Stress concentration is an interesting and essential field of study, as it is the prime cause of failure of structural parts under static load. In the current paper, stress and strain concentration factors in unidirectional functionally graded (UDFGM) plate with central circular cutout are predicted by carrying out a finite element study on ANSYS APDL platform. The present study aims to bridge the lacuna in the understandings of stress analysis in perforated functionally graded plates. It is found that the material variation parameter is an important criterion while designing a perforated UDFGM plate. By selecting a proper material variation parameter and direction of material gradation, the stress and strain concentrations can be significantly reduced.