. Emami Ltd
Now, let talk about the second company. The name of the company is Emami Ltd. If I talk about its market capitalization, it is more than 10000cr but it is important for you to know what its operating profit margin is like I have explained to you before that this is completely based on Operating Profit Margin and FMCG market, operating profit margin is an important criterion.
So if I talk about Emami Ltd is operating profit margin comes out at about 26%. So, if I talk about this company PE Ratio then this company PE ratio comes out at around 34% and if we compare its PE ratio with the industry then the FMCG sector industry PE ratio comes out as about 42%.
The company PE ratio is lesser in comparison which comes out as a good point and if I talk about Emami brands the brands that you use in your daily life are Boroplus, Navratna oil, Jhandu Balmand many other products that you use in your daily life. Now let talk about its promoter holding, How much is it promoter holding? If I talk about Emami Ltd, its promoter holding is more than 52% but there is an important thing here that you need to focus on so out of its total promotor holding of 52% out of which 90% of its holding has been pledged somewhere and if we talk about its mutual fund holding then out of its total holding, 24% is its mutual fund holding. Which has increased in the past few quarters?
3. Hindustan Unilever Ltd
Now let talk about the third company and of the third company, mostly I wouldn’t even have to introduce. The hint is that it is India’s biggest FMCG sector company. Yeah, you might have guessed it correct Hindustan Unilever Limited. If I talk about Hindustan Unilever Limited then this company market capitalization is more than 5,10,000Cr. Which makes it one of the top five India FMCG companies.
HUL operating profit margin
If I talk about this company operating profit margin then the profit margin comes out as 24.8% which is considered to be a good percentage in this industry and if I talk about the HUL PE ratio then the HUL PE ratio comes out at around 69% which in comparison to the FMCG sector.
Avg PE ratio is around 42% in comparison to that, this company PE ratio is higher. If I talk about HUL shareholding pattern then the promotor holding comes at around 61.90%. And if we compare it to the earlier quarter – then there we can see a bit of increment. Whenever there is an increase in the promotor holding. It is considered to be a positive thing in the industry. If I talk about mutual fund holding then in the whole shareholding, mutual fund holding is only 2.58%. It quite constant if I compare it to the previous few quarters.
4. Nestle India Ltd
Now, let talk about the fourth company. If I give you a small introduction to the fourth company. Then you might have definitely used its products in your college If not in college, then in real life you might have used this product. This product name is Maggi and the company which owns Maggi brand is Nestle India Ltd.
If I talk a bit about Nestle India Ltd then this company market capitalization is around 1,60,000Cr and if I talk about its share price then one share of this company trades in Rs 18000Cr. You know that in the last year the market has given a very negative return.
If I tell you about Nestle India last one year returns then this company has given a return of almost 42%. This means when the market going down a lot this company was doing well in comparison.
Operating profit margin of Nestle
Now if we talk about operating profit margin. That how much is the operating profit margin of Nestle India. The operating profit margin at around 23.8% which is considered to be a good percentage in the industry.
Let talk about Nestle price to earning ratio. If I talk about its PE ratio then this company ratio comes around 80% which is way higher than its industry average, the industry average many times in this comes at around 42%. So in comparison to the industry, its PE ratio is way higher.
5. Godrej Consumer Ltd
Let talk about the fifth and last company. The name of the company is Godrej Consumer Ltd. If I tell you about this company in detail then its market capitalization is more than 73000Cr. If we talk about Godrej Product Ltd PE ratio. Then its PE ratio is around 47%. If I compare it to the industry PE ratio. Its industry PE ratio comes around 42%. In comparison to which the PE ratio is not much higher in the last one year.
This company has given a negative return of 18%. But then the interesting thing about this company is when the news about COVID was on the peak at that time this company share price touched Rs 235Cr. After which it rebounds and has shown a good recovery even after bad times. If we talk about this company operating profit margin then this company operating profit margin is more than 21% which is considered to be a good no. in the FMCG sector.
I’d really appreciate and thank you guys for reading.
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