Best FMCG Penny Stocks to Buy in India

The best FMCG penny stocks in India can be lucrative for buyers wanting high-risk, high-reward investments. The fast-moving consumer goods (FMCG) sector, which includes companies making and selling essential home items, is a great hunting ground for penny stock buyers. This article will cover the best FMCG penny stocks to consider buying in India for 2024.

What is the Best FMCG Penny Stock?

The best FMCG penny stocks refer to shares of companies in the consumer goods industry that trade at a relatively low price, usually below ₹15-30 per share. These companies may be small or midsize, with excellent growth prospects, but are often missed by famous investors. Investing in FMCG penny stocks can offer substantial gains if the companies achieve significant growth and their stock prices improve.

Top 10 Best FMCG Penny Stocks in India

Mishtann Foods Ltd 
Mishtann Foods Ltd has low debt, zero promoter share pledge and foreign institutional investors have been raising their stake, though slowly. The stock is currently trading around Rs 18.3, while its 52-week high is ₹ 26.4  and 52-week low is ₹ 7.05. The PE ratio has been mostly in negative and the market cap is around ₹ 1,943 crore. Stock is trading at 6.22 times its book value as of 15-5-24. 

JHS Svendgaard Laboratories 
JHS Svendgaard Laboratories stock has has low debt and promoter share pledge. The stock is currently trading around ₹18.8, while its 52-week high is ₹ 39.5 and 52-week low is ₹ 15.5. The PE ratio has been mostly in negative and the market cap is around Rs 147 crore. Stock is trading at 0.87 times its book value

Tasty Dairy Specialities Ltd
Tasty Dairy Specialities Ltd Revenue and net profit have been improving high promoter share pledge is a negative. The stock is currently trading around ₹ 10.7, while its 52-week high is ₹ 17.6  and 52-week low is ₹ 8.21. The PE ratio negative and the market cap is around ₹ 21.9  crore. Stock is trading at 0.92 times its book value.

ANS Industries Limited
ANS Industries Limited company has low debt and net profit has improved but financial remain weak with stock below recent moving averages, making it a high risk. The stock is currently trading around ₹ 11.3, while its 52-week high is ₹ 16.2  and 52-week low is ₹ 0.00. The PE ratio negative and the market cap is around ₹ 10.4 crore. Company has reduced debt..

Sanwaria Consumer 
Sanwaria Consumers return on asset and net profit are improving for last two years, but it is still a high beta stock with many risks. The stock is currently trading around ₹ 0.35 paise, while its 52-week high is ₹ 0.65 and 52-week low is ₹ 0.25. The PE ratio has been mostly in negative and the market cap is around ₹ 25.8 crore. Promoter holding has decreased over last 3 years: -24.0%. 

Ajanta Soya Ltd
Incorporated in 1992, Ajanta Soya Ltd manufactures Vanaspati Oil and Refined Oil. Company is almost debt free. Though the company is reporting repeated profits, it is not paying out dividend Company has low interest coverage ratio. Contingent liabilities of Rs.91.4 Cr. Earnings include an other income of Rs.6.93 Cr.

M K Proteins Ltd
Incorporated in 2012, M K Proteins Ltd is engaged in manufacturing, trading, and production of Edible Oils. Company has reduced debt. Company has a good return on equity (ROE) track record: 3 Years ROE 30.1%. Debtor days have improved from 28.3 to 19.0 days. Stock is trading at 8.82 times its book value. Though the company is reporting repeated profits, it is not paying out dividend.

Sarveshwar Foods Ltd 
Sarveshwar Foods Limited, incorporated in 2004 in Jammu & Kashmir, is engaged in the manufacturing, trading and export of Basmati rice, which is a long grain rice with a fine texture. Debtor days have improved from 123 to 93.3 days. Stock is trading at 3.78 times its book value. Though the company is reporting repeated profits, it is not paying out dividend Company has low interest coverage ratio. The company has delivered a poor sales growth of 7.47% over past five years. Company has a low return on equity of 3.48% over last 3 years. Promoter holding has decreased over last 3 years: -18.8%.

Tricom Fruit Products Ltd
Incorporated in 1995, Tricom Fruit Products Ltd is in the business of Fruits processing. Promoter holding is low: 12.6%. Contingent liabilities of Rs.33.2 Cr. Promoters have pledged 62.7% of their holding.

Future Consumer Ltd 
Incorporated in 1996, Future Consumer Ltd is in the business of sourcing, manufacturing, branding, marketing and distribution of FMCG, Food and Processed Food Products. Company has reduced debt. Company has low interest coverage ratio.The company has delivered a poor sales growth of -33.8% over past five years. Promoter holding is low: 3.49%. Contingent liabilities of Rs.213 Cr. Promoter holding has decreased over last 3 years: -11.0%.

(*Financials as of FY23, Yields are As of 14-5-2024, N/A= Not Available or Negative)

Factors to Check Before Investing in the Best FMCG Penny Stocks in India

● Company Fundamentals: Conduct a thorough study of the company's financials, management team, competitive situation, and growth possibilities. Evaluate sales growth, profits, debt amounts, and cash flow creation.
● Name Strength and Market Position: Name recognition and market share are essential in the FMCG business. Assess the strength of the company's products and its ability to fight effectively in the marketplace.
● Product Innovation: The FMCG sector is highly competitive, and businesses must continually innovate to stay ahead of the curve. Evaluate the company's track record of launching new goods and its ability to change customer tastes.
● Distribution Network: A strong distribution network is essential for FMCG businesses to reach clients across different areas. Assess the company's marketing skills and its ability to increase its reach.
● Regulatory Environment: The FMCG industry is exposed to various laws, including labeling rules, food safety standards, and environmental regulations. Evaluate the company's compliance with these laws and ability to handle any possible regulatory changes.
● Valuation: While penny stocks are usually cheap, it's essential to assess whether the company is genuinely affordable or if the low price is supported by its assets. Analyze the company's value measures, such as price-to-earnings (P/E) and price-to-book (P/B) ratios, and compare them with industry peers.
● Liquidity and Trading Volume: Penny stocks tend to have lower trading volumes, leading to higher instability and more significant bid-ask gaps. Consider the stock's liquidity and trading volume to ensure you can enter and leave trades without substantial slippage.

Benefits of Investing in the Best FMCG Penny Stocks

● High Growth Potential: Penny stocks often represent companies in their early stages of growth, giving the chance for substantial profits if they achieve significant success.
● Diversification: Adding the best FMCG penny stocks to your portfolio can help spread your investments across different industries and market capitalizations, possibly lowering total portfolio risk.
● Low Entry Point: Penny stocks, by definition, trade at relatively low prices, allowing buyers to gain exposure to potential companies with a smaller original investment.
● Defensive Nature: The FMCG sector is usually considered defensive, as the demand for necessary consumer goods tends to be less affected by economic cycles, offering a possible hedge against market instability.
● Dividend Income: Some FMCG penny stocks may offer dividend income, giving buyers an extra source of gain.

How to Invest in the Best FMCG Penny Stocks 2024

● Open a Demat and Trading Account: To buy the best FMCG penny stocks, you need to open a Demat (dematerialized) account and a trading account with a reputable dealer.
●  Conduct Thorough Research: Carefully study and examine the FMCG penny stocks you are interested in, considering financials, management, growth possibilities, and competitive environment.
● Develop an Investment Strategy: Define your financial goals, risk tolerance, and investment timeline. Decide how much you want to give to FMCG penny stocks and how you will handle your inventory.
● Monitor and Manage Your Investments: Keep a close eye on your finances and the general market situations. Be prepared to change your investments as needed, taking profits or cutting losses when appropriate.
● Consider Seeking Professional Advice: If you are new to investing or unsure about your investment decisions, consider seeking advice from a qualified financial advisor who can provide personalized recommendations based on your unique circumstances.

Conclusion

Investing in the best FMCG penny stocks in India for 2024 can be a high-risk, high-reward chance for buyers wanting the potential for substantial gains. However, it is crucial to conduct complete research, understand the risks involved, and carefully evaluate the company's assets, growth possibilities, and competitive situation before making any financial choices. By following a strict investment strategy and handling your portfolio effectively, you can capitalize on these companies' growth potential while reducing risks.