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FINANCIAL RATIO ANALYSIS of HUL WITH COMPETITOR (DABUR INDIA)
Submitted To: Prof. FMA Khan
Submitted By: Rakesh Balani IILM GSM FT-11-1067
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INTRODUCTION EXECUTIVE SUMMARY HISTORY OF HUL, DABUR. BALANCE SHEET OF HUL BALANCE SHEET OF DABUR RATIO ANALYASIS MEANING OF RATIO ANALYASIS OBJECTIVE OF RATIO ANALYSIS CLASSIFICATION OF RATIO CURRENT RATIO DEBT EQUTY RATIO PRICE EARNING RATIO IMPORTANCE OF RATIO ANALYSIS PURPOSE OF RATIO ANALYSIS INVESTOR PERSPECTIVE OUR RECOMENDATION CONCLUSION
only good product and brand awareness will not be sufficient but proper distribution channel must be present in holistic approach. If we go by statistics. are competing in the market with a view to capture it. To capture such a great opportunity.1 billion. As a result of it we have opted to undergo analyzing the financial statements and on basis of it. roughly around 73% of the Indian population lives in the rural areas. Many giant players.that’s a very large market. we shall do a peer to peer analysis and compare their market position (HUL & DABUR ) in Indian FMCG Company having excellent distribution channel and deep rural reach in India As the major part of the market is yet to be extracted completely.INTRODUCTION To understand the information contained in financial statements with a view to know the strength or weaknesses of the firm and to make forecast about the future prospects of the firm and thereby enabling the financial analyst to take different decisions regarding the operations of the firm. EXECUTIVE SUMMARY: India’s consumer market is riding the crest of the country’s economic boom. one needs to evolve a set of strategies and plans to tap the potential Indian consumer market. India’s fast moving consumer goods (FMCG) sector is the fourth largest sector in the economy of India with a total market size in excess of US$ 13. both foreign as well as domestic. it shows strengths and opportunity that lies in rural Indian markets especially for FMCG products. Thereby sufficing the need to assimilate the objectives of these companies as the objective of financial statements . The growing consumerism in India shows the rapid increase in Indian consumer purchasing power.
toothpastes. Hindustan Unilever Limited (HUL) formerly Hindustan Lever Limited (it was renamedin late June 2007 as HUL) is India's largest Fast Moving Consumer Goods company. ice cream. Lifebuoy. touching the lives of two out of three Indians with over 20 distinct categories inHome & Personal Care Products and Foods & Beverages. Sunsilk.300 managers.would be to provide information about the financial position. Closeup. 401 crores (financial year 2010 . 239 crores (for the 15 month period ± January 1. Dove. cosmetics. Pond’s. Surf Excel. Financial statements should be understandable.touching the lives of two out of three Indians with over 20 distinct categories in Home &Personal Care Products and Foods & Beverages. Vaseline. The company¶s Turnover isRs." HISTORY OF HUL DABUR INDIA HUL HUL works to create a better future every day and helps people feel good. and water purifiers. Therefore. Pepsodent.19. reliable and comparable as it gives a correlation about reported assets. The mission that inspires HUL's over 15.000 employees and has an annual turnover of around Rs. Brooke Bond. Knorr. Its portfolio includes leading household brands such as Lux. Kissan. packaged foods. the Company is a part of the everyday life of millions of consumers across India. These products endow the companywith a scale of combined volumes of about 4 million tones and sales of nearly Rs. Bru.000 employees. 2008 to March 31. it has been recognized as a Golden Super Star Trading House by the Government of India. detergents. HUL is a subsidiary of Unilever. HULis also one of the country's largest exporters. deodorants. With over 35 brands spanning 20 distinct categories such as soaps. performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. 13718crores. Axe. tea. Lakmé. liabilities. one of the world’s leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about €44 billion in 2011. Unilever has about 52% shareholding in HUL.2011). 2009). shampoos. skin care. financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently. Clinic Plus. including over 1. coffee. income and expenses which are directly related to an organization's financial position. look good and get more out of life with brands and services that are good for them and good for others. Rin. The Company has over 16. Fair & Lovely. 20. Kwality Wall’s and Pureit. Wheel. is to "add vitality to life. relevant. equity." HUL meetsevery day .
It is a mission HUL shares with its parentcompany. ranging from hair care to honey. Vatika. Wheel. Rin. From those humble beginnings. branded staples. personal products. HUL's brands like Lifebuoy. hygiene. Pond's. Its brands are built on the foundation of trust that a Dabur offering will never cause sdanyone slightest of harm. which holds 52. tea.Sunsilk. Clinic. S. the Dabur brand has stood for goodness through a natural lifestyle. The company was started by a doctor Dr. An umbrella name for a variety of products.Kwality Wall's ± are household names across the country and span many categories soaps. detergents. Knorr Annapurna. . Brooke Bond. and about 250 million rural consumers DABUR: Dabur India Limited is the fourth largest FMCG Company in India and has a turnover of approximately US$ 750 Million (Rs.1 Crore – FY 2010) & Market Capitalization of over US$ 3. Surf Excel. Lakme. 3417.3 million retail outlets reaching the entire urban population. look good and get more out of life.K. These products are manufactured over 40 factories across India. personal care and food products. The trust levels that this brand enjoys are phenomenally high. and personal care with brands that help peoplefeel good. The operationsinvolve over 2. the company has grown into India’s leading manufacturer of consumer healthcare.675 individual shareholders and financial institutions. Dabur Chyawanprash. Unilever. The rest of the shareholding isdistributed among 360. Burman in 1884.10% of the equity. ice cream and culinary products. Dabur is consistently ranked among India’s top brands.000 suppliers and associates.needs for nutrition. The brand name Dabur is derived from the words ‘Da’ for ‘Daktar’ or ‘Doctor’ and ‘bur’ from Burman. Lux. HUL's distribution network comprises about4. Fair & Lovely.000 redistribution stocks. Pepsodent. coffee.5 Billion (Rs 15500 Crore). Hajmola and Real. with brands like Dabur Amla. Kissan. Over its 125 years of existence. covering 6. Close up.
Mother brand Dabur has a strong image in customers mind.1 Crore – FY 2010) Differentiated products-strong herbal and natural products and more than 120 year of experience. comprising of Real Fruit Juice and Homemade cooking pastes to form the core of this division’s product portfolio.9 retail outlets and high penetration in urban and rural areas. Brand strength-various strong brand in diverse categories. The brand went on to become the biggest success of the company and in 1997 the Foods division was created. . In 1940 Dabur diversified into personal care products with the launch of its Dabur Amla Hair Oil which was a hit with Indian consumers. Wide distribution network-covering 1. OVERVIEW OF DABUR One of the largest FMCG company has a turnover of approximately US$ 750 Million (Rs.In early 1900s. They set up a R&D center which paved way for the growth. 3417. In 1996 it entered processed foods market with Real Fruit Juice. the next generation of Burmans took a conscious decision to enter the Ayurvedic medicines market and that led to the commercial start of Dabur. Hajmola was launched in 1978 and the candy version came in 1989 (another brand Swad had created the new market of digestive candies at that time) and soon became a huge success. In 1949 it launched Dabur Chyawanprash and by 1970 launched Dabur Lal Dant Manjan. Dabur shifted its base to Delhi in 1972.
Dabur lal dant manjan has 35% of market share having top position in baby massage oil market. Working closely with Dabur. Is vatika. Accenture recommended a two-pronged strategy: migration to a nimbler outsourcing model that would generate value through agility and support business initiatives and maintenance of its SAP enterprise resource planning (ERP) system. To bring these initiatives to life. Accenture assembled a team of highly skilled industry experts. each brand having 100 crore turnovers. Vatika hair oil and shampoo is the high growth brand of the company. In digestive tablets category hajmola is the leader with 75% market share. Dabur honey is the market leader with over 40% market share in branded honey market. anmol sarsono amla. Leading brand of Dabur India Ltd. From an IT perspective. including:- Why Dabur has chosen as peers for Financial comparison with HUL . dabur amla. sales and distribution capabilities and use IT as a strategic enabler for its business strategy. the Accenture team initiated a number of high-impact projects. dabur chyanprash and lal dant manjan. % of Dabur products in the market Baby oil & skin care=7% Home care=6% Hair care=32% Digestive & candies=9% Health supplements=24% Oral care=22% SALES STRATEGY Accenture proposed that Dabur improve its supply chain management. dabur hajmola. Dabur chayanprash is the largest selling ayuravedic medicine with over 65% market share. as well as professionals with extensive SAP design and implementation experience.
The commonly used tools for financial statement analysis is: Financial Ratio Analysis BALANCE SHEET OF HUL: . To have a means of comparative analysis across time in terms of: – – – Intracompany basis (within the company itself) Intercompany basis (between companies) Industry Averages (against that particular industry’s averages) • To apply analytical tools and techniques to financial statements to obtain useful information to aid decision making.Dabur has chosen as their sales revenue is very close to HUL Vitality of Company's financial performance through Financial Ratios Financial Statement Analysis will help business owners and other interested people to analyse the data in financial statements to provide them with better information about such key factors for decision making and ultimate business survival • To use financial statements to evaluate an organisation’s – – • Financial performance Financial position.
128.88 269.00 1.40 0.80 477.23 236.20 8.00 0.16 16.00 528.00 0.35 1.72 138.00 738.28 450.90 .15 100.00 749.77 278.78 253.24 455.576.Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 12 mths 12 mths 12 mths 12 mths 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 174.07 855.32 51.98 877.27 19.05 261.33 687.90 585.46 67.32 16.303.11 518.48 48.44 130. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits 883.23 297.00 0.28 0.58 202.40 86.00 0.09 0.92 519.21 174.46 26.61 30.51 Mar '11 86.94 0.77 210.00 927.27 81.51 0.00 441.07 174.53 467.69 545.45 308.07 0.33 25.65 111.101.80 106.45 Mar '10 86.69 0.20 1.56 11.01 Mar '08 12 mths 12 mths 12 mths 12 mths 12 mths Application Of Funds Gross Block Less: Accum.76 86.72 528.76 0.12 461.93 189.26 130.00 662.00 651.354.72 348.17 261.31 348.54 Mar '12 174.27 1.51 86.51 298.48 0.26 270.00 1.97 206.36 368.95 23.57 224.24 16.38 24.12 254.15 273.36 32.08 689.57 235.18 Mar '09 86.16 406.013.12 552.23 460.16 17.94 603.45 0.71 232.92 0.37 201.32 497.81 166.14 0.21 0.94 115.09 766.72 112.78 1.
It's comparing the number against previous years. The other side considers tangible and measurable factors (quantitative). the industry. It is simply the quotient of two numbers. and might perform in the future. If used in conjunction with other methods. which are related to each other and mutually interdependent.RATIO ANALYSIS: Fundamental Analysis has a very broad scope. . Ratio is express by dividing one figure by the other related figure. It is a mathematical yardstick that measures the relationship two figures. Ratio analysis isn't just comparing different numbers from the balance sheet. or even the economy in general. quantitative analysis can produce excellent results. and cash flow statement. MEANING OF RATIO: A ratio is one figure express in terms of another figure. Ratios look at the relationships between individual values and relate them to how a company has performed in the past. It can be expressed as a fraction or as a decimal or as a pure ratio or in absolute figures as “so many times”. As accounting ratio is an expression relating two figures or accounts or two sets of account heads or group contain in the financial statements. This means crunching and analyzing numbers from the financial statements. Thus a ratio is an expression relating one number to another. other companies. One aspect looks at the general (qualitative) factors of a company. income statement.
A company whose leverage ratio is higher than a competitor's has more debt per equity. Ratio analysis can provide valuable information about a company's financial health. determined and presented. While a detailed explanation of ratio analysis is beyond the scope of this section. For example. You obtain a better indication of the direction in which a company is moving when several ratios are taken as a group. You can use this information to make a judgment as to which company is a better investment risk. Cross-sectional analysis compares financial ratios of several companies from the same industry. It can provide you with a valuable investment analysis tool. By comparing the leverage ratios of two companies. which is easy to use. you can determine which company uses greater debt in the conduct of its business. However. you must be careful not to place too much importance on one ratio.MEANING OF RATIO ANALYSIS: Ratio analysis is the method or process by which the relationship of items or group of items in the financial statement are computed. you could use a ratio of a company's debt to its equity to measure a company's leverage. we will focus on a technique. There are several ratios at the disposal of an analyst but their group of ratio he would prefer depends on the purpose and the objective of analysis. Ratio analysis is an attempt to derive quantitative measure or guides concerning the financial health and profitability of business enterprises. . This technique is called cross-sectional analysis. Ratio analysis can be used both in trend and static analysis. A financial ratio measures a company's performance in a specific area.
OBJECTIVE OF RATIOS Ratio is work out to analyze the following aspects of business organizationA) Solvency1) Long term 2) Short term 3) Immediate B) Stability C) Profitability D) Operational efficiency E) Credit standing F) Structural analysis G) Effective utilization of resources .
And its competitors from 2008-201 2 25000 20000 Dabur 1 5000 HUL 1 0000 5000 0 2008 2009 201 0 201 1 201 2 .ANALYZING COMPANY STATUS WITH CHARTS: Sales HUL.
And its competitors from 2008-201 2 2500 2000 1 500 Dabur 1 000 HUL 500 0 2008 2009 201 0 201 1 201 2 Share Capital HUL. And its competitors from 2005-2009 250 200 1 50 Dabur 1 00 HUL 50 0 2008 2009 201 0 201 1 201 2 .Net Profit HUL.
39 13.98 1.04 60.75 11.00 6.25 12.60 94.25 81.62 70.76 12.53 12.00 9.09 12.92 1.56 11.45 --0.03 13.68 16.50 12.08 13.70 12.70 60.41 11.75 11.25 93.46 142.25 16.26 1.40 11.47 .43 --0.06 8.50 15.50 13.51 0.50 12.67 12.HUL RATIOS Mar '12 Mar '11 Mar '10 Mar '09 Dec '07 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios 0.68 0.08 76.45 9.54 63.47 15.84 11.38 102.84 0.94 60.00 9.92 0.47 87.29 12.59 14.34 113.72 122.56 102.97 116.00 7.50 12.29 12.49 6.94 14.56 12.61 147.00 6.29 106.88 14.90 12.33 14.12 12.04 12.40 1.06 -15.12 12.59 121.09 118.91 138.00 7.29 12.45 60.45 10.20 102.78 85.84 106.18 11.07 12.78 14.76 12.20 -0.86 13.75 5.74 14.86 0.46 --0.36 1.85 9.19 12.78 15.46 13.58 11.95 13.82 81.57 80.34 91.25 0.83 0.07 93.61 6.30 60.
425.354.417.30 0.42 220.09 0.67 2.44 61.00 873.12 332.78 253.00 927.00 0.07 552.16 17.00 0.95 215.07 174.00 0.44 0.00 2.00 2.101.68 0.00 1.92 HUL 174.92 0.633.00 811.51 Dabur India 61.57 235.COMPARISION WITH COMPETITORS: HUL Dabur India Marico Mar '11 Mar '11 Mar '11 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 215.95 0.49 1.61 Marico Mar '11 Mar '11 Mar '11 Application Of Funds .07 0.633.35 1.00 0.00 0.
00 6.23 460.27 0.036.92 766.811.85 82.74 222.15 369.58 202.19 1.61 .36 1.21 1.26 943.96 274.20 198.260.33 1.68 2.07 31. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.03 687.08 1.05 535.72 1.633.00 539.099.324.36 454.317.41 242.354.19 0.759.51 421.095.10 6.264.22 118.95 587.22 961.074.30 0.589.92 519.88 269.16 299.12 461.91 4.95 1.81 166.00 242.98 13.93 4.08 689.52 470.169.46 2.00 0.32 497.00 1.26 0.46 26.56 11.00 2.494.590. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets 3.37 1.98 7.425.358.62 1.46 45.Gross Block Less: Accum.20 281.
INTERPRETAION FROM ABOVE RATIOS: PROFITABILITY RATIOS: Profitability Measures assess the firm's ability to operate efficiently and are of concern to owners. Gross profit margin serves as the source for paying additional expenses and future . (Net Profit / Avg. creditors. the return on assets and return on equity figures will be the same. (Net Earnings/Share’s holder Equity) * 100 Gross Profit Margin (GPM) It gives a good indication of financial health. If a company has no debt. ROA is displayed as a percentage. Return on Equity (ROE) The amount of net income returned as a percentage of shareholders equity. Total Asset) * 100 Return on assets measures a company’s earnings in relation to all of the resources it had at its disposal (the shareholders’ capital plus short and longterm borrowed funds). A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Thus. it is the most stringent and excessive test of return to shareholders. and management Return on Asset (ROA) ROA gives an idea as to how efficient management is at using its assets to generate earnings. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Calculated by dividing a company's annual earnings by its total assets.
1/. since such companies are generally subject to similar business conditions.savings. On the other hand if we look at ROA of these two companies. (Gross Profit/ Net Sales) * 100 Net Profit Margin (NPM) This number is an indication of how effective a company is at cost control. Hence it is necessary to analyse the different ratio in one picture frame rather than looking at them simultaneously. if ROA is low or the company is carrying a lot of debt. assets comprise of share holder equity and long term borrowed funds. the more effective the company is at converting revenue into actual profit. (Net Profit/ Net Sales) * 100 ROA and ROE The ROA value gives investors an idea of how effectively the company is converting the money it has to invest into net income. In case of Dabur and Marico. The net profit margin is a good way of comparing companies in the same industry. ROA tells about company performance while keeping all the assets into consideration and not only shareholder equity alone. Debt to equity ratio is zero implies HUL as a No debt company. Now. In case of HUL it is always more if last 2 years then Marico and Dabur. As we know. ROE is lying around 45% to 60% which suggests company’s pay back as per investment made by share holder.of investment as asset. It clearly signifies that for every Rs. On the other hand. . ROE is certainly a “hint” that management is giving shareholders more for their money. ROA was around 87% for HUL. The higher the net profit margin is. In case of HUL. HUL earning 87paise where it is quite low in case of Dabur and Marico. In 2010. Hence ROE is same as ROA for HUL. a high ROE can give investors a false impression about the company's fortunes. it is fluctuating near to 20 % in the last two years.
1/. the better. not using debt financing signifies the low risk and self dependency in investor’s eye. From investor point of view. as HUL is a zero debt company (ROE=ROA) while other two are not. it is above 1. NPM = 20% means for every Rs. If the difference is more that signifies the operational efficiency of the company. However for companies which have very large market capitalization like HUL. In case of HUL the ratio is lying between 0. At the same time for Marico. Hence we can comment on good operational efficiency of HUL with respect to Dabur and Marico. The lower the difference between NPM and GPM. By looking at Current ratio only we can say Marico has the highest ability to meet shortterm debt obligations. . LIQUIDITY RATIOS: Liquidity Ratio: The higher the current ratio.1/Hence higher the NPM and GPM.2. Discussing about NPM and GPM.8 to 0 .it generates in revenue or sales. Mathematically GPM will always be greater than or equal to NPM as there will some overhead expenses. If the company have taken care of debt financing it could have increased up its operations and revenues. Eg. the different between NPM and GPM is Net Profit (NP) = Gross Profit (GP) – overhead The profit margin tells you how much profit a company makes for every Rs. This difference is less in case of HUL as compare to other peers considered relatively.2. the more capable the company is of paying its obligations. indicates better financial health of a company. Implies HUL is not using debt financing. overheads are not zero hence GPM > NPM. I might appreciate the fact the company has zero debt but debt is cheaper then equity.One other important prospective.9 whereas for Dabur it’s .9 to 1. Practically.
e. inventory turnover ratio should be good. The excess inventory gives enough confidence to firm to act in future. That ratio is quick ratio. In-fact Marico has the lowest inventory ratio. Inventory Turnover Ratio: Keeping more inventory is not a false behaviour(as in case of HUL). For HUL the difference between quick ratio and current ratio is very significant as compare Marico and Dabur which implies heavy inventory in HUL. As per our scope of analysis we have concluded Marico is utilizing its fixed assets in the way resulting addition to sales revenue to maximum followed by HUL and then Dabur. Apart from Inventory turnover ratio. However the decrease in ratio is due to investments made in PPE by HUL and Marico where as in case of Dabur it is disinvestment in fixed asset. The difference is least in Marico and then Dabur studied for last two years. one might argue having enough inventory can guard you against various unfavourable situation like in-ability to produce the goods due to any factor. Investments made on Plant. natural calamity etc. Property and Equipments (PPE). . the current assets also include inventory of a company. one must analyse at least four –five years of patterns as investment made on PPE would yield higher production in significant amount of time. excess demand due to factors like season. So that the same amount of goods will present in ware house but it will keep rotating.However. To analyse fixed turnover ratio. The inventory turn ratio of Dabur is quite high comparatively to Marico and HUL. Hence we have concluded on liquidity parameter Marico is on top followed by Dabur and then HUL. Generally inventories are not readily converted into cash hence we need another ratio that does not includes inventory in current asset to give a more precise picture of any firm’s liquidity. Marico has highest quick ratio but lowest inventory turn ratio implies Marico maintaining high inventories but its sitting period of good in inventory is more comparison to HUL and Dabur which are maintaining low inventory but quickly converting it into revenues. Thus analysing quick ratio and inventory ratio in single frame. we will be discussing on fixed asset and Total Asset turnover ratio to comment on operational efficiency. However with no doubt this inventory should be in rotation i. Fixed Asset Turnover Ratio A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues. The fixed turnover ratio is decreasing in case of all the three companies.
But very high D/E creates serious troubles in decision making process and affects the flexibility of top management in any firm. the ratio has decreased in the last two years indicating lowering of risk. implies higher expectation of earning/willingness to pay to earn per unit of income. P/E ratio noticed high in last year for HUL. Also in case of Dabur and Marico. If market price of any firm’s stock is raising and proportionately dividend is not increasing resulting increase in P/E ratio. D/E Ratio A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This implies the risk factor in HUL is very less and financial leverage is least in comparison of Dabur and Marico.P/E Ratio In general. . yet as an investor I might be interested as in the hope the currently market price of share is high and increasing over time being receiver of low dividend (targeting for long term). D/E is quite high in case of Marico and comparatively very less in Dabur. INVESTOR PERSPECTIVE & OUR RECOMMENDATION: FOR HINDUSTAN UNILEVER: A look at the 2 years closing chart pattern of Hindustan Unilever should convince investors of different experiences and propensities why this is a must-have stock among the several thousand being traded on the BSE and NSE. Higher D/E ratio can facilitate company to use the benefits of debt financing as Debt is not always bad and Debt is always cheaper then equity. On the contrary low D/E implies a company is not enough using the debt. a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. The difference in ratio is not much in the three companies considered to comment on financial health comparison but P/E directly affected by market situation also. Discussing about D/E of HUL it is zero means it is a no debt company.
The stock reached a new closing high of 343 in Jun ‘11 at the upper-end of the upwardsloping channel. This time. the stock reached three closing tops – each a little higher than the previous one. Note that when the stock dropped to its new closing low of 220 in Mar ‘10. the technical indicators all touched lower tops. hinted at a resumption of the rally. followed by a triple-bottom reversal pattern from Feb to May ‘11.” That expression could just as well describe the HUL stock. Negative divergences in the technical indicators warned of a correction.There is an old saying: “You can’t keep a good man down. From Sep ‘10 through Jan ‘11. The stock embarked on a fresh bull rally within an upward-sloping channel that is still intact. all four technical indicators reached higher bottoms (marked by blue arrows). The positive divergences signaled the end of the bear period. . The negative divergences led to a sharp drop below the 200 day EMA. positive divergences from all four technical indicators that touched higher bottoms. Once again.
Bottomline? The stock chart pattern of Hindustan Unilever is in a bull market. but the stock is worth its weight in gold. All four technical indicators – MACD. The correction from the new closing high of 353 may continue a bit longer. Valuations are not cheap. Regular dividends are an added attraction. RSI and slow stochastic are correcting an overbought situation. The second. making steady rather than spectacular progress. more important one. The first is that the stock’s price movements provide long-term trading opportunities. The strategy should be to use dips towards the lower end of the upward-sloping channel to add. All three EMAs are rising and the stock is trading above them – a sign of a bull market. as it swings up and down within the upward-sloping channel. ROC.There are two points of interest here. and is in a bull market . Growth and margins are back on the upswing. is that between Nov ‘10 and Sep ‘11 the stock has gone up to touch new highs.even as the Sensex and Nifty are in clear down trends. FOR DABUR: Dabur India .
This tip is purely based on analytical indications. Current EPS is Rs 4. The target once again could be near to its 52 week high i.87 and P/E stands at 41. support line is around Rs. . This level provides moderate amount of returns in short term i.2 months.37. 1 . Although P/E ratio looks high. Dabur is one of the good FMCG stock as everyone knows. 52 week low was at Rs 121.The stock investing tip to buy stocks of Dabur India for short term time frame can be considered as an option. If you look at the 6 months chart. 218. The target price could get achieved in one to two months.95. Dabur India touched its 52 week high recently at Rs 218.e. FMCG stocks have always been considered as safe stocks in stocks markets and so command a higher P/E. 195 which could be considered as stop loss.e.
At the end I can say that Hindustan Unilever Ltd.We came to know about the financial condition of the three companies’ relatively good with HUL being in ideal condition for investment. They are able to generate customer and these companies are providing new services and products with latest innovation to customers.CONCLUSION As we have given the project work to compare the three well known FMCG companies i. HUL DABUR and MARICO .e. Is in good financial position and marico & dabur can be titled as the market followers and can promptly become the challengers in near future. .
investopedia.co.in 4) . http://www. http://www.com 2) .com 6) http://investmentsfordummieslikeme.REFERENCES: 1) . http://www.com .com 3) . http://www.com 5) .dabur. http://www.hul.marico.blogspot.investorwords.
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