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Are FMCG Stocks Overvalued?

Despite clocking single to low double-digit growth, FMCG stocks are trading at high multiples

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Published 3 years ago on Oct 25, 2018 2 minutes Read

Vinit Sambre, head-equities, DSP MF

FMCG stocks have been trading at very high valuations for the past year but with the broader correction their valuations have also corrected and thrown up buying opportunities. For the past few years, FMCG companies have seen volume growth of 7-9% but because of their cost rationalisation initiatives, premiumisation of products and overall deflationary environment, there was margin improvement. Post demonetisation and GST, FMCG companies didn’t take price hikes and passed on the benefits of lower tax rate. However, we are w

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