October 1, 2025
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Antique Stock Broking has carried out a comprehensive research of all the top FMCG & Auto stocks and identified their respective strength and weakness. Based on this research, Antique has identified the best FMCG & Auto stocks that you should invest in
Antique Stock Broking has carried out a comprehensive research of all the top FMCG & Auto stocks and identified their respective strength and weakness. Based on this research, Antique has identified the best FMCG & Auto stocks that are investment worthy at the present time

FMCG Stocks Valuation and Recommendation

We remain positive on the overall Indian FMCG space in the longer term due to the rising awareness for branded products. However in the short term, the space provides limited scope upside potential. We therefore have neutral rating on the sector.

Our top pick in the sector is ITC which provides a scope for re-rating from the current levels, in view of its dominance and resilience in the cigarettes division. We believe that the company is well placed to grow its cigarette EBIT by 21% during the next two years. We therefore recommend a BUY on the stock at the current levels.

We remain positive on Nestle in the medium to long term due its strong presence in low penetration categories like nutrition, instant foods and chocolates and confectionaries. However in the short term, the stock lacks triggers as the recovery in its business would be gradually spread over 12 month period. We therefore maintain our HOLD rating on the stock at the current levels.

In the liquor space, we believe that Radico Khaitan is a strong re-rating candidate with price hikes being implemented across states and the premiumisation initiative of the company. The company also witnessed an improvement in its cash flows during FY12. We recommend a BUY on the stock with a target price of INR158

FMCG Stocks: Summary of Recommendations

Company

Mcap

Reco

CMP

Target

Return (%)

 

FY14e

 

(INRbn)

 

 

 

 

EPS (INR)

P/E (x)

ROCE (%)

ITC

2,337

BUY

297

322

9

11.8

25.2

49.9

HUL

1,241

HOLD

574

524

(9)

17.5

32.9

65.5

Nestle

458

HOLD

4,766

4,495

(6)

149.8

31.8

39.1

Colgate

168

HOLD

1,236

1,213

(2)

48.5

25.5

125.9

Godrej

230

HOLD

674

625

(7)

28.4

23.7

25.6

Dabur

235

HOLD

135

129

(4)

5.4

25.2

29.8

Marico

131

HOLD

203

198

(2)

8.6

23.5

20.5

Asian Paints

373

HOLD

3,885

3,799

(2)

152.0

25.6

50.0

Radico

16

BUY

117

158

35

10.7

10.9

34.0

Auto Stocks Valuation and Recommendation

While current volumes/margins might not provide too much to cheer about, we believe that we are nearing the fag-end of the pain. Going into an easing rate cycle, we expect the auto companies with a higher sensitivity to an improving macro (cars/CVs) to witness a gradual uptick in volumes and consequently margins. This makes them strong re-rating candidates as well. Analysing the past few cycles, we can infer that even an indication of rates easing-off, re-rates multiples for the rate-sensitives, much before an actual uptick in volumes (which could be even 2-3 quarters away). This also makes us believe that directionally, defensives (2Ws) would underperform from here on.

Among the large caps, our pecking order remains Maruti Suzuki (multiple cycles turning its favour), Tata Motors (JLR’s product cycle in a sweet spot) and M&M (impeccable auto business; tractor downgrades behind us). Outside the front-liners, we like Eicher Motors, as we foresee a positive delta in volumes & margins for the cash cow, i.e. Royal Enfield. Furthermore, while playing a cyclical uptick in CVs, we prefer Eicher (VECV) to Ashok Leyland, given the cleaner business structure and superior return ratios.

For two-wheelers, while we maintain our positive bias for the superior business model (which is a boon in any environment), we believe that good businesses seem to get their due credit only in tough times. Between the two-wheeler biggies, while we prefer Bajaj Auto to Hero, staying true to our underlying theme, we would avoid the 2W pack for now. We downgrade Bajaj Auto to HOLD post the recent run-up in the stock and maintain our HOLD recommendation on Hero.

Among the ancillaries, we like Bosch as a structural play, but foresee a better entry point in the near-term. For Exide, while operating metrics are finally improving, our bull-case target price provides less upside. With risk-reward unfavourable at this level, we recommend a HOLD.

Auto Stocks: Summary of Recommendations

Company

Mcap

Reco

CMP

Target

Return (%)

 

FY14e

 

(INRbn)

 

 

 

 

EPS (INR)

P/E (x)

ROCE (%)

Maruti Suzuki

394

BUY

1,365

1,712

25

99.1

13.8

22.0

Tata Motors

835

BUY

262

324

24

47.0

5.6

31.3

Mahindra & Mahindra

540

BUY

825

925

12

63.2

10.3*

30.1

Bajaj Auto

507

HOLD

1,752

1,856

6

133.6

13.1

60.5

Hero MotoCorp

359

HOLD

1,800

1,935

7

115.3

15.6

47.9

Eicher Motors

60

BUY

2,220

2,575

16

190.4

11.7

37.6

Bosch

276

HOLD

8,790

9,502

8

475.1

18.5

30.3

Ashok Leyland

64

HOLD

24

26

7

2.3

10.3

13.4

Exide Industries

126

HOLD

148

146

(1)

9.1

15.2*

26.8

Escorts

7

HOLD

68

66

(3)

13.2

5.1

6.8

Best FMCG & Auto Stocks To Buy

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