JM Financial has released its Q4FY26 sector update for Indian consumer staples, characterizing the quarter as largely stable but emphasizing that sustained sales growth will be crucial for the sector's future performance. The brokerage noted that the consumer sector currently trades at a forward-looking price-to-earnings (NTM PE) multiple of approximately 52x, aligning closely with its 10-year historical average.
The report highlights an expectation for food and beverage players to continue their outperformance, driven by healthy EBITDA growth. However, the brokerage also cautioned about the impact of the West Asia crisis in March 2026, which led to significant increases in input costs, adverse currency movements, and supply chain disruptions. Most companies responded by implementing calibrated price hikes ranging from 3% to 7% to mitigate these effects.
Preferred FMCG Stocks
Amidst the market conditions, JM Financial remains selective, identifying a few FMCG heavyweights within its coverage universe as preferred stocks. The firm specifically named Marico Ltd, Honasa Consumer Ltd, Godrej Consumer Products Ltd (GCPL), and Varun Beverages Ltd (VBL) as its top picks.
Target Prices and Ratings
JM Financial maintains a bullish outlook on several players, assigning 'Buy' ratings to six stocks:
- Bikaji Foods International Ltd: Target price of Rs 755
- Britannia Industries Ltd: Target price of Rs 6,355
- Godrej Consumer Products Ltd (GCPL): Target price of Rs 1,225
- Honasa Consumer Ltd: Target price of Rs 420
- Marico Ltd: Target price of Rs 930
- Varun Beverages Ltd (VBL): Target price of Rs 600
Additionally, several other prominent companies received 'Add' ratings:
- Colgate Palmolive (India) Ltd: Target price of Rs 2,275
- Dabur India Ltd: Target price of Rs 505
- Hindustan Unilever Ltd (HUL): Target price of Rs 2,435
- ITC Ltd: Target price of Rs 325
- Tata Consumer Products Ltd (TCPL): Target price of Rs 1,250
Notably, Nestle India Ltd stands out as the sole stock to receive a 'Reduce' rating from JM Financial, with a target price set at Rs 1,345.