The PEG ratio, which stands for Price/Earnings-to-Growth, is a metric that helps evaluate whether a stock is undervalued or overvalued by taking into account both the stock’s price-to-earnings (P/E) ratio and its expected earnings growth rate.
The Fast-Moving Consumer Goods (FMCG) companies manufacture and distribute essential consumer products that are sold quickly at relatively low costs. These products include food and beverages, personal care items, cleaning products, and other household goods, which are typically consumed or replaced frequently, making them essential to everyday life.
The FMCG sector, India’s fourth-largest, has been growing at a healthy rate over the years due to rising disposable income, a growing youth population, and increased brand awareness.
Household and personal care products account for 50 percent of FMCG sales in India, making the industry a significant contributor to the country’s GDP.
Here are a few such FMCG stocks with a PEG ratio of less than 1:
Gokul Agro Resources Limited
With a market capitalisation of Rs. 4,357 crores, the stock rose by 1 percent on BSE to reach an intraday high of Rs. 309.55 on Friday.
The company has reported a low PEG (Price/Earnings-to-Growth) ratio of 0.41, indicating that the stock is undervalued. Moreover, the stock has a P/E ratio of 27.1, compared to the industry’s P/E ratio of 43.1.
On a year-on-year basis, the company reported a significant 74 percent increase in revenue from operations, rising from Rs. 2,464 crore in Q1 FY24 to Rs. 4,290 crores in Q1 FY25, while the net profit stood at Rs. 53 crores, increasing from Rs. 24 crore, reflecting a growth of 120.8 percent over the same period.
The stock delivered multibagger returns of around 162.5 percent in one year, as well as nearly 137 percent returns year-to-date.
Gokul Agro Resources Limited is engaged in various aspects of seed processing, solvent extraction, oil refining, Vanaspati ghee, soybean oil, bakery shortening, castor oil, and castor derivatives.
The company is engaged in the production, distribution & export of various edible and non-edible oils & their derivatives & feed meals.
Vadilal Industries Limited
With a market capitalisation of Rs. 3,240.4 crores, the stock rose by nearly 2.4 percent on BSE to reach an intraday high of Rs. 4,615.75 on Friday.
The company has reported a low PEG (Price/Earnings-to-Growth) ratio of 0.59, indicating that the stock is undervalued. Moreover, the stock has a P/E ratio of 20.1, compared to the industry’s P/E ratio of 39.2.
On a year-on-year basis, the company reported a significant 13 percent increase in revenue from operations, rising from Rs. 411 crores in Q1 FY24 to Rs. 464 crores in Q1 FY25, while the net profit stood at Rs. 77 crores, increasing from Rs. 71 crores, reflecting a growth of 8.5 percent over the same period.
The stock delivered positive returns of around 77 percent in one year, as well as nearly 80 percent returns year-to-date.
Vadilal Industries Limited is engaged in the business of manufacturing ice-cream, flavored milk, frozen desserts, processed foods, and other dairy products. It is also engaged in the export of ice-cream, dairy products, processed food products such as frozen fruits, vegetables, pulp, ready-to-eat and ready-to-serve products etc.
Kriti Nutrients Limited
With a market capitalisation of Rs. 700.5 crores, the stock rose by 2 percent on BSE to reach an intraday high of Rs. 141.85 on Friday.
The company has reported a low PEG (Price/Earnings-to-Growth) ratio of 0.68, indicating that the stock is undervalued. Moreover, the stock has a P/E ratio of 14.8, compared to the industry’s P/E ratio of 43.1.
On a year-on-year basis, the company reported a 11.3 percent decrease in revenue from operations, declining from Rs. 212 crores in Q1 FY24 to Rs. 188 crores in Q1 FY25, while the net profit stood at Rs. 14 crores, increasing from Rs. 13 crores, reflecting a marginal growth of 7.7 percent over the same period.
The stock delivered positive returns of around 76.2 percent in one year, as well as nearly 62.5 percent returns year-to-date.
Established in 1995, Kriti Nutrients Limited is engaged in the business of oil refining and the creation of soya-based products, as well as producing value-added protein-based products that service downstream segments such as food, pharmaceutical, dairy and aqua cum poultry industries.
Written by Shivani Singh
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