Stocks to buy: HUL, Godrej Consumer, Emami among five FMCG stock picks by Anand Rathi

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Godrej Consumer Products among large-caps and Zydus Wellness and Emami among midcap FMCG stocks. United Breweries is its sole preferred pick in consumer discretionary and has upgraded the stock to a ‘Buy’. Here are the top FMCG stocks to buy: With a subdued FY24 (favourable base) and early signs of demand revival in rural markets and in the non-food category, Hindustan Unilever should benefit in FY25.

However, gross margin gains would be limited to 60 bps in FY25 on favourable input prices. Volume recovery and modest margin expansion should help to steady earnings growth of 13% in FY25, though intense competition (especially from small players) remains a concern, Anand Rathi said. The valuation at 48x on FY25e versus the 10-year average of 51x is attractive, it added.

The brokerage has a ‘Buy’ rating on the stock with a target price of ₹3,100 per share. Also Read: Stocks to buy: Navin Fluorine, Neogen, Galaxy Surfactants among top picks in chemical sector by HDFC Securities Godrej Consumer Products saw consistently better Q3 volume growth in domestic markets. This, and favourable input costs aided its strong gross-margin gains, a part of which was invested in higher brand spends.

The brokerage expects the company’s core categories’ market share to rise, aided by innovations. It believes the valuation has risen recently but is likely to stay high due to better earnings assurance under Sitapathy’s leadership. It has a ‘Buy’ call on Godrej Consumer Products with a target of ₹1,350 per share.