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Top 5 Best FMCG stocks In India 2020 - Colgate, Emami, HUL, Nestle India, Godrej Consumer Products - YouTube
Channel: Groww
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Friends, you know when the Covid situation came
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the whole market went down
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cause of which almost all sectors went down
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out of all these sectors, there was one sector
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which acted as a defensive sector
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means if you had stocks from that sector
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your stocks would not have gone down at the rate of the overall market
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This sector's name is FMCG sector
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Do you know in FMCG sector which are the top five companies
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these top companies that we have chosen
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the criteria, we have kept for this is Operating Profit Margin
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cause Operating Profit Margin, as I told you in my last video
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there can be a red flag
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that which company isn't doing well
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In this video, we will talk about the top 5 FMCG companies
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whose Operating Profit Margin is really good
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as overall compared to the whole industry
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I, Jagdeep Singh, welcome you all to Groww Channel
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so friends, let's start our today's video
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but before starting the video, there is a very important thing
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If you have not subscribed to Groww's Channel yet
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then subscribe Groww's channel cause
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we add 3 to 4 videos on this channel for educational purposes
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which will help you a lot in gaining financial information
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If you are going to start with your journey in investing
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then these videos can be very helpful to you
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Now let's start today video and start with
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the first company whose operating profit margin is very good in the FMCG sector
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Friends, If I talk about the first company
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The first company is Colgate
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You might have surely heard of Colgate
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You might be using its products a lot
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If I tell you a bit about Colgate then
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then its market capitalization is more than 37000 Cr
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If I talk about its PE ratio
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then its PE ratio is of 46
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If I talk about the overall FMCG sector's PE ratio
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then the average comes out as around 42
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compared to the industry, Colgate's PE ratio is higher
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Friends, after PE Ratio, now I will talk about this criteria
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on the basis of which we chose Colgate
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under top FMCGs
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like I told you at the beginning of the video
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For today's video, criteria would be
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which companies have the best operating profit margin
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Now you would want to know Colgate's operating profit margin
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So friends, if I talk about Colgate's operating profit margin then
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their operating margin comes out as 26.6%
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which is a good number for an FMCG sector
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if you don't know what operating profit margin is
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so I will tell you a bit about it
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so operating profit margin tells you that
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if a company made a sale of Rs 100
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and its expense was Rs. 80 then margin comes out as Rs. 20
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so in this case, your operating profit margin comes out as 20%
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so the higher a company's operating profit is that means
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that the company is using its resources efficiently
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and the company's efficiency in overall production is high
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Now friends, let's talk about Colgate's shareholding pattern
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How is their shareholding pattern?
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So first I will talk about Total Promotor Holding
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that how much percent holding does their promotor's own
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So if I talk about Colgate then the promotor's of this company
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has 50.99% holding
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which has remained constant if I compare it to June 2019
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and if I talk about mutual fund holdings there
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that how has mutual fund invested in this company
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so mutual fund out of its total shareholding pattern used to be 6.09%
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in December, 2018 which has reduced to
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3.66%
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so the mutual funds holding's share in this company has
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reduced a bit in a few years
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Now friends, let's talk about the second company
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The name of the company is Emami Ltd
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If I talk about its market capitalization, it is more than 10000cr
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but it is important for you to know what its operating profit margin is
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like I have explained to you before
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that this video is completely based on Operating Profit Margin
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and FMCG market, operating profit margin is an important criterion
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so if I talk about Emami Ltd
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its operating profit margin comes out at about 26%
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So friends, if I talk about this company's PE Ratio
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then this company's PE ratio comes out at around 34%
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and if we compare its PE ratio with the industry's
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then the FMCG sector industry's PE ratio comes out as about 42%
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The company's PE ratio is lesser in comparison which comes out as a good point
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and if I talk about Emami's brands
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the brands that you use in your daily life are
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Boroplus, Navratna oil, Jhandu Balm
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and many other products that you use in your daily life
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Friends, now let's talk about its promoter holding
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How much is it's promoter holding?
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If I talk about Emami Ltd, its promotor's holding is more than 52%
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but there is an important thing here that you need to focus on
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so out of its total promotor's holding of 52%
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out of which 90% of its holding has been pledged somewhere
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and if we talk about its mutual fund holding then
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then out of its total holding, 24% is its mutual fund's holding
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which has increased in the past few quarters
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Friends, now let's talk about the third company
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and of the third company, mostly I wouldn't even have to introduce
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The hint is that it is India's biggest FMCG sector's company
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Yea, you might have guessed it correct
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Hindustan Unilever Limited
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If I talk about Hindustan Unilever Limited
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then this company's market capitalization is more than 5,10,000 Cr
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which makes it one of the top five India's FMCG companies
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If I talk about this company's operating profit margin
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then the profit margin comes out as 24.8%
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which is considered to be a good percentage in this industry
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and if I talk about HUL's PE ratio then
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HUL's PE ratio comes out at around 69
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which in comparison to the FMCG sector's
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Avg PE ratio is around 42
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in comparison to that, this company's PE ratio is higher
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Friends, if I talk about HUL's shareholding pattern
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then the promotor holding comes at around 61.90%
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and if we compare it to the earlier quarter
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then there, we can see a bit of increment
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and whenever there is an increase in the promotor's holding
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it is considered to be a positive thing in the industry
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and if I talk about mutual fund holding
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then in the whole shareholding, mutual fund holding is only 2.58%
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it's quite constant if I compare it to the previous few quarters
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Now friends, let's talk about the fourth company
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If I give you a small introduction on the fourth company
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then you might have definitely used its products in your college
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If not in college, then in real life you might have used this product
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This product's name is Maggi
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and the company which owns Maggi brand is Nestle India Ltd
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If I talk a bit about Nestle India Ltd then this company
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then this company's market capitalization is around 1,60,000 Cr
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and if I talk about its share price then
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then one share of this company trades in Rs 18000
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and you know that in the last year the market has given a very negative return
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If I tell you about Nestle India's last one year's returns then
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then this company has given a return of almost 42%
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which means when the market going down a lot
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this company was doing well in comparison
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Friends, now if we talk about operating profit margin
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that how much is the operating profit margin of Nestle India
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then the operating profit margin at around 23.8%
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which is considered to be a good percentage in the industry
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Friends, let's talk about Nestle's price to earning ratio
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if I talk about its PE ratio
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then this company's ratio comes around 80
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which is way higher than its industry's average
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I have told you the industry's average many a times in this video
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It comes at around 42
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so in comparison to the industry, its PE ratio is way higher
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Now friends, let's talk about the fifth and last company
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The name of the company is Godrej Consumer Ltd
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If I tell you about this company in detail
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then its market capitalization is more than 73000 crores
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Friends, if we talk about Godrej Product Ltd's PE ratio
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then its PE ratio is around 47
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if I compare it to the industry's PE ratio
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Its industry's PE ratio comes around 42
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in comparison to which the PE ratio is not much higher
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in the last one year, this company has given a negative return of 18%
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but then the interesting thing about this company is
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When the new about COVID was on peak
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at that time this company's share price touched Rs 235
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after which it rebound and has shown a good recovery even after bad times
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If we talk about this company's operating profit margin
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then this company's operating profit margin is more than 21%
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which is considered to be a good no. in the FMCG sector
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So friends, the five companies that I spoke to you about
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was purely for educational purposes
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I wanted to tell you that in every industry
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operating profit margin is a very important parameter
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which shows you how well a company is utilizing its resources
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and whenever you do research and analysis
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study the operating profit of the company well
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If the company is growing
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then it is very important for the company's operating profit to remain constant
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or we should get to see improvements there
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so if you are not getting these improvements
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and the company's operating profit margin is very less
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then you should consider this as a red flag
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and avoid that company
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If you liked this video then like this video
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Comment and tell us which of them is your favorite company
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in which you have made an investment in
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or are thinking of making an investment
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so that from your comment
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we can learn from each other well
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and can create a good investor community
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If you have not subscribed to Groww's channel yet
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then subscribe to Groww's Channel
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cause we add 3 to 4 videos on educational purpose here
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which can help you in being an intelligent investor
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Happy Investing!
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