What are Small-cap FMCG stocks?
A small-cap FMCG stock is a share from any company listed on the stock market that deals in fast-moving consumer goods with a market capitalization of under ₹5000 crores. FMCG or ‘Fast-Moving Consumer Goods’ are non-durable goods sold quickly at a relatively low price. They not only have a low shelf life but also a high turnover rate in stores due to extraordinary demand and being perishable in nature. FMCGs include cosmetic products, perishable food items like fruits and vegetables, over the counter medication, cleaning products, baked goods, toiletries, and office supplies, among other non-durables.
Market Representation for Small-Cap FMCG Stocks
NIFTY Smallcap 250 is a list representing the remaining 250 small-cap companies that are ranked 251–500 from NIFTY 500. In Mar 2019, this smallcap index represented 6.4% of the free-floating market capitalization of all the stocks listed on NSE. The total traded value of all stocks on this index for 6 months prior to March 2019 was roughly 11% of the overall traded value of all stocks on NSE.
Benefits of Investing in Small-Cap FMCG Stocks
- Growth Potential:Small-cap shares are among the top return-yielding investment options. They have the potential to emerge as ‘multi-baggers’ by generating returns over 100%.
- Fair Prices:Owing to the limitations placed on major financial institutions, they cannot push the price of small-cap stocks upwards. These stocks are fairly priced.
- Under-recognized:Small-cap companies may often be underrated or not recognized. Due to these probable market inefficiencies, their stocks may be under-priced.
Small-Cap FMCG Stocks in India
Similar to Nifty Smallcap 250, BSE SME lists the small and medium cap enterprises on the Bombay Stock Exchange. Based on BSE’s Smallcap Index for 2020, here is a list* of well-performing small-cap FMCG stocks in India.
*Note: The stocks are listed from the highest share price to the lowest share price.
- Tasty Bite Eatables Ltd.
Tasty Bite Eatables Ltd is a company based out of India that manufactures and sells prepared foods. Under the brand name Tasty Bite, Tasty Bite Eatables offers a host of ready-to-serve (RTS) Indian food and Frozen Formed Products (FFP). Their products include frozen meals, gravies, patties, sauces, and appetizers, among other offerings. Tasty Bite Eatables has grown from ₹1,600 in Jan of 2016 to ₹11,500 today.
- Industry: Manufacturing frozen ethnic food
- Market Cap: ₹2953.5 crores
- Share Price: ₹11,485.85
- 52 Week High: ₹12,507
- 52 Week Low: ₹7489
- P/E Ratio: 73.18
- Venky’s (India) Ltd
Venky’s is known for offering pathogen-free eggs. It has expanded into manufacturing nutritional health products, conducting genetic research and broiler breeding, production vaccines, producing biosecurity goods, manufacturing poultry feed & pieces of equipment. Across five years, Venky’s has seen volatile growth from ₹330 in 2016 to ₹1450 in 2020.
- Industry: Nutrition and Healthcare Supplements
- Market Cap: ₹2045.41 crores
- Share Price: ₹1453.4
- 52 Week High: ₹2410
- 52 Week Low: ₹1135.25
- P/E Ratio: 20.53
- Vadilal Industries Ltd.
Vadilal is famous for its ice creams and flavored milk in India but is also globally recognized as a frozen dessert manufacturer and seller. It has been awarded “India’s Most Trusted Brand” for the ice cream category. Its valuations have been in the green for 5 years, and its share prices have doubled since then from ₹432 in Fe of 2016 to ₹835 today.
- Industry: Dairy Products
- Market Cap: ₹599.21 crores
- Share Price: ₹833.55
- 52 Week High: ₹898.95
- 52 Week Low: ₹ 467.8
- P/E Ratio: 11.65
- Relaxo Footwear Ltd.
With the goal of eliminating discomfort from footwear, Relaxo Footwear Ltd manufactures and sells durable, affordable and comfortable casual footwear, sandals, and sneakers. It has production facilities across North India and produces over 6 lakh pieces of footwear each day that requires quality workmanship. Relaxo has steadily grown over a 5 year period making it one of the best performing small-cap FMCG stocks in India. It was valued at ₹240 at the beginning of 2016 and currently stands at ₹795.
- Industry: Footwear
- Market Cap: ₹19719.45 crores
- Share Price: ₹795
- 52 Week High: ₹813
- 52 Week Low: ₹357
- P/E Ratio: 86.34
- Avanti Feeds Ltd
Founded in 1993, Avanti Feeds Limited manufacturers fish and feeds while also processing and exporting shrimp. Hence, its feed and export cater to Indian fish and prawn farmers. The Company’s major products are its shrimp feed and processed shrimp. In one year, Avanti Feed’s share price doubled. It was valued at ₹319 in Feb of 2019 and has grown to ₹660 in Feb of 2020.
- Industry: Feed, Processing, and Export of Marine Animals
- Market Cap: ₹8295.3 crores
- Share Price: ₹609.1
- 52 Week High: ₹770
- 52 Week Low: ₹270
- P/E Ratio: 25.35