Best Personal Care Stocks in India 2023
The personal care industry encompasses a wide array of products and services dedicated to individuals' hygiene, grooming, and overall appearance. The sector includes cosmetics, skin care, hair care, oral care, perfumes and colognes, personal hygiene items such as soaps, body washes, deodorants, and other products used for personal cleanliness, and grooming products including razors, shaving creams and trimmers etc.
In India, multinational corporations, or MNCs, dominate personal care market with homegrown companies having carved niche markets. Many of the Indian units of these MNCs and domestics companies are listed on Indian exchanges giving investors a chance to be part of their growth story.
The sales of personal care products have risen steadily in India with a rise in disposable income and purchasing power of the people. This has also lifted valuation of personal care stocks in India, with some of them trading at a PE ratio of more than 50.
List of Top 10 Best Personal Care Stocks
Overview of Best Personal Care Stocks
Hindustan Unilever: India’s biggest personal care and fast-moving consumer goods company, HUL, has a low debt and zero promoter pledge, but comes at an expensive valuation and is also getting tough competition from new age and ayurvedic entrants in the sector. On the positive side return on equity has been improving in the last two years and importantly, FIIs and FPIs have been increasing their holding in the company.
Godrej Consumer Products: A low-debt company, Godrej Consumer Products has seen an increase in FII and FPI shareholding in the recent past and book value per share has also been improving for the last two years. Some brokers have also upgraded the target price on the stock in the recent past. However, subdued net profit and profit margin can be seen as negatives.
Dabur India: The company has maintained a healthy dividend payout, especially compared with peers, and has seen decent interest from FIIs and FPIs. The company has managed a decent growth in net profit and margins with book value per share rising for the last two years. However, the stock is trading at nearly 11 times its book value and its average sales growth in last three years has not managed to touch double digits.
Marico: The company presents one of best opportunities in the personal care stocks and is trading at near 52-week high. Marico is a low debt company that has managed decent growth in net profit and margins. FIIs and FPIs have also been raising their stake in the company leading to upgrade in target price by brokers.
Colgate Palmolive (India): The stock is trading at a near 52-week high, leading to chances of a breakout. Colgate Palmolive (India) has no debt and zero promoter pledge with rising stake from FPIs and FIIs. However, muted net profit growth and margin pose a threat as does declining net cash flow.
Procter and Gamble Hygiene and Health Care: A good bet in the personal care segment, Procter and Gamble Hygiene and Health Care has hit a new 52-week high and price above short, medium and long-term moving averages. The company has reduced debt and has three-year return on equity of 76.2% with a healthy dividend payout.
Emami: Another good opportunity in the personal care space, Emami’s current PE ratio is less than 3 Year, 5 Year and 10 Year average, while it has got price upgrades from brokers. The stock price is also above short-, medium- and long-term moving averages with increasing interest from foreign investors. The company nearly debt free, but has slightly high promoter pledge.
Jyothy Lab: With stock prices are near a 52-week high, Jyothy Lab presents a good opportunity in the personal care space. The company has managed decent growth in quarterly net profit and margins have also expanded. It has no debt and zero promoter pledge.
Bajaj Consumer Care: Trading at near 52-week high, Bajaj Consumer Care has no debt and zero promoter pledge. The profits have been increasing for the past three quarters and revenues too have been on the upswing. The stock price is also above short-, medium- and long-term moving averages with increasing interest from foreign investors. However, MFs have lowered their exposure to the stock in the last quarter.
Kaya: One of the recent entrants in the personal care space, Kaya has seen its margin expanding and foreign investors pouring decent money. It has also seen positive growth in sales and profit with strong price momentum, while its PE ratio is low.
Things to Consider Before Investing in Best Personal Care Stocks
Any investment should be done only after a thorough research of the sector. This holds true also for the personal care stocks. Here are some of the factors to keep in mind before investing in personal care stocks:
Brands: Personal care space has a strong value for brands. Companies having brands with a strong reputation and recognition often enjoy customer loyalty and the ability to command premium pricing.
Financials: Thoroughly analyze the financial performance of the companies on your radar. Scrutinize metrics like revenue growth, profitability, and debt levels.
Market Dynamics: Take a close look at prevailing trends within the personal care industry. Identify products or categories experiencing increased demand. Stay attuned to shifting consumer preferences, evolving beauty standards, and emerging market prospects.
Competitive Landscape: India is seeing growth of many Ayurvedic companies and online sellers which are giving tough competition to big brands. Gain insights into the competitive landscape before investing.
Distribution Network: Personal care products need strong distribution network to reach customers, especially in towns and rural areas. Always evaluate the company's distribution channels.
As India’s growth story continues, so does disposable income of the citizens, leading to a spurt in sales of personal care products in the country. This augurs well for personal care companies and their stocks, providing investors an opportunity to latch onto the growth wagon.
Frequently Asked Questions
Is it safe to invest in best personal care stocks?
No stock is hundred percent safe to invest in. Personal care heavyweights, however, see less volatility than many other sectors.
Is it worth investing in best personal care stocks in 2023?
Yes, some of these stocks are priced attractively. Having said that, investors do their due diligence before investing.
How much should I invest in best personal care stocks?
All portfolios should have diverse stocks to hedge risks. Most personal care stocks are low beta, offering stability but not very high return.
Who is the market leader in personal care sector?
Hindustan Unilever, Godrej, Dabur, and Marico are among the top personal care companies.
Gold prices are facing sustained pressure despite a backdrop of dollar weakness, a rare occurrence that coincides with a decline in yields on US Treasuries. Typically, the strength of the dollar and higher yields have been key components of the Federal Reserve's hawkish monetary policy.
- Sep 29, 2023
The last week of September turned out to be volatile as the markets corrected during the monthly expiry to test the 19500 mark. We witnessed a strong recovery in Friday’s session, and the index finally ended the week above 19600, with marginally weekly loss.
- Sep 29, 2023