Nifty FMCG has gained 10.8% on a YTD basis in 2024; here are the top 3 stocks with the highest YTD returns in 2024

In 2024, the Nifty FMCG Index surged by 10.8% on a year-to-date basis (YTD), underperforming the benchmark NIFTY50’s 14.1% YTD return. The FMCG index remained negative in the first few months of 2024 due to inflationary pressure resulting in tighter margins. However as the broader market struggled amid election volatility, the investor's interest moved to earning certainty sectors such as FMCG. Further, the Budget 2024, prioritised enhancing rural consumption through increased allocations for various rural schemes, boosted the sentiments for the sector. Varun Beverages, Colgate and Balrampur Chini remained the best performers in the FMCG index.

Top 3 FMCG stocks with the highest YTD in 2024

Source: Spidersoftware IRIS PLUS

Varun Beverages Ltd (VBL) (YTD return 27.94%)

In Q1FY25, the company’s profit jumped 26% YoY to ₹1,252.6 crore and revenue jumped 28.3% YoY to ₹7,197 crore.

VBL’s rally of over 28% on a YTD basis can be attributed to significant volume and good profit growth in recent years. It was aided by demand surge due to the younger population, increasing disposable income and hottest summers, these drivers attracted buying interest in the stock.

VBL is expected to maintain earning momentum aided by India being increased penetration in newly acquired territories, continued expansion in capacity and distribution reach and growing refrigeration in rural and semi-rural areas.

Colgate Palmolive (India) Ltd (YTD return 46.80%)

The personal care company offers a diverse range of products including oral care products like toothpaste and toothbrushes, personal care items such as skin and hair care products, and expanded its product line to cater to dentists.

In Q1FY25, the company reported a 33% YoY rise in net profit at ₹363.98 crore, helped by a demand pickup and good performance of products. The improvement in profitability, strong volume and value growth in the toothpaste business, good return on equity and healthy dividend payout attracted investors' interest in the stock.

The growth momentum is expected to be maintained led by improving demand trends in rural markets, and increased product investments, such as higher advertisement and trade spending, brand building, and product innovation.

Balrampur Chini Mills Ltd (YTD return 36.8%)

India’s leading sugar manufacturing company and the first sugar company in the country to diversify its business from sugar to distillery and cogeneration. Its by-products ranged from Molasses, Alcohol, Ethanol and Bagasse to Power Generation.

In Q1FY25, EBITDA increased 1.8% YoY to ₹166.13 crore and revenue grew at 2.3% YoY to ₹1,422 crore. The company reported improvement in volumes and realisations in the sugar segment that supported its overall performance

Improvement in profitability in the previous few quarters and the government’s support for ethanol blending, have attracted large buying interest in the stock.

The stock has a positive outlook, due to the ethanol blending program. However sugar segment remains a point of concern, but the monsoon progression and MSP policy of the government would be key to evaluating the sugar sector.

Conclusion

Despite the FMCG Index’s initial underperformance in 2024, it gained momentum due to the sector’s earnings certainty amidst broader market volatility. VBL, Colgate and Balrampur Chini emerged as top performers, benefiting from strong volume growth, and improved profitability. The sector’s growth outlook remains positive, supported by rural demand and strategic expansions.