JM Financial picks Britannia, Marico, Dabur, Honasa, Bikaji as top FMCG bets; here’s why
JM Financial said the staples coverage universe (excluding ITC and VBL) posted a 7 per cent year-on-year rise in sales, broadly in line with expectations.
- Nov 19, 2025,
- Updated Nov 19, 2025 11:25 AM IST
Brokerage firm JM Financial has named Britannia Industries, Marico, Dabur India, Honasa Consumer, and Bikaji Foods as its preferred picks within the Fast-Moving Consumer Goods (FMCG) space. In its latest post–Q2 FY26 sector update, the brokerage noted that while the operating backdrop remains a mixed bag, the outlook for the second half of the fiscal year looks encouraging, supported by festive consumption and improving trade dynamics.
JM Financial said the staples coverage universe (excluding ITC and VBL) posted a 7 per cent year-on-year rise in sales, broadly in line with expectations. EBITDA growth came in at 2.5 per cent, slightly better than estimated, despite GST transition-led operational challenges that the brokerage believes shaved off around 2–4 per cent from sales growth. This impact is transient in nature and likely to normalize from the third quarter, the report added.
The brokerage pointed to a notable divergence in category performance, observing that F&B players surprised positively and outperformed HPC players. Food and beverage companies such as Nestle, Tata Consumer Products (TCPL), and Britannia recorded stronger volume growth than their home and personal care counterparts. Management commentaries also indicate an uptick in volume growth across companies, helped by the festive season and a likely intense winter, which is expected to benefit brands like Dabur and HUL.
Looking ahead, JM Financial remains constructive on the sector. It said companies including Britannia, Bikaji, Honasa, and Marico are quite upbeat about the 2H outlook on both sales and EBITDA margin. Margin recovery is expected to be supported by easing/stable RM prices and scale leverage. The brokerage also expects Marico to maintain its “c.20 per cent+ growth trajectory,” while key F&B players are projected to deliver sales growth of 9–14 per cent.
At the same time, JM Financial urged investors to be mindful of valuations. With FMCG stocks trading at about 55x NTM PE—above the 10-year average—the brokerage cautioned that the headroom for error is limited. It emphasised that the pace of acceleration in volume growth will be a key monitorable for any further rerating.
Based on its Q2 FY26 analysis, JM Financial’s target prices and recommendations for its top picks are as follows:
Britannia Industries: Buy, target price Rs 6,995Marico: Buy, target price Rs 850Honasa Consumer: Buy, target price Rs 330Bikaji Foods: Buy, target price Rs 830Dabur India: Add, target price Rs 535
Brokerage firm JM Financial has named Britannia Industries, Marico, Dabur India, Honasa Consumer, and Bikaji Foods as its preferred picks within the Fast-Moving Consumer Goods (FMCG) space. In its latest post–Q2 FY26 sector update, the brokerage noted that while the operating backdrop remains a mixed bag, the outlook for the second half of the fiscal year looks encouraging, supported by festive consumption and improving trade dynamics.
JM Financial said the staples coverage universe (excluding ITC and VBL) posted a 7 per cent year-on-year rise in sales, broadly in line with expectations. EBITDA growth came in at 2.5 per cent, slightly better than estimated, despite GST transition-led operational challenges that the brokerage believes shaved off around 2–4 per cent from sales growth. This impact is transient in nature and likely to normalize from the third quarter, the report added.
The brokerage pointed to a notable divergence in category performance, observing that F&B players surprised positively and outperformed HPC players. Food and beverage companies such as Nestle, Tata Consumer Products (TCPL), and Britannia recorded stronger volume growth than their home and personal care counterparts. Management commentaries also indicate an uptick in volume growth across companies, helped by the festive season and a likely intense winter, which is expected to benefit brands like Dabur and HUL.
Looking ahead, JM Financial remains constructive on the sector. It said companies including Britannia, Bikaji, Honasa, and Marico are quite upbeat about the 2H outlook on both sales and EBITDA margin. Margin recovery is expected to be supported by easing/stable RM prices and scale leverage. The brokerage also expects Marico to maintain its “c.20 per cent+ growth trajectory,” while key F&B players are projected to deliver sales growth of 9–14 per cent.
At the same time, JM Financial urged investors to be mindful of valuations. With FMCG stocks trading at about 55x NTM PE—above the 10-year average—the brokerage cautioned that the headroom for error is limited. It emphasised that the pace of acceleration in volume growth will be a key monitorable for any further rerating.
Based on its Q2 FY26 analysis, JM Financial’s target prices and recommendations for its top picks are as follows:
Britannia Industries: Buy, target price Rs 6,995Marico: Buy, target price Rs 850Honasa Consumer: Buy, target price Rs 330Bikaji Foods: Buy, target price Rs 830Dabur India: Add, target price Rs 535