FMCG stocks are a good option in a volatile market, when your priority is safety rather than higher returns. GlaxoSmithKline Consumer Healthcare (GSKCH), powered by the Horlicks brand, is a strong stock in this space. GSKCH has taken over the consumer and over-the-counter (OTC) businesses of two very long-standing MNCs in the country.

Brands. After its recent corporate mergers and brand buyouts, GSKCH now has a virtual monopoly over the nutritional drinks market. Its line-up is led by Horlicks, which commands over 50 per cent of the health beverage market in India.

Boost, with 13 per cent of the national market, is the leader among the 'brown' health drinks. With ongoing investments in the vending business, the company is extending the reach of this product category beyond households.

The company's pharma business comprises OTC products. Here, too, the company owns dominant brands such as the paracetamol-based painkiller Crocin, antacid Eno, and the pain balm, Iodex.

Financials. Operating and net profits in the quarter ended December 2008 have gone up by 19.82 per cent and 9.13 per cent to Rs 53.20 crore and Rs 27.50 crore, respectively, from the last year's figures.

The current year's yield stands at around 2 per cent. We view GSKCH as a continuous dividend-paying stock with steady price appreciation in the long run.

Image: GSKCH, powered by the Horlicks brand, is a strong stock in the FMCG space.

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