FMCG Stocks Plummet: 5 Companies Down 20-35% From Highs
Overview
India's FMCG sector shows recovery signs with favourable macros and demand growth. However, five key stocks—Jyothy Labs, Tasty Bite Eatables, AWL Agri Business, ITC, and Varun Beverages—have seen significant drops of 20-35% from their 52-week highs, presenting potential opportunities amidst rising costs and regulatory shifts.
FMCG Sector Recovers as Key Stocks Face Pressure
India's fast-moving consumer goods (FMCG) sector is signalling a rebound, bolstered by moderating inflation and a resurgence in rural demand. Projections anticipate high single-digit volume growth for 2026, with long-term compound annual growth rates (CAGRs) potentially reaching double digits through 2030. Rising disposable incomes are fueling demand across staples and discretionary goods. Despite this positive outlook, several prominent FMCG stocks have experienced substantial declines from their 52-week peaks.
Jyothy Labs: Navigating Cost Pressures
Jyothy Labs, a specialist in household and personal care products, has seen its shares fall 35% from its 52-week high of ₹422.6. The current market price stands near ₹276.9. Financials for Q2 FY26 revealed nearly flat revenues (₹7,361 million vs. ₹7,338 million YoY) and a net profit dip to ₹878 million from ₹1,050 million YoY. Gross profit margins contracted to 16.1% from 18.9%, attributed to rising input costs. Management cited adjustments to the new GST structure affecting the distribution network, leading to subdued general trade performance, though modern trade and e-commerce showed double-digit gains. The company maintains a strong cash balance of ₹8,010 million and zero debt, aiming for profitable organic growth and product innovation.
Tasty Bite Eatables: Export Slowdown Impacts Results
Tasty Bite Eatables, known for ready-to-eat Indian and pan-Asian foods, is down 34% from its 52-week high of ₹11,888, trading around ₹7,808.35. Q2 FY26 revenues dropped to ₹1,329 million from ₹1,567 million YoY, with net profits falling to ₹36 million from ₹101 million YoY. While its export-led consumer business remained stable, with strong affiliate market growth, the Preferred Brands International segment faced a temporary slowdown due to U.S. macroeconomic challenges. The food service segment, however, continued its growth trajectory, recording a healthy 16% increase in H1 FY26. The company has also ventured into B2C digital business with a launch on Amazon.
AWL Agri Business: Post-Adani Exit Adjustment
AWL Agri Business, formerly Adani Wilmar, has dropped 30% from its 52-week high of ₹329.75, with shares trading near ₹229.2. This decline followed reports of Adani Group's complete exit. Q2 FY26 revenues rose to ₹176,046 million from ₹144,499 million YoY, but net profit declined to ₹2,276 million from ₹2,819 million YoY. Volume growth was in the low single digits, driven by edible oils and food & FMCG, though offset by declines in industry essentials. Festive demand was subdued due to lean inventory levels, but the Food & FMCG business is seeing recovery, particularly in rice and HORECA-catered wheat flour. The company plans to focus on expansion and acquisitions.
ITC: Excise Duty Hike Casts a Shadow
Diversified conglomerate ITC, a significant player in the FMCG space, has seen its stock fall 28% from its 52-week high of ₹471.3, trading around ₹341.3. A sharp drop occurred in early January 2026 following a government excise duty hike on cigarettes, effective February 1, 2026. This duty increase, imposed in addition to the 40% GST, is expected to impact cigarette volumes and margins negatively. Despite the headwind, Q2 FY26 consolidated net profit rose to ₹51,202 million from ₹49,750 million YoY on revenues of ₹212,559 million. The stock offers a dividend yield of 4.2%.
Varun Beverages: Profit Growth Amidst Flat Revenue
Varun Beverages, a major PepsiCo franchisee, is down 20% from its 52-week high of ₹635.2, trading at ₹509.85. For Q3 2025, revenues saw a marginal 1.9% year-on-year increase to ₹48,966.5 million. However, net profits surged 18.5% to ₹7,451.9 million, driven by lower finance costs and higher other income. The company is expanding its international presence with a new subsidiary in Kenya and plans to test market beer in African territories. A new snacks facility in Morocco is operational, and a Zimbabwe plant is nearing commissioning.
Investor Caution Advised
While the broader FMCG sector shows promise, investors are advised to approach these significantly corrected stocks with caution. Thorough due diligence is crucial to assess potential value opportunities against ongoing challenges such as rising input costs and regulatory changes.
