The latest sector update from JM Financial outlined the Q4FY26 performance of Indian consumer staples. The brokerage describes the quarter as broadly stable but warns that maintaining sales growth will be the key driver going forward.
The consumer sector trades at a price-to-earnings multiple (NTM PE) of about 52 times, which closely tracks its 10-year historical average, the brokerage said, noting, “We expect the outperformance of food and beverage players to continue with healthy EBITDA growth.”
“The West Asia crisis on March 26 led to a sharp increase in input costs (raw derivatives, packaging costs, palm oil), negative currency movement and supply chain disruption. Most players have taken measured price increases (3-7%) to mitigate the impact of the conflict.”
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Amid this, the company favored a few heavyweights in the fast-moving consumer goods space. “We remain selective – we prefer Marico, Honasa, GCPL and VBL “Within our coverage,” the brokerage said.
Target price and valuations
JM Financial remains bullish for many players, placing a ‘buy’ rating on six stocks within its coverage universe. Bikaji Foods International Ltd has a target price of Rs 755. Likewise, Britannia Industries Ltd gets a ‘buy’ tag with a target of Rs 6,355. Godrej Consumer Products Ltd (GCPL) also has a ‘buy’ call with a target of Rs 1,225. Honasa Consumer Ltd has a ‘buy’ rating and a target of Rs 420.
Rounding out the top picks are Marico Ltd, with a ‘buy’ rating and a target of Rs 930, and Varun Beverages Ltd (VBL), which has a ‘buy’ call along with a price target of Rs 600.
While Colgate Palmolive (India) Ltd has a ‘Add’ rating with a target price of Rs 2,275. Dabur India Limited Hindustan Unilever Limited (HUL) Both received ‘Add’ ratings; Dabur’s target is set at Rs 505, while HUL’s target stands at Rs 2,435.
ITC LIMITED Carrying an ‘Add’ rating with a target of Rs 325, Tata Consumer Products Ltd (TCPL) also has an ‘Add’ rating with a target of Rs 1,250. Nestle India Ltd stands out as the only bearish call in the current universe of coverage. JM Financial has installed a ‘reduce’ rating on the FMCG giant, setting a price target of Rs 1,345.
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