Godrej Consumer Vs Tata Consumer – Financials, Comparison And More

The Fast Moving Consumer Goods (FMCG) sector is renowned for being one of the most defensive sectors in the Indian economy. Irrespective of the state of the economy, FMCG always tends to enjoy high demand for its products. Additionally, the sector and the companies therein are also comparatively less volatile, making them good investment options for both short-term and long-term investors.

The FMCG sector in India has several major players. Among them are two corporate giants - Godrej Consumer Products Limited and Tata Consumer Products Limited. Both of these companies boast rich histories, diverse product portfolios and a sizable market presence. 

In this article, we are going to get to know more about these companies and compare them both based on some key fundamental metrics. But before we do that, let us first get a short overview of the Indian FMCG sector.         

FMCG Sector of India: An Overview 

FMCG is the fourth-largest sector of the Indian economy and contributes a significant portion to the national Gross Domestic Product (GDP). The sector includes several sub-segments, ranging from personal care and food and beverages to pharmaceuticals and consumer electronics.   

FMCG in India is a dynamic and rapidly evolving domain characterised by intense competition and ever-changing consumer preferences. Thanks to a burgeoning population and increasing disposable income, India’s FMCG market offers several opportunities for growth and innovation. 

The food processing market in India alone has reached $307.2 billion as of 2022 and is projected to grow at a staggering rate of 9.5% CAGR between 2023 and 2028. The FMCG sector also contributes to the growth of other industries, especially media and digital advertising. In fact, the total digital advertising spend by FMCG touched approximately $9.92 billion as of 2023. 

Godrej Consumer Products Limited: An Overview 

A part of Godrej Group of Companies, Godrej Consumer Products Limited, was incorporated in 2000. As a leading player in the Indian FMCG sector, the company offers a diverse range of products across different segments, including personal care, home care and hair care solutions. 

In addition to having a strong presence within India, Godrej consumer goods are also present in many parts of Africa and other countries like Indonesia, Chile and Argentina, among others.  

The company is also at the forefront of innovation, with a state-of-the-art global research and development centre in Mumbai. Some of the key brands in Godrej Consumer Products Limited’s portfolio include Good Knight, Godrej Expert, HIT, Cinthol, Godrej Professional, Villeneuve, African Pride, Stella, Genteel, Park Avenue and KamaSutra.

Tata Consumer Products Limited: An Overview 

A part of the Tata Group of Companies, Tata Consumer Products Limited was incorporated in  1962. The company boasts a strong portfolio of products, comprising beverages, foods and snacks. Thanks to its extensive distribution network and strategic acquisitions, Tata Consumer Products Limited has managed to fortify its position as a key player in the Indian FMCG sector. 

Apart from offering Tata Consumer Products in India, the company also exports them to other countries such as Australia, Canada, Kenya, Malawi, Poland, the U.K. and the U.S. The company has also entered into a joint venture agreement with Starbucks Coffee. Currently, there are more than 200 Starbucks stores across 15 cities in India, and that number is growing faster than ever. 

A few of the products in Tata Consumer Products Limited’s portfolio include Tetley, Good Earth, Tata Coffee, Tata Gluco+, Tata Salt, Tata Sampann, Ching’s Secret and Smith & Jones, among others.

Detailed Comparison of Tata Consumer Products Vs. Godrej Consumer Products 

Now that you are aware of these two FMCG giants, let us compare them across different key fundamental metrics to understand how they stack up against each other.  

1. Financials 

In this section, we will be comparing some of the most commonly used financial metrics, such as revenue, net profit and net profit margins, to get an idea of how both companies have performed financially. Check out the table below for more information on the financials across three years: 2021-2022, 2022-2023 and 2023-2024.   

(Rs. in crores)  

2. Returns 

Comparing the return metrics of Tata Consumer Products and Godrej Consumer Products can give you insights into how much of a return these two companies have managed to generate for investors. Additionally, it can also give you an idea of how efficient they are at using their capital and assets to generate revenue. 

3. Leverage 

Leverage metrics help assess the degree to which a company uses debt to finance its operations and investments. By comparing these ratios of Godrej Consumer Products and Tata Consumer Products, we can get valuable insights into their capital structure, risk profile and financial health. 

4. Valuation 

Valuation ratios are metrics you can use to evaluate the attractiveness of an investment opportunity. These metrics usually compare a company's market value to its financial performance and fundamentals. Comparing the valuation ratios of Godrej Consumer Products Limited and Tata Consumer Products Limited can help you assess whether the companies are undervalued, overvalued or fairly priced. 

Conclusion

Godrej Consumer Products Limited and Tata Consumer Products Limited represent a major part of the Indian FMCG sector. Both companies have impressive track records with strong financial performance year-over-year. As the FMCG landscape in the country continues to evolve, the companies are seemingly well-poised to navigate the various challenges and leverage the growth opportunities.

You can use the Research 360 platform of Motilal Oswal to assist you in making comparisons of companies across all sectors. This platform will aid you in getting in-depth fundamental and technical insights into the companies, along with the latest news and announcements related to them. Additionally, you can also find research reports on them compiled by experienced research analysts at Motilal Oswal. So, head on over to the Research 360 platform today and sign up for free to enjoy all of these features and more.