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INDUSTRY RESEARCH REPORT ON FAST MOVING CONSUMER GOODS (FMCG)

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FAST MOVING CONSUMER GOODS (FMCG)

11th January 2009

Indian Economy: An Overview
Indian Economy is among one of the fastest growing economy in the World. It has registered a robust growth rate in past few years. But weakening of U.S. Economy, higher inflation rate, higher interest rate, higher crude prices and higher commodity prices have a reflection on Indian Economy too. The Index of Industrial Production (IIP) has registered a double digit growth of 11.5 per cent in the year 2006-07 but it slip down by 300bp to 8.5 per cent in the year 2007-08. According to Centre for Monitoring Indian Economy (CMIE) forecast, the IIP could be at 4.5 per cent for the year 2008-09.

Indian Economy has registered an over of 9 per cent of growth in Gross Domestic Product (GDP) for last 3 years. Fin Min expect GDP to be between 7-8 per cent for the year 2008-09.

According to CMIE forecast, the IIP could be at 4.5 per cent for the year 2008-09.

Source: CMIE

To fight against the slowdown of the Economy, Government of India & Reserve Bank of India took many fiscal as well as monetary actions. Clubbed with fiscal & monetary actions, decreasing commodity prices, decreasing crude prices and lowering interest rate, we expect that Indian Economy could again register a robust growth rate in the year 2009-10. Inflation stands at 5.91 per cent on 27th December 2008 against a high of 12.63 per cent on 9th August 2008.

Inflation stands at 5.91 per cent against a high of 12.63 per cent.

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Hem Institutional Research Desk

5 per cent for the year 2007-08.www. The total FMCG market is in excess of INR 85. Godrej Consumer Products Limited to name a few. This would minimize input cost pressure for soap companies like HUL. 85. Emami Limited. Nirma Limited. industry sales accelerated by more than 15 per cent backed by healthy growth in off take as well as price hikes affected. Dabur India Limited. Federation of Indian Chambers of Commerce and Industry (FICCI) predicted that the Indian FMCG industry sales could grow 16 per cent during 2008-09. Since October. For Private Circulation Only 2 Hem Institutional Research Desk . In September 2008 quarter. the industry was largely able to hold on to margins through a combination of strategies such as reduction in packaging cost and changes in product mix.2 per cent during the December 2008 quarter. FMCG sector could touch around INR 140. Procter & Gamble Hygiene & Health Care Limited. low penetration levels. India's FMCG sector is the fourth largest sector in the economy and creates employment for more than three million people in downstream activities. the FMCG sector has registered a growth rate of 14.000 Crores Indian FMCG market is one of the important sector and has registered a robust growth rate. inflation rate has been waning and fell th to 5. Aggregate sale FMCG industry is expected to increase by 19. The FMCG Industry remained insulated from inflation led demand slowdown. FMCG industry sales could grow at 16 per cent during 2008-09.hemonline.2 per cent during the December 2008 quarter.63 per cent in September quarter. There is a huge growth potential for all the FMCG companies as the per capita consumption of almost all products in the country is amongst the lowest in the world. Its principal constituents are Household Care. According to CMIE Data. lower per capita consumption and intense competition between the organized and unorganized segments. palm oil price continued to weaken further and in November 2008 its price ruled 38 per cent lower than the year ago level. It plays a vital role being a necessity and inelastic product which touches every life in one or the other aspect. Nirma and Godrej Consumer Products. Aggregate sale of the industry is expected to increase by 19.000 Crores.91 per cent for the week ended 27 December 2008. Inflation as measured by the wholesale price index (WPI) shot up to 9. Commodity prices after peaking are on the downswing. Even fall in crude price is expected to make petroleum derivatives like LAB (key input for detergents) cheaper as well reduce packaging costs. According to CRISIL anticipation.000 Crores by 2015. Thus demand for personal care products is likely to remain buoyant. Even during the slowdown of the economy. palm oil price fell by 13 per cent sequentially. FMCG Industry is characterized by a well established distribution network. In the subsequent months. low operating cost. According to CMIE Data. The key players in FMCG Industry are Hindustan Unilever Limited. According to Federation of Indian Chambers of Commerce and Industry (FICCI). Personal Care and Food & Beverages.5 per cent in June 2008 quarter and further climbed up to 12. It is currently growing at double digit growth rate and is expected to maintain a high growth rate. In both these quarters. During this period. Colgate Palmolive India Limited.com Industry Snapshot FMCG Sector is one of the most important sectors for each and every Economy.

In washing powder HUL is the leader with ~38 per cent of market share. The demand for detergents has been growing but the regional and small unorganized players account for a major share of the total volume of the detergent market. The skin care market is at a primary stage in India. Other major players are Nirma. However. HUL is the leader with market share of ~53 per cent. For Private Circulation Only 3 Hem Institutional Research Desk . With changing life styles. followed by CavinKare with a market share of ~12 per cent and Godrej with a market share of ~3 per cent.300 Cr. With increase in disposable incomes. The personal wash can be segregated into three segments: Premium. The major players in this segment are Hindustan Unilever with a market share of ~54 per cent.com Industry Category and Products Household Care Personal Wash The market size of personal wash is estimated to be around INR 8.www. greater product choice and availability. increase in disposable incomes. It is available in 5m retail stores. because increase in prices has led some consumers to look for cheaper substitutes. The Skin Care segment is expected to register a growth rate of mare that 16 per cent. growth in rural demand is expected to increase because consumers are moving up towards premium products. Personal Care Skin Care The total skin care market is estimated to be around INR 3. Economy and Popular. 75 per cent are in the rural areas.hemonline. the demand for the household care products is flourishing. emergence of small pack size and sachets. The segment is expected to grow by double digit. Hindustan Unilever Limited is the biggest producer of Personal wash and detergents. Godrej occupies second position with market share of ~10 per cent. With rapid urbanization. people are becoming aware about personal grooming. out of which.400 Cr. Household care segment is characterized by high degree of competition and high level of penetration. The penetration level of soaps is ~92 per cent. in the recent past there has not been much change in the volume of premium soaps in proportion to economy soaps. Henkel and Proctor & Gamble.000 Cr. The penetration level of this segment in India is around 20 per cent. Detergents The size of the detergent market is estimated to be INR 12.

500 Cr. Oral Care The oral care market can be segmented into toothpaste . while HUL occupies second position with market share of ~30 per cent. Coffee The Indian beverage industry faces over supply in segments like coffee and tea.www.hemonline. hair colorants & conditioners.com Industry Category and Products (Cont…) Personal Care Hair Care The hair care market in India is estimated at around INR 3. More than 50 per cent of the market share is capture by unorganized players. and others. On the other hand.700 Cr. shampoo is not as penetrated which is expected to be around 40 per cent. The penetration level of toothpowder/toothpaste in urban areas is three times that of rural areas. Shampoos The Indian shampoo market is estimated to be around INR 2. Again the market is dominated by HUL with around ~47 per cent market share. According to Tea Board of India. The total toothpaste market is estimated to be around INR 3. In toothpowders market. Colgate and Dabur are the major players. ITC. The hair care market can be segmented into hair oils. remains under penetrated in India with penetration level ~50 per cent. Tea The major share of tea market is dominated by unorganized players. It has low penetration level even in metros. and hair gels. Dabur occupies second position at ~17 per cent. HUL and Tata Tea. The food category has also seen innovations like softies in ice creams.23 per cent. Personal Wash is a highly penetrated category. P&G occupies second position with market share of around ~23 per cent.60 per cent. Companies can bet on growth rate for the shampoo category. ready to eat rice by HUL and pizzas by both GCMMF and Godrej Pillsbury. toothpowder . For Private Circulation Only 4 Hem Institutional Research Desk . shampoos.600 Cr. The market is further expected to increase due to increased marketing by players and availability of shampoos in affordable sachets. Nestle and Amul slug it out in the powders segment. more than 50 per cent of the market share is in unpacked or loose form. However.17 per cent. especially toothpastes. Food & Beverages Food Segment The foods category in FMCG is gaining popularity with a swing of launches by HUL.800 Cr. This category has 18 major brands aggregating INR 4. It has the penetration level of only 13 per cent in India. The major players in this segment are Nestlé. with all India penetration levels exceeding 90 per cent. toothbrushes . The oral care market. Marico is the leader in Hair Oil segment with market share of ~ 33 per cent. Godrej. This segment is dominated by Colgate-Palmolive with market share of ~49 per cent. the export of tea is expected to be more that 210 million kg for the year 2008 against about 179 million kg last year. Sachet makes up to 40 per cent of the total shampoo sale. Anti-dandruff segment constitutes around 15 per cent of the total shampoo market. Leading branded tea players are HUL and Tata Tea.

com Growth Prospect Large Market India has a population of more than 1.150 Billions which is just behind China. Consumer mind set changed towards “Money for Value” from “Value for Money” Survey by A. An increase in disposable income. There is a change in the mind set of the Consumer and now looking at “Money for Value” rather than “Value for Money”.hemonline. C. Increase in spending pattern because of higher disposable income. Nielsen shows about 71 per cent of Indian take notice of packaged goods' labels containing nutritional information compared to two years ago which was only 59 per cent. FMCG Industry which is directly related to the population is expected to maintain a robust growth rate. because of changing lifestyles. Consumers are switching from economy to premium product even we have witnessed a sharp increase in the sales of packaged water and water purifier. C. Findings according to a recent survey by A. rising disposable income etc.450 Billion and will surpass China to become the World largest in terms of population. by 2030 India population will be around 1. We have seen willingness in consumers to move to evolved products/ brands. Changing Profile and Mind Set of Consumer People are becoming conscious about health and hygienic. of household mainly because of increase in nuclear family where both the husband and wife are earning. Nielsen shows about 71 per cent of Indian take notice of packaged goods' labels containing nutritional information compared to two years ago which was only 59 per cent. According to the estimates. There is an upward trend in urban as well as rural market and also an increase in spending in organized retail sector. For Private Circulation Only 5 Hem Institutional Research Desk . has leads to growth rate in FMCG goods. India is second largest Country in terms of Population growth and increase in population has a direct relation to FMCG Products.www. Source: UN Population Division: Medium variant Spending Pattern An increase is spending pattern has been witnessed in Indian FMCG market.

com Advantage India Governmental Policy Indian Government has enacted policies aimed at attaining international competitiveness through lifting of the quantitative restrictions. Source: DIPP For Private Circulation Only 6 Hem Institutional Research Desk . ITC) or ready-to-eat foods. Central & State Initiatives Recently Government has announced a cut of 4 per cent in excise duty to fight with the slowdown of the Economy. There is an increase of about 150 per cent in Net Inflow for Vegetable Oils & Vanaspati for the year 2008. But the benefit from the 4 per cent reduction in excise duty is not likely to be uniform across FMCG categories or players. There is a continuous growth in net FDI Inflow. Even players with manufacturing facilities located mainly in tax-free zones will also not see material excise duty savings. biscuits (Britannia Industries.hemonline. is allowed for most of the food processing sector except malted food. up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment. 100 per cent export oriented units can be set up by government approval and use of foreign brand names is now freely permitted. The changes in excise duty do not impact cigarettes (ITC. Godfrey Phillips). There is a continuous growth in FDI Inflow in India. automatic foreign investment and food laws resulting in an environment that fosters growth. as these products are either subject to specific duty or are exempt from excise.www. 4 per cent reduction in excise duty Foreign Direct Investment (FDI) Automatic investment approval (including foreign technology agreements within specified norms). This announcement has a positive impact on the industry. alcoholic beverages and those reserved for small scale industries (SSI). Only large FMCG-makers may be the key ones to bet and gain on excise cut. reducing excise duties.

Lower price and smaller packs are also likely to drive potential up trading. Still there is an untapped market and most of the FMCG Companies are taking different steps to capture rural market share.hemonline. Beverages Indian tea market is dominated by unorganized players. coconut. The market for FMCG products in rural India is estimated ~ 52 per cent and is projected to touch ~ 60 per cent within a year. especially toothpastes. the growth potential is huge. milk. thus highlighting the huge potential for expansion of this industry. The working rural population is approximately 400 Millions. India is the largest producer of livestock. remains under penetrated in India with penetration rates around 50 per cent. or ~70 per cent of the Indian population and accounts for ~50 per cent of the total FMCG market. With rise in per capita incomes and awareness of oral hygiene. Hindustan Unilever Ltd is the largest player in the industry and has the widest market coverage. Export .www.com Market Opportunities Vast Rural Market Rural India accounts for more than 700 Million consumers. It adds a cost advantage as well as easily available raw materials. yet only around 15 per cent of the milk is processed. Even investment opportunities exist in value-added products like desserts. And an average citizen in rural India has less then half of the purchasing power as compare to his urban counterpart. Packaged Food Only about 10-12 per cent of output is processed and consumed in packaged form. The organized liquid milk business is in its infancy and also has large longterm growth potential. fruits & vegetables. Export . For Private Circulation Only 7 Hem Institutional Research Desk . Even the Government has offered zero import duty on capital goods and raw material for 100% export oriented units. wheat. puddings etc. Oral Care The oral care industry. Multi National Companies outsource its product requirements from its Indian company to have a cost advantage. FMCG Industry has Sectoral Opportunities as rural market has growth potential. sugarcane. More than 50% of the market share is capture by unorganized players highlighting high potential for organized players.Leveraging the Cost Advantage India offers cost advantage benefits by offering lower raw material & labor cost Sectoral Opportunities Major Key Sectoral opportunities for Indian FMCG Sector are mentioned below: Dairy Based Products India is the largest milk producer in the world. spices and cashew apart from being the second largest producer of rice.“Leveraging the Cost Advantage” Cheap labor and quality product & services have helped India to represent as a cost advantage over other Countries.

There is ample number of substitute suppliers available and the raw materials are also readily available and most of the raw materials are homogeneous.hemonline. Hence the intensity of rivalry is very high. The intensity of rivalry is very high among the competitor of FMCG Industry. There is no monopoly situation in the supplier side because the suppliers are also competing among themselves. The wide range of choices and needs give a sufficient room for new product development that can replace existing goods. Market Players use all sorts of tactics and activities from intensive advertisement campaigns to promotional stuff and price wars etc. Potential Entry of New Competitors FMCG Industry does not have any measures which can control the entry of new firms. This is because in FMCG industry the switching costs of most of the goods is very low and there is no threat of buying one product over other. variants and design. Hence potential entry of new firms is highly viable. Customers are never reluctant to buy or try new things off the shelf. There are scarce customers because the industry is highly saturated and the competitors try to snatch their share of market. Bargaining Power of Consumers Bargaining power of consumers is also very high. Rivalry among Competing Firms In the Fast Moving Consumer Goods (FMCG) Industry. Bargaining Power of Suppliers The bargaining power of suppliers of raw materials and intermediate goods is not very high.com Porter's Five Forces Model Porter's Five Forces model outlines the primary forces about competitiveness within the industry. Potential Development of Substitute Products There are complex and never ending consumer needs and no firm can satisfy all sorts of needs alone. rivalry among competitors is very fierce. The resistance is very low and the structure of the industry is so complex that new firms can easily enter and also offer tough competition due to cost effectiveness. Even there is high bargaining power for Suppliers as well as for Buyers. This leads to higher consumer’s expectation. Every other day there is some short of new product. For Private Circulation Only 8 Hem Institutional Research Desk . There is a threat for new entrants as well as for substitute.www. There are plenty of substitute goods available in the market that can be replaced if consumers are not satisfied with one.

com Analysis of FMCG Sector SWOT Analysis Strengths: Presence of established distribution networks in both urban and rural areas Low Operational Costs Presence of well-known brands in FMCG sector Availability of raw materials Weaknesses: "Me-too" products which illegally mimic the labels and brands of the established brands Lower scope of investing in technology and achieving economies of scale.www.hemonline. especially in small sectors Low exports levels Opportunities: Large domestic market – over a billion populations Untapped rural market Rising income levels. i.e. increase in purchasing power of consumers Export potential and tax & duty benefits for setting exports units Threats: Tax and regulatory structure Removal of import restrictions resulting in replacing of domestic brands Temporary Slowdown in Economy can have an impact on FMCG Industry Key Take Away for Investors Robust Growth rate in Future Wide distribution network and supply chain Customized Product range to suit local market requirements Superior processing technology Brand building and marketing Higher Disposable Income Awareness about Nutrition and Hygiene For Private Circulation Only 9 Hem Institutional Research Desk .

covering 6.000 redistribution stockists.000 employees.hemonline. Crude prices are down to ~25 per cent from its peak. Close-up. Surf Excel. In FY ending 2007 the Company generated net sales of INR 13. coffee. look good and get more out of life.com Hindustan Unilever Limited (HUL) Company Outlook Positive Company Description Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods (FMCG) Company. hygiene. and about 250 million rural consumers. Brooke Bond. Wheel. The product is available across 21 Indian states and has reached more than 1 million homes in India giving them access to microbiologically safe drinking water. Unilever's Pureit wins the UNESCO Water Digest Water Award 2008-2009 Hindustan Unilever’s product ." HUL meets everyday needs for nutrition. It is also eco-friendly because it reduces waste in the printing process. Rin.40 Cr. Kwality Wall's are household names across the country and span many categories . HUL's brands . Major Recent News Margins scenario likely to change We expected to see an increase in margins.like Lifebuoy. driving a sharp decrease in cost of key inputs for soaps. HUL is taking different steps to reduce the cost and increase the margin. and a profit of INR 1. For Private Circulation Only 10 Hem Institutional Research Desk . HUL has pared down the colour palette used for printing across many products.soaps. the drinking water regulatory agency in the USA. scientific & public health institutions and meets the germ-kill criteria of the Environmental Protection Agency. Fair & Lovely. Knorr-Annapurna. branded staples. Kissan. Clinic. Crude prices have dropped drastically over the last quarter.300 managers.K. Pureit’s performance has been tested by leading international & national medical.914. it has been recognized as a Golden Super Star Trading House by the Government of India.www. Pureit received the award for outstanding contribution in the field of water in India. The operations involve over 2. Sunsilk. reduces packaging spend Unilever is lowering its expenditure on packaging across its portfolio of food brands as part of a wider cost-cutting drive. when crude rose from US$70–80/bbl to US$140/bbl. The system has been used to reduce printed packaging costs for Unilever's products. detergents. ice cream and culinary products. is to "add vitality to life. Unilever. tea.Pureit (a water purifier) has received the UNESCO Water Digest Water Award 2008-2009 in the category of best domestic non-electric water purifier. including over 1. HUL increases the prices of soaps and detergents to partially pass on rising costs. Now.88 Cr. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.913. The primary reason for our upgrade is that we expect the margin scenario to turn around. U. HUL is also one of the country's largest exporters in FMCG product.000 suppliers and associates. HUL's distribution network comprises of about 4. Lakme. The mission that inspires HUL's over 15. personal products. Pepsodent. Lux. They are manufactured over 40 factories across India. and personal care with brands that help people feel good. detergents and packing material.3 million retail outlets reaching the entire urban population. Pond's.

110.16 Crores to register a growth rate of ~16 per cent. The Net Profit registered for the quarter was INR 546.803. has received a good response and is expected to grab big market share.66 Crores as compare to last year of INR 1523. The company has a good growth rate. a water purifier. HUL believe in product innovation and entrance into niche market.hemonline. received a good response from the market. The company is able to maintain its margin and even to capture bigger market by widest coverage. HUL is a market leader in FMCG Industry. Recently company has launch Pureit. Total Income reported by the company for the quarter was INR 4. HUL Q3 (Sep’ 08) Net Profit Soars by ~34 per cent to INR ~547 Crores The Company continues to impress on sales growth with one more quarter of near ~21 per cent growth. The Company sale has registered a CAGR of 9.91 Crores as compare to INR 3. For Private Circulation Only 11 Hem Institutional Research Desk . The new flavor in coffee has leads HUL to snatch big market share in Coffee Division.17 Crores QOQ basis.67 per cent across the last three years where as the profit after taxes has registered a CARG 13. Where as.366. a water purifier.com Key Financial Result for the Financial Year Ending Dec’ 07 The company has reported total income of INR 14.90 Crores to report a growth rate of ~12 per cent.www. Outlook The Company is the largest FMCG player and market leader in most of the product category. Profit after taxes were at INR 1.83 per cent over the last three years.06 Crores.54 Crores as compare to last year of INR 12. The company is innovative in launching new products. The company is among one of the fastest growing in FMCG Industry.61 Crores as compare to INR 408.767. The Company has launched Pureit. The Company has registered a robust growth rate over last few years and has wide market coverage.395.

com Godrej Consumer Products Limited (Godrej) Company Outlook Positive Company Description Godrej Consumer Products Limited (GCPL) continues to be one of the leading FMCG companies in the country. spread over 3 state-of-the-art manufacturing facilities at different location. The acquired arms of Godrej like Keyline.89 per cent of the INR 14. Fairglow. bonding glue and bonding glue removal. The company is a leader in hair colour category and Liquid Detergent category and is among the largest marketer of toilet soaps with leading brands such as Cinthol.9 Crores offer. hair sprays.One of South Africa’s leading hair brand Godrej Consumer Products Limited has acquired 100 per cent stake in the Kinky Group Limited.11 Crores under its buy back offer. The mission that inspires Godrej's over 950 employees. Rapidol and Kinky are expected to create synergy and larger market share. Godrej acquired Kinky . Major Recent News Godrej takes over Joint Venture The Board of Directors of Godrej Consumer Products Limited (GCPL) has approved the acquisition of 50 per cent stake of its joint venture partner SCA Hygiene Products’ stake in Godrej SCA Hygiene Limited.83 Lakhs shares for INR 3. Kinky also offers hair accessories like styling gels.hemonline. human hair extensions. Godrej No 1. hair pieces. South Africa. The company has annual sales of INR 1102. The share represents 20. Cinthol Musk and Godrej Ezee Bright and Soft. is to “Deliver Superior Stakeholder Value by providing solutions to existing and emerging consumer needs in the Household & Personal Care business”. The company has wide market coverage and by the means of acquisition the company is building a presence in different countries. One in three households in India uses a Godrej product every day. Kinky is among one of the largest brand into hair segment with product portfolio includes dry hair. For Private Circulation Only 12 Hem Institutional Research Desk . the Joint Venture which owns the ‘Snuggy’ brand of baby diapers will become a 100 per cent subsidiary of GCPL. Godrej buys back equities The Company has bought back 23. The company launches some new products that include Godrej Expert Powder and Liquid hair colors. hair braids. The company is presently exporting there products to 30 different countries.57 Crores with a CAGR in double digits over past many years. After the transaction.www. oil free shampoo. wigs and wefted pieces.

52 Crores last year. now as the raw materials process are down. There is a decrease in Net profit in mainly on account of increase in raw material prices. Outlook The Company is one of the largest FMCG player and market leader in hair colour category and Liquid Detergent category.hemonline.57 Crores to register a jump of ~16 per cent compare to INR 951. The company launched some new products in Liquid hair colors and Godrej Ezee.23 Crores grew by ~11 per cent from INR 144. Where as the profit after taxes were at INR 159. Although the company is market leader for Hair Colour and Liquid Detergent. The Net Profit registered for the quarter was INR 34. the company will be able to maintain the margins.80 per cent over the last three years.11 per cent across the last three years where as the profit after taxes has registered a CARG of 20.102. Total Income reported by the company for the quarter was INR 346.com Key Financial Result for the Financial Year Ending Mar’ 08 The company reported sales of INR 1. The company is come international acquisitions. The company has entered into several new categories during the year and expects to add significant value to the company.www.73 Crores as compare to INR 37. The company registered a decrease in profit.03 Crores last year The Company sale has registered a CAGR of 25. mainly on account of high raw material prices. Godrej Q2 (Sep’ 08) Revenue Soars by 26 per cent to 346 Crores The Company continues to impress on sales growth with one more quarter of more than 26 per cent growth. the company always does some product innovative.02 Crores QOQ basis. For both the segment the company is a market leader. Godrej enjoys a market share of ~35 per cent in Hair Colour and ~80 per cent in Liquid Detergent.06 Crores QOQ basis.46 Crores as compare to INR 274. For Private Circulation Only 13 Hem Institutional Research Desk .

Hindustan Unilever Ltd (Ayush) and Marico (Kaya Skin) have presence in Health and Beauty Retail segment. The Company has opened 7 H&B stores and has plan to setup 160 stores by 2010. The mission that inspires Dabur’s over 3500 employees is to “Dedicated to the Health and well being of every household”. for Rs 203.900 Crores malted food drink market over the next two years. Personal care and Food products.7 Crores in an all-cash deal.com Dabur India Limited (Dabur) Company Outlook Positive Company Description Dabur India Limited is the fourth largest FMCG Company in India with interests in Health care. Crude prices have dropped drastically over the last quarter. For Private Circulation Only 14 Hem Institutional Research Desk . Dabur is a market leader for Dabur Chyawanprash and packaged juice . Dabur posses Strong capabilities which are reflected by Strong R&D infrastructure. Acquisition of Fem Dabur has acquired 72. a leading player in the women’s skin care products market. detergents and packing material. The company also expects to see a significant correction in packaging costs. Dabur has build on a legacy of quality and experience for over 120 years.15 per cent of Fem Care Pharma Ltd (FCPL). driving a sharp decrease in cost of key inputs for soaps.5 million retailers. The Company is expected to create synergy by this deal. today Dabur has powerful brands like Dabur Amla. According to the company.hemonline. 14 manufacturing units and wide distribution network which covers 2. Vatika. Hajmola and Real. Margins scenario to increase We expected to see an increase in margins of FMCG Company. Dabur Chyawanprash.www. The company is taking different steps to reduce it packaging cost which currently consist ~17 per cent of the total cost for the company. Dabur to set up new medicine manufacturing in Himachal Pradesh Dabur got approval from Government of Himachal Pradesh to set up another medicine manufacturing unit. The company has entered into Health and Beauty Retail segment which is an emerging retail category in India. they expect to capture a market share of 10 per cent of the INR 1. The recent fall in commodity prices are primary reason for the margin scenario to turn around. The Company never limits itself to power branded product but believes to strength in other business opportunities by growing in niche segments.Real & Active. The project has an expected investment of INR 130 Crores. Major Recent News Dabur foray into health drink Dabur has entered into the malted food drink market with the launch of a new health drink “Dabur Chyawan Junior”.

396. Dabur Q2 (Sep’ 08) Net Profit Soars by 18 per cent to INR 107 Crores Dabur took aggressive cost management initiatives coupled with a judicious pricing strategy and continued strong performance in key categories helped Dabur to mitigate the impact of steep cost inflation and the company announced an increase in EBITDA margin by 52 bps. The company has registered a continuous and high growth rate. Outlook The company is well known for ayurvedic brand which have existence of over 120 years.com Key Financial Result for the Financial Year Ending Mar’ 08 Dabur has achieved a turnover of INR 2. The company has continuously registered a robust growth rate. The Company net profit for the quarter stood at INR 106. We expect the company to continue the growth. Dabur is not leaving any stone un-green.76 per cent over the last three years. Over the last five years.90 compare to INR 281. up from INR 90. Recently company foray into health drink and expect to capture 10 per cent market share in next two years.3 Crores last year to register a growth rate of ~15 per cent and Profit after Tax of INR 332. There is growth in Profit margin also. Recently the company has entered into Health and Beauty Retail segment.7 Crores last year to registered a growth rate of ~18 per cent.www.30 Crores compare to INR 2080. The acquisition with Fem will add synergy to the company and will help the company to capture market in women’s products too. The major product of the company is Dabur Chyawanprash and packaged juice. Dabur is able to maintain is margin.15 per cent across the last three years where as the profit after taxes has registered a CARG 28. For Private Circulation Only 15 Hem Institutional Research Desk . the company has reported compound annual growth rates of 18 per cent in Net Revenues and 33 per cent in Profit after Tax.55 Crores (QOQ).hemonline. The Company has acquired 72.96 Crores. By this acquisition the company got an entrance into women’s skin care product.15 per cent stank in Fem. The Company sale has registered a CAGR of 19.

41 Crores is not comparable to PAT of INR 89. PAT is up by 23 per cent primarily reflecting savings from Baddi tax-free zone. For Private Circulation Only 16 Hem Institutional Research Desk . Russia. Major Recent News New product categories to enter Indian Market The Company has 21 product categories out of which only 8 product have presence in India. The philosophy that inspires P&G’s employee is to “Touching Lives. However.www. PBT.41 Crores. value-added products to meet the needs of consumers.60 Crores compare to last year INR 145. Improving Life” and every year the company had tried and gone a little further in their effort to advance more and more lives for the betterment. With a turnover of INR 643. your Company delivered a Profit after Tax (PAT) of INR 131. The PAT of last year includes adjustment for the impact of provisions of taxes for prior years and for pre-operational expenses on setting up of plants at Baddi.8 Crores last year. PAT at INR 131. Profit before Tax (PBT) for the year ending June has reported an increase by 24 per cent at INR 180. the Company has carved a reputation for delivering high quality. During the year under review. Hence. Even after including the expenses on the above mention exceptional items. In Health care the company was rated as “India’s Most Trusted Brand” by the Advertising & Marketing Magazine and continues to be among the top of the charts of Brand-Equity surveys. P&G plans to set up 20 new factories The company has an aggressive plan to set up 20 new factories across the World out of which 19 is expected to come in emerging markets and most of them would be seen in Brazil. However. when compared with last year’s PBT excluding these exceptional expenses.00 Crores. where the Company has set up a health care plant. P&G Whisper makes a record Whisper which is one of the company’s power brands has recorded 50 per cent market share in urban India. the PBT of the last year included one-time preoperational expenses on setting up of the Plant. The company expects to see a growth in other categories.com Procter & Gamble Hygiene & Health Care Limited (P&G) Company Outlook Neutral Company Description Procter & Gamble Hygiene & Health Care Limited (P&G) is one of Fast Moving Consumer Goods (FMCG) Company having a portfolio of a Billion dollar brands such as Vicks & Whisper. India.50 Crores. The company is planning to launch the rest 13 product in India. grew by 17 per cent. The company has presence in Feminine care and Health care. and China (BRIC) nations.hemonline.

Russia. The company have good growth prospect in Indian market. The company has a little market share in Indian market.10 Crores in the corresponding period last year registering a growth rate of ~21 per cent. The company is planning to launch the rest 13 product from a bouquet of 21 products.7 Crores last year where as the Feminine Care sales of INR 340 Crores reflected a record jump of 21 per cent compare to INR 282. The company has a huge development plans in India. The company has a good presence in international market. The sales for Health Care category reported to INR 312. The company is planning to come up with 20 new plants out of which mainly will be in emerging markets and most of them would be in Brazil. Currently the Company is taking several steps to capture Indian market where the company has a small market share in terms of revenue.0 Crores last year. and China (BRIC) nations.www. India.66 per cent across the last five years where as the profit after taxes has registered a CARG 9.8 Crores last year.hemonline. The Company sale has registered a CAGR of 4.com Key Financial Result for the Financial Year Ending June’ 08 Building on the robust performance of last year. For the year ended 2007. Outlook The company was having presence mainly into women products before P&G acquire Gillette. The company is planning to launch 13 products in India.87 per cent over the last five years.3 Crores reflected a record jump of 16 per cent compare to INR 268. both Health Care and Feminine Care business continued to deliver very healthy growth. PAT at INR 131. Procter & Gamble announces Q1 (Sep’ 08) Results Company’s sales grew to INR 188. This year. Profit before Taxes (PBT) grew by ~23 per cent where as Profit after taxes (PAT) grew by ~43 per cent compared to the corresponding quarter of last year. the company PAT has dropped significantly but the company has managed to retain in the year 2008.30 Crores from INR 155.41 Crores grew by 46 per cent from INR 89. This was a step by P&G took the step towards getting into men products. For Private Circulation Only 17 Hem Institutional Research Desk .

hemonline.05 Crores last year. Nirma gave a tough competition to HUL.73 Crores against INR 109. The decrease in the profit was mainly due to high raw materials prices and other expenses.78 Crores against INR 2541. Nirma has a strategy of self sufficiency by way of backward integration to facilitate the control over the cost of key products and key raw materials such as Soda Ash and LAB. Nirma marketed its product by two networks.32 per cent to INR 2650. For Private Circulation Only 18 Hem Institutional Research Desk .88 per cent to INR 1.79 Crores in the same quarter last year. During the quarter. Outlook There is growth rate in top line of the company but the company is losing the market share. speedy market intelligence. competitive edge and better focus.12 Crores last year. which find application in the production of detergents.www. the profit of the company declined by 97. Where as net profit has registered a growth of mare than 100 per cent. when the available cheapest brand in the market was INR 13 per kg. Nirma Limited announces Q2 (Sep’ 08) Results The Company announced a phenomenon drop in net profit for the quarter ended September 2008. The Net Profit for the year ended was INR 229.com Nirma Limited (Nirma) Company Outlook Neutral Company Description Nirma Limited (Nirma) is one of the largest players of Indian household product. Where as the other network comprises of more than 2000 distributors and posses wider reach. HUL has become the market leader in Household care. The company launched detergent powder at priced INR 3 per kg. It is among some of the brands which have created a wave in the Indian market and has been labeled as ‘Marketing Miracle’ of an era. Key Financial Result for the Financial Year Ending Mar’ 08 The gross sales of the company registered a growth rate by 4. fastest & flexible in distributing FMCG distribution channels of the country.71 Crores from INR 80. One which consists of about 450 exclusive distributors and is one of the low cost.

com Emami Limited (Emami) Company Outlook Positive Company Description Emami Limited (Emami) is one of the know brands whose principal activities are to develop and manufacture personal. For Private Circulation Only 19 Hem Institutional Research Desk . Bangladesh.000 retail outlets across the country. Gulf countries. Nepal. Some of the company power brands like Boroplus Antiseptic Cream is the market leader with a ~70 per cent market share. The company is planning to transfer its stake in 100 per cent subsidiary Emami Realty to other group companies. The facility is anticipated to commence operations by 2010. The company started with a vision of making people healthy and beautiful naturally. Emami plans to set up a manufacturing facility in Africa The company is planning to set up a new manufacturing facility in Africa with an investment of INR 90 Crores.hemonline. Russia. Company’s other power brands also plays an important part and hold a good market share. a subsidiary of Zandu Pharmaceuticals. because there are limited growth prospects and chemicals in not the core business of Emami. The company has plants located in Kolkata. The Company accounts for ~22 per cent share of personal care of the country’s FMCG market. Europe. Emami Realty with its joint venture partners undertook 31 projects. Pakistan.www.700 distributors which have a direct coverage of 4. Pondicherry and a new plant in Guwahati.00. natural extracts and essential oils. The company entered into Realty business in May 2007. The company share swap ratio would be worked out so that Emami Realty's stake is fairly distributed among other group companies. Africa and the Middle East. The company has a network which consist of 2. The company’s portfolio consists of 20 products made from herbs. The products are sold across India and in countries like Holland. Recently the company called off its earlier decision to quit the realty business. Sri Lanka. The company has reversed its earlier decision to quit the property business. Major Recent News Emami may hive off Zandu Chemical The company has recently bought Zandu Pharmaceuticals for ~INR 700 Crores is evaluating the possibility to hiving off Zandu Chemicals. beauty and health care products through an effective leverage of Ayurveda. Emami plans to transfer holding of realty arm to group companies The company has decided to stay rooted in the real estate business and transfer its stake in 100 per cent subsidiary Emami Realty to other group companies. Navratna Oil is also a market leader with more than 50 per cent market share.

50 Crores for the last year to report a growth rate of ~18 per cent where as profit after taxes amount to INR 12.92 Crores.80 Crores whereas the profit after taxes were INR 92. Outlook The company is one of the know brands whose principal activities are to develop and manufacture personal. Emami is one of the best names for Ayurvedic products. the company has undertaken 31 projects with Emami Realty. The company reported a net sales of INR 583.www.05 Crores as compare to INR 10. The company has plans to get into different industries. In 2007. The company has acquired stake in Zandu Pharmaceuticals.71 Crores registered a growth rate of ~13 per cent over the last year which was INR 515.56 Crores for the last year. 100 per cent subsidiary. The Company sale has registered a CAGR of 24.81 per cent over the last three years. For Private Circulation Only 20 Hem Institutional Research Desk .hemonline.09 Crores as compare to INR 103. beauty and health care products through an effective leverage of Ayurveda.56 per cent across the last three years where as the profit after taxes has registered a CARG 45. Profit after taxes growth rate was ~14 per cent which was lower as compare to the growth rate of sales. Recently the company has entered into Realty business.com Key Financial Result for the Financial Year Ending Mar’ 08 The company performance improved significantly in 2007-08. Emami Limited announces Q2 (Sep’ 08) Results The Company has registered sales of INR 122.75 Crores to registered a growth rate of ~41 per cent over the last year which stood at INR 65. with its joint venture partners. The profit margin decreases due to rise in raw material prices.

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