Inflation in India is heating up, with wholesale prices at 9.68% in May and higher crude oil costs feeding through to food, transport, and everyday essentials. For investors, that combination can squeeze many businesses, while others may prove more resilient as households continue to prioritise staples. This article looks at how those pressures and potential policy moves from the RBI or government might affect a group of large and mid-cap consumer staples stocks listed in the US, Canada, the UK, and Australia. It will spotlight three stocks from this screener that appear relatively better placed in the current backdrop.

Coty (COTY)

Overview: Coty is a global beauty company that sells prestige and mass market fragrances, cosmetics, and skin and body care products, spanning well known luxury labels like Gucci, Burberry, and Calvin Klein as well as everyday brands such as CoverGirl, Rimmel, and Sally Hansen across retail stores, pharmacies, and online channels.

Operations: Coty generates about US$3.8b from its Prestige segment and US$2.0b from Consumer Beauty products, making higher end fragrances and cosmetics its largest revenue contributor.

Market Cap: US$1.7b

Coty sits at an interesting crossroads for investors watching how inflation and higher oil prices affect consumer staples. As a supplier of everyday beauty and personal care products, it has some defensive qualities, while management highlights tools such as premiumisation, mix management, productivity gains, and targeted pricing to handle cost inflation and freight or packaging pressures. At the same time, the company is working through weak recent share price performance, widening losses, governance questions including a class action lawsuit, and higher leverage, even as it pursues growth opportunities like the Marc Jacobs Beauty relaunch. Understanding how these moving parts fit together can help you judge whether Coty’s low valuation and potential margin improvement fairly compensate for the execution and balance sheet risks.

Coty’s weak share price and leverage may be masking a more interesting story around potential margin repair and brand strength. Get the full picture in the DCF valuation analysis for Coty, including what the market might be missing.

Mission Produce (AVO)

Overview: Mission Produce is a California based produce company that sources, farms, ripens, packs, and distributes avocados, mangoes, and blueberries for grocery retailers, wholesalers, and foodservice customers in the US and abroad, while also supporting them with merchandising advice, promotional campaigns, and training.

Operations: Mission Produce generates most of its revenue from Marketing & Distribution at about US$1.1b, with International Farming contributing roughly US$126.9m and Blueberries US$92.8m, partly offset by intercompany eliminations of US$101.5m.

Market Cap: US$1.0b

Mission Produce provides exposure to everyday food staples at a time when higher inflation and energy costs are front of mind for households and policymakers. The stock is reported to be trading below one estimate of fair value, and the board has supported that view with meaningful insider buying and a US$100m buyback plan. On the other hand, profitability is thin, with a 1.8% net margin and recent losses influenced by one off items and acquisition related costs. For investors who think consolidation in avocados and related categories can be attractive despite higher borrowing and margin pressure, Mission Produce may warrant closer consideration.

Mission Produce’s thin margins, insider buying, and US$100m buyback plan suggest that the headline story may not match the underlying business. Get the full context in the analysis report for Mission Produce

Utz Brands (UTZ)

Overview: Utz Brands is a long established US snack company that manufactures and markets a wide range of salty snacks, from potato and tortilla chips to pretzels, cheese snacks, pork skins, popcorn, salsa, dips, and partner or private label products, sold under brands such as Utz, On The Border, Zapp’s, Boulder Canyon, and others across retail and direct to consumer channels.

Operations: Utz Brands generates about US$1.4b from the manufacturing, distribution, marketing, and sale of snack food products, all from customers in the United States.

Market Cap: US$1.0b

Utz Brands gives you exposure to everyday snacking that tends to stay in household baskets even as inflation and higher transport costs pressure budgets. Management is focusing on premium products like Boulder Canyon, productivity gains, and wider US distribution to improve margins over time. At the same time, Utz is still loss making, carries higher risk external borrowing, and has a relatively new leadership team. Recent results show a shift from a US$7.5m profit to a US$1.7m loss and a six month share price decline of about 32%. The key question is whether the reported value gap, earnings growth expectations, and 3.65% dividend are enough to compensate you for execution and profitability risks in a competitive snack market.

Utz Brands’ sharp share price fall, reported value gap, and 3.65% dividend suggest that the market may be missing something about this snack business, the full narrative for Utz Brands

The stocks covered here are just a starting point, since the full Indian consumer staples idea on Simply Wall St highlights 25 more companies with equally compelling narratives across food, beverages, and household essentials in the Indian Consumer Staples Stocks screener. Use the Simply Wall St platform to identify and analyze the specific catalysts, quality factors, and business stories that match your own highest conviction ideas within this group.

Take Control of Your Investment Journey

If Mission Produce or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.