INTRODUTION ABOUT FMCG SECTOR:

The Fast-moving consumer goods (FMCG) sector is the 4th largest sector of the Indian economy.
It is characterized by high turnover consumer packaged goods, i.e. goods that are produced,
distributed, marketed and consumed within a short span of time. FMCG products that
dominate the market today are detergents, toiletries, tooth cleaning products, cosmetics, etc.
The FMCG sector in India also includes pharmaceuticals, consumer electronics, soft drinks
packaged food products and chocolates. Since the sector encompasses a diverse range of
products, different companies dominate the market in various sub-sectors. However, some of
the top FMCG companies in India are- Dabur (60%), Colgate (54.7%), Hindustan Unilever
(54%).There are three main segments in the sector – food and beverages which accounts for 19
per cent of the sector, healthcare which accounts for 31 per cent and household and personal
care which accounts for the remaining 50 per cent. FMCG Companies are looking to invest in
energy efficient plants to benefit the society and lower costs in the long term. Patanjali will
spend Rs 5,197.85 crore (US$ 743.72 million) in various food parks in Maharashtra, Madhya
Pradesh, Assam, Andhra Pradesh and Uttar Pradesh. Dabur is planning to invest Rs 250-300
crore (US$ 38.79-46.55 million) in FY19 for capacity expansion and is also looking for
acquisitions in the domestic market. Investment intentions, related to FMCG sector, arising
from paper pulp, sugar, fermentation, food processing, vegetable oils and vanaspati, soaps,
cosmetics and toiletries industries, worth Rs 19,846 crore (US$ 2.84 billion) were implemented
up to November 2019.

IMPACT OF CORONAVIRUS ON FMCG SECTOR:

Not only FMCG sector the impact of coronavirus was affected on Banking, Automobiles, IT
sectors too. Coronavirus has made its way into India. Immediately lockdown was called to
contain the disease. which schools, malls, cinemas, gyms, offices, etc were shut down,
construction and all operations were stopped. Only essential services are permitted in the
lockdown period. Now, the lockdown may be enforced for a few weeks or months, but the
effect of the pandemic is long-lasting. In fact, it would take several months for the Indian
economy to return on track. Here are the few challenges faced by the FMCG sector:

Change in consumer buying behaviour due to coronavirus:

One of the significant main challenge of lockdown is panic shopping. The consumers are fearing
a shortage of essentials at their home. Hence they are buying excess just to ensure that they
won’t run out of essentials during these though time. The demand for household products and
FMCG goods is raising. Big brands have noted a surge in their demands. Even grocery stores are
reporting high demands for fresh vegetables, fruits, bread, wheat, oil, and other grocery items.
The movement of essential goods and the delivery of the orders have become major challenges
for brands.

Retailing challenges due to coronavirus lockdown:

there is a challenge for the field salesman in taking orders while maintaining ‘social distancing’.
Due to movement restrictions, salesmen are not able to visit physical outlets to book orders.
Hence, it’s becoming challenging for the salesman to receive orders and get it fulfilled through
distributors. On top of that, consumers are buying products in bulk without being brand
conscious. Hence, big brands are losing their loyalty to local brands.

Logistic problem:
As per current reports there is no shortage of consumer goods in India. However, the problem
is to maintaining inventories and manage supply chains. Sanitizers are out of stock in a few
retail stores. The other fast-moving consumer products such as flour, wheat, edible oil, noodles,
spices, sugar, salt, dairy products, rice, pulse, biscuits, cleaning tools, and detergents are
gradually going off the racks due to panic buying.

FUTURE AND FORECASTING OF FMCG SECTOR:

However, the government will still allow essential services and motivate manufacturers to
speed up the manufacture and delivery of safety and daily-need commodities. The supply of
sanitizers, handwash, cleaning products, soaps, and other hygiene products will surely improve.
the biggest challenge for retailers and FMCG brands is the lack of manpower and disrupted
production. The government has announced the supply of all kinds of essential products
catering to the unprecedented demands of people during this difficult lockdown period. Even
retailers are stocking up on the extra commodities to ensure a regular supply of items in any
uncertainty. So, we can expect things to become better for the brands.

TOP FMCG STOCKS LISTED IN NSE:

Hindustan Unilever LTD. (Current Stock Price- 2,168.20) as of 30/04/2020.

Colgate-Palmolive LTD. (Current Stock Price- 1,464.10) as of 30/04/2020.
ITC LTD. (Current Stock Price- 182.15) as of 30/04/2020.
Nestle India Limited (Current Stock Price- 17,707.80) as of 30/04/2020.
Britannia Industries Ltd (Current Stock Price- 3,168.90) as of 30/04/2020.
Marico LTD (Current Stock Price- 286.35) as of 30/04/2020.
Procter & Gamble Hygiene & Health Care (CSP-10,552.0) as of 30/04/2020.
Godrej Consumer Products Limited (CSP- 533.50) as of 30/04/2020.
Dabur India (CSP- 490.85) as of 30/04/2020.
 Varun Beverages Ltd. (CSP- 679.95) as of 30/04/2020.
Heritage Foods (CSP- 262.75) as of 30/04/2020.

EFFECT ON STOCK GROWTH: