Declaration

I, Vikas Patel, hereby declare that the project titled “General Training at Concept Investwell Private
Limited”. The information has been collected from genuine & authentic sources. Work presented
herein is genuine work done originally by me and has not been published elsewhere.
 Acknowledgement
It is well-established fact that behind every achievement lays an unfathomable sea of gratitude to
those who have extended their support and without whom the project would never have come into
existence.

I am greatly thankful to “Department of Business and Industrial Management” for providing us this
golden opportunity to make a general project on “Concept Investwell Private Limited”.

I wish to express my sincere thanks to Dr. Vatsal Patel, Professor, Department of Business and
Industrial Management. I wish to express my heartfelt gratitude toward him whose constant help and
support at all the stages of this project has enabled me to complete this project.

I feel pleasure in expressing my deep heartily and profound sense of gratitude to honorable my
company guide Mr. Jenish Rana. The goal of new idea and development can only be obtained by
hardworking; it is the only key to success. One to achieve success, the best way is suggestions and
guidance provided by one’s mention.

I would like to thanks Veer Narmad South Gujarat University and it whole family of facilitates and
other people for accepting me and letting me study the course and curriculum of MBA and thereby
helping me to carry out the general project for gaining practical and meaningful knowledge.
 Executive Summary
Concept Securities is an investment services company. They are offering complete range of
investment services covering Equity, Debt, Mutual Fund, Portfolio Management, Equity Derivatives,
Currency Derivatives, Commodity Derivatives, Depository and Life Insurance for Indian Capital
Market.

They have memberships of BSE, NSE, MCX, MCX-SX and DP of CDSL. They are SEBI registered
Portfolio Manager. They represent all Mutual Fund AMC. They have been offering their investment
services since 25 years.

This is an internship report titled at “GENERAL TRAINING AT CONCEPT INVESTWELL

PRIVATE LIMITED”. The main aim of this report is to have an adequate knowledge of product and
services of capital market.

I was allotted as a summer trainee in Marketing Department. It also makes the reader aware about
the technique and methodology used to bring this report alive.

It gives information to the reader about Concept Investwell Private Limited. Further the report tells
about the profile of the company. It provides knowledge to the readers regarding the company’s
history, mission, vision, customer base and the reason to be associated with this company. It also
gives the overview of the company's products and services.

In the broking firm the client and the client data base are the asset of the company, the management
of such an asset is very important. The client database keeps on growing if it is well managed, on
addition of new client they should not compromise the service of the old client.

Further in this report readers will get to know about fundamentals of Hindustan Unilever Limited.
Table of Contents
1. Introduction ........................................................................................................................................ 1
1.1. Indian capital market regulatory framework ............................................................................. 3
1.2. Bombay Stock Exchange (BSE)................................................................................................... 4
1.3. National Stock Exchange (NSE) .................................................................................................. 6
1.4. Capital Market Instruments: ...................................................................................................... 7
1.5. Methods of Raising Capital in Primary Market ......................................................................... 8
1.6. STOCK MARKET INDEX ......................................................................................................... 9
1.6.1.TYPES OF INSTRUMENT TREATED IN THE DEBT MARKET ................................ 10
1.7. Depositories ................................................................................................................................ 11
1.7.1.Functions depositories perform in India ........................................................................... 11
1.7.2.Services offered by depositories ......................................................................................... 12
1.7.3.Central Depository Services Limited ................................................................................. 12
1.7.4.National Securities Depository Limited ............................................................................. 13
2. Concept Investwell Private Limited ................................................................................................. 16
2.1. Vision ......................................................................................................................................... 17
2.2. Mission ....................................................................................................................................... 17
2.3. Objective .................................................................................................................................... 17
2.4. Services Offered ......................................................................................................................... 18
2.5. Marketing Department .............................................................................................................. 31
2.6. Demat Department .................................................................................................................... 34
2.7. Research Department ................................................................................................................ 39
3. Research Methodology ...................................................................................................................... 44
4. Fundamental Analysis ....................................................................................................................... 47
4.1. Economic Analysis ..................................................................................................................... 47
4.2. Industry Analysis ....................................................................................................................... 49
4.2.1.Porter’s Five Forces Model ................................................................................................ 49
4.3. Company Analysis ..................................................................................................................... 53
4.3.1.History ................................................................................................................................ 53
4.3.2.Brands ................................................................................................................................ 57
4.3.3.Segmental Performance ..................................................................................................... 60
4.3.4.Home Care.......................................................................................................................... 61
4.3.5.Beauty & Personal Care..................................................................................................... 62
4.3.6.Foods & Refreshments ....................................................................................................... 64
4.4. Balance Sheets............................................................................................................................ 65
4.4.1.Balance Sheet As at 31st March 2019 ................................................................................. 65
4.4.2.Ratio Analysis (2019) ......................................................................................................... 67
4.4.3.Balance sheet as at 31st march 2018 ................................................................................... 72
 4.4.4.Ratio Analysis (2018) ......................................................................................................... 74
4.4.5.Balance Sheet As at 31st march 2017 ................................................................................. 75
4.4.6.Ratio Analysis (2017) ......................................................................................................... 77
4.4.7.Balance Sheet as at 31st march 2016 .................................................................................. 78
4.4.8.Ratio Analysis (2016) ......................................................................................................... 80
4.4.9.Balance Sheet as at 31st march 2015 .................................................................................. 81
4.4.10. ....................................................................................................................................
Ratio Analysis (2015) ......................................................................................................... 83
5. Data Analysis ..................................................................................................................................... 84
Introduction
Introduction

Indian capital markets have been receiving global attention, especially from sound
investors, due to the improving macroeconomic fundamentals. The presence of a great pool of skilled
labour and the rapid integration with the world economy increased India’s global competitiveness.
No wonder, the global ratings agencies Moody’s and Fitch have awarded India with investment grade
ratings, indicating comparatively lower sovereign risks. The Securities and Exchange Board of India
(SEBI), the regulatory authority for Indian securities market, was established in 1992 to protect
investors and improve the microstructure of capital markets. In the same year, Controller of Capital
Issues (CCI) was abolished, removing its administrative controls over the pricing of new equity
issues. In less than a decade later, the Indian financial markets acknowledged the use of technology
(National Stock Exchange started online trading in 2000), increasing the trading volumes by many
folds and leading to the emergence of new financial instruments. With this, market activity
experienced a sharp surge and rapid progress was made in further strengthening and streamlining risk
management, market regulation, and supervision. The securities market is divided into two
interdependent segments:

The primary market provides the channel for creation of funds through issuance of new
securities by companies, governments, or public institutions. In the case of new stock issue, the sale
is known as Initial Public Offering (IPO).

The secondary market is the financial market where previously issued securities and financial
instruments such as stocks, bonds, options, and futures are traded.

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Page | 2
Indian capital market regulatory framework

SEBI:

Securities and Exchange Board of India (SEBI) was set up as an administrative arrangement
in 1988.In 1992, the SEBI Act was enacted, which gave statutory status to SEBI. It mandates SEBI
to perform a dual function: investor protection through regulation of the securities market and
fostering the development of this market. SEBI has been vested most of the functions and powers
under the Securities Contract Regulation (SCR) Act, which brought stock exchanges, their members,
as well as contracts in securities which could be traded under the regulations of the Ministry of
Finance. It has also been delegated certain powers under the Companies Act. In addition to registering
and regulating intermediaries, service providers, mutual funds, collective investment schemes,
venture capital funds and takeovers, SEBI is also vested with the power to issue directives to any
person(s) related to the securities market or to companies in areas of issue of capital, transfer of
securities and disclosures. It also has powers to inspect books and records, suspend registered entities
and cancel registration.

RBI:

Reserve Bank of India (RBI) has regulatory involvement in the capital market, but this has
been limited to debt management through primary dealers, foreign exchange control and liquidity
support to market participants. It is RBI and not SEBI that regulates primary dealers in the
Government securities market. RBI instituted the primary dealership of Government securities in
March 1998. Securities transactions that involve foreign exchange transactions need the permission
of RBI.

Stock Exchanges:

SEBI issued directives that require that half the members of the governing boards of the stock
exchanges should be non-broker public representatives and include a SEBI nominee. To avoid
conflicts of interest, stock brokers are a minority in the committees of stock exchanges set up to
handle matters of discipline, default and investor-broker disputes. The exchanges are required to
appoint a professional, non-member executive director who is accountable to SEBI for the
implementation of its directives on the regulation of stock exchanges. SEBI has introduced a
mechanism to redress investor grievances against brokers. Further, all issues are regulated through a
series of disclosure norms as prescribed by SEBI and respective stock exchanges through their listing
agreement. After a security is issued to the public and subsequently listed on a stock exchange, the
issuing company is required under the listing agreement to continue to disclose in a timely manner

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to the exchange, to the holders of the listed securities and to the public any information necessary to
enable the holders of the listed securities to appraise its position and to avoid the establishment of a
false market in such listed securities.

The powers and functions of regulatory authorities for the securities market seem to be diverse in
nature. SEBI is the primary body responsible for regulation of the securities market, deriving its
powers of registration and enforcement from the SEBI Act. There was an existing regulatory
framework for the securities market provided by the Securities Contract Regulation (SCR) Act and
the Companies Act, administered by the Ministry of Finance and the Department of Company Affairs
(DCA) under the Ministry of Law, respectively. SEBI has been delegated most of the functions and
powers under the SCR Act and shares the rest with the Ministry of Finance. It has also been delegated
certain powers under the Companies Act. RBI also has regulatory involvement in the capital markets
regarding foreign exchange control, liquidity support to market participants and debt management
through primary dealers. It is RBI and not SEBI that regulates primary dealers in the Government
securities market. However, securities transactions that involve a foreign exchange transaction need
the permission of RBI. So far, fragmentation of the regulatory authorities has not been a major
obstacle to effective regulation of the securities market. Rather, lack of enforcement capacity by SEBI
has been a more significant cause of poor regulation. But since the Indian stock markets are rapidly
being integrated, the authorities may follow the global trend of consolidation of regulatory authorities
or better coordination among them.

Bombay Stock Exchange (BSE)

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 Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's first
& the Fastest Stock Exchange in world with the speed of 6 micro seconds and one of India's leading
exchange groups. Over the past 143 years, BSE has facilitated the growth of the Indian corporate
sector by providing it an efficient capital-raising platform. Popularly known as BSE, the bourse was
established as ‘The Native Share & Stock Brokers' Association’ in 1875. In 2017 BSE become the
1st listed stock exchange of India.

Today BSE provides an efficient and transparent market for trading in equity, currencies, debt
instruments, derivatives, mutual funds. BSE SME is India’s largest SME platform which has listed
over 250 companies and continues to grow at a steady pace. BSE StAR MF is India’s largest online
mutual fund platform which process over 27 lakh transactions per month and adds almost 2 lakh new
SIPs ever month. BSE Bond, the transparent and efficient electronic book mechanism process for
private placement of debt securities, is the market leader with more than Rs 2.09 lakh crore of fund
raising from 530 issuances. (F.Y. 2017-2018).

Keeping in line with the vision of Shri Narendra Modi, Hon’be Prime Minister of Inida, BSE
has launched India INX, India's 1st international exchange, located at GIFT CITY IFSC in
Ahmedabad.

Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central
counterparty to all trades executed on the BSE trading platform and provides full novation,
guaranteeing the settlement of all bonafide trades executed.

BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected
capital market educational institutes in the country.

BSE has also launched BSE Sammaan, the CSR exchange, is a 1st of its kind initiative which
aims to connect corporate with verified NGOs

BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock
market benchmark index. It is traded internationally on the EUREX as well as leading exchanges of
the BRCS nations (Brazil, Russia, China and South Africa)

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National Stock Exchange (NSE)

The National Stock Exchange of India Ltd. (NSE) is the leading stock exchange in India and
the second largest in the world by nos. of trades in equity shares from January to June 2018, according
to World Federation of Exchanges (WFE) report.

NSE launched electronic screen-based trading in 1994, derivatives trading (in the form of
index futures) and internet trading in 2000, which were each the first of its kind in India.

NSE has a fully-integrated business model comprising our exchange listings, trading services,
clearing and settlement services, indices, market data feeds, technology solutions and financial
education offerings. NSE also oversees compliance by trading and clearing members and listed
companies with the rules and regulations of the exchange.

NSE is a pioneer in technology and ensures the reliability and performance of its systems
through a culture of innovation and investment in technology. NSE believes that the scale and breadth
of its products and services, sustained leadership positions across multiple asset classes in India and
globally enable it to be highly reactive to market demands and changes and deliver innovation in both
trading and non-trading businesses to provide high-quality data and services to market participants
and clients.

Mr. Vikram Limaye is the Managing Director and CEO of NSE.

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Capital Market Instruments:

A security, in a financial context, is a certificate or other financial instrument that has

monetary value and can be traded. Ownership securities are the instruments or insiders funds in which
an investor has full control and influence over operating decisions of the company. One who
purchases the ownership securities has various rights to take decisions of the company affairs.

On the other hand, creditor ship securities are those instruments or outsiders funds in which an
investor does not have the control and influence over the decisions of the company.

A joint stock company divides its capital into units of equal denomination. Each unit is called a share.
These units i.e. shares are offered for sale to raise capital. This is termed as issuing shares. A person
who buys share/ shares of the company is called a shareholder and by acquiring share or shares in the
company he/she becomes one of the owners of the company Thus, a share is an indivisible unit of
capital. It expresses the proprietary relationship between the company and the shareholder. The
denominated value of a share is its face value. The total capital of a company is divided into number
of shares. Kinds of shares According to the Companies Act, a company can issue the following types
of Shares: (i) Preference shares (ii) Equity shares

Preference shares

A preference share is one which carries following preferential rights over other type of shares
called equity shares in regard to the following:

l Payment of dividend

2 Repayment of capital at the time of winding up of the company.

Equity shares

All shares which are not preference shares are equity shares. Holders of these shares receive
dividend out of the profits of the company after the payment of dividend has been made to the
preference shareholders. Equity shareholders have the right to elect directors of the company. Equity
shares are the permanent source of capital.

Debenture

Debenture is an instrument of debt owed by a company. As an acknowledgement of debt,

such instruments are issued under the seal of a company and duly signed by authorized signatory.

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The debenture instrument specifies nominal/par value, the rate of interest, periodicity of payment,
the tenure of the debentures and terms of redemption.

Bond

Bond is similar to that of debenture, both in terms of contents and texture. Traditionally, bonds
had been issued by the government, but these days bonds are also being issued by semi-government
and non-government organizations as an acknowledgment of debt. The significant difference
between bonds and debentures is with respect to the issue condition, i.e., bonds can be issued without
predetermined rate of interest as is in case of deep discount bonds. A deep discount bond is issued
without prefixed rate of interest which is implicitly in-built in the terms of payment.

A capital market is a market for securities (debt or equity), where business enterprises and
government can raise long-term funds. It is defined as a market in which money is provided for
periods longer than a year, as the raising of short-term funds takes place on other markets (e.g., the
money market). The capital market is characterized by a large variety of financial instruments: equity
and preference shares, fully convertible debentures (FCDs), non-convertible debentures (NCDs) and
partly convertible debentures (PCDs) currently dominate the capital market, however new
instruments are being introduced such as debentures bundled with warrants, participating preference
shares, zero-coupon bonds, secured premium notes, etc.

Methods of Raising Capital in Primary Market

1. Public Issue

Here prospectus is issued, and a public appeal is made to subscribe the new shares / debentures
issued by the company. Shares are allocated in response to application received. Some companies
sell shares directly to the public while some take help of share brokers. The company appoints an
advertising agency to advertise about the issue of shares.

2. Rights Issue

Rights issue means new shares are offered to the existing shareholders on the pro-rata basis.
When company wants to raise additional capital, securities are first offered to the existing
shareholders. If the shareholders do not want to buy shares, then the company can sell the shares to
the outside public.

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3. Private Placement

Private Placement of shares means the company sells its shares to a small group of investors.
It can sell to banks, insurance companies, financial institutions, etc. It is an economical and quick
method of selling securities. The company does not sell its shares to the public.

STOCK MARKET INDEX

A stock index or stock market index is a measurement of the value of a section of the stock
market. It is computed from the prices of selected stocks (typically a weighted average). It is a tool
used by investors and financial managers to describe the market, and to compare the return on specific
investments. Stock market index is a method of measuring a section of the stock market. Many indices
are cited by news or financial services firms and are used as benchmarks, to measure the performance
of portfolios such as mutual funds. Alternatively, an index may also be considered as an instrument
(after all it can be traded) which derives its value from other instruments or indices. The index maybe
weighted to reflect the market capitalization of its components, or may be a simple index which
merely represents the net change in the prices of the underlying instruments. Most publicly quoted
stock market indices are weighted. Stock market indices are useful in understanding the level of
prices and the trend of price movements of the market. A stock market index is created by selecting
a group of stocks that are capable of representing the whole market or a specified sector or segment
of the market. The change in the prices of this basket of securities is measured with reference to a
base period. There is usually a provision for giving proper weights to different stocks on the basis of
their importance in the economy. A stock market index act as the indicator of the performance of the
economy or a sector of the economy.

There are various indexes of stocks but in India we have only two.

• NIFTY 50
• SENSEX

Nifty is the index of National stock Exchange operating 50 stocks of the companies in India. Nifty
50 checks the price fluctuations based on weighted average on daily basis.

Whereas Sensex is the index of Bombay Stock Exchange operating 30 stocks of the companies
in India. Sensex also applies the same method.

Market capitalization is the total worth of all outstanding (issued) shares of a company. It
represents the total worth of a company. Market capitalization=No of shares outstanding x market

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price of share Free Float Market Capitalization Free float concept is an index construction
methodology which makes use of free float shares in the market. Free float market capitalization is
the total worth of all shares of a company which are available for trading in the open market. Theses
hares are called free float shares and are available for trading by anyone.

TYPES OF INSTRUMENT TREATED IN THE DEBT MARKET

Corporate debenture
A Debenture is a debt security issued by a company, which offers to pay interest in lieu of the
money borrowed for a certain period. In essence it represents a loan taken by the issuer who pays an
agreed rate of interest during the lifetime of the instrument and repays the principal normally, unless
otherwise agreed, on maturity. These are long-term debt instruments issued by private sector
companies, in denominations as low as ` 1000 and have maturities ranging between one and ten years.
Debentures enable investors to reap the dual benefits of adequate security and good returns. Unlike
other fixed income instruments such as Fixed Deposits, Bank Deposits, Debentures can be transferred
from one party to another. Debentures can be divided into different categories on the basis of
convertibility of the instrument and Security. The debentures issued on the basis of Security includes

• Non-Convertible Debentures (NCDs)

• Partly Convertible Debentures (PCDs)
• Fully convertible Debentures (FCDs)
• Optionally Convertible Debentures (OCDs)
• Secured Debentures
• Unsecured Debentures

FIXED INCOME PRODUCTS

Deposit:

Deposits serve as medium of saving and as a means of payment and are a very important
variable in the national economy. A bank basically has three types of deposits, i.e. time deposit,
savings deposit and current account.

Fixed Deposit:

Fixed Deposits are sums accepted by most of the NBFCs and banks. The amount of deposits
that may be raised by NBFCs is linked to its net worth and rating. However, the interest rate that may

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be offered by a NBFC is regulated. The deposits offered by NBFCs are not insured whereas the
deposits accepted by most banks are insured up to a maximum of `1,00,000.

INTEREST BASED BONDS

Coupon Bonds

Coupon Bonds typically pay interest periodically at the pre specified rate of interest. The
annual rate at which the interest is paid is known as the coupon rate or simply the coupon. Interest is
usually paid half-yearly though in some cases it may be monthly, quarterly, annually or at some other
periodicity. The dates on which the interest payments are made, are

known as the coupon due dates. Zero Coupon Bonds A plain bond is offered at its face value, earns
a stream of interest till redemption and is redeemed with or without a premium at maturity. A zero
coupon bond is issued at a discount to its face value, fetches no periodic interest and is redeemed at
the face value at maturity.

Depositories
Depositories are integral institutions in the Indian Capital Market and their functionality can
be compared to banking entities. Their role comes into play from the time an investor makes a
decision on investing. In India, there are two depositories namely National Securities Depository
Limited (NSDL) or Central Depository Services (India) Limited (CDSL) that are registered with
SEBI.

Functions depositories perform in India

• Both NSDL and CDSL, facilitate dematerialization of shares i.e. held the shares in electronic
form. So, in a way depository is held accountable for safe-keeping of your portfolio of
securities.
• On instruction of the account holder, depositories also facilitate transfer of securities from
one account to the other. So, transfer of ownership of securities is affected by depositories.
• With all the details concerning your personal details, scrips as well the number of units of
each scrip held by the individual, several corporate actions or transactions such as the issue
of bonus shares or annual dividend are executed via depositories acting as an important
intermediary in the entire process.
• So, the depository other than acting as a safe-keeper of your securities provides services
pertaining to the transaction in securities.

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Depositories provide investor services through Depository Participant

• The two depositories in India provide their services to large investor base through depository
participants.
• As per SEBI rules, banks, financial institutions as well as trading members registered with
SEBI are eligible to act as depository participants (DP).

Services offered by depositories

• Providing their services through depository participants, the depositories offer the major
service of dematerialization of shares. With dematerialization is eliminated the risk of false
or fake securities, bad delivery etc.
• Facilitates share transfer from one DP account to the other on an immediate basis without
levy of stamp duty. Nomination facility is made easy.
• Any change in address of correspondence that is registered with the DP automatically gets
registered with all the companies in which an individual hold share Facilitates holding of
different securities such as debt, equity or government securities in a single account.
• So, depositories hence provide a convenient and easy way of consolidation of accounts/folios.

Central Depository Services Limited

A Depository facilitates holding of securities in the electronic form and enables securities
transactions to be processed by book entry. The Depository Participant (DP), who as an agent of the
depository, offers depository services to investors. According to SEBI guidelines, financial
institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is
known as beneficial owner (BO) has to open a demat account through any DP for dematerialisation
of his holdings and transferring securities.

The balances in the investors account recorded and maintained with CDSL can be obtained through
the DP. The DP is required to provide the investor, at regular intervals, a statement of account which
gives the details of the securities holdings and transactions. The depository system has effectively
eliminated paper-based certificates which were prone to be fake, forged, counterfeit resulting in bad
deliveries. CDSL offers an efficient and instantaneous transfer of securities.

CDSL was initially promoted by BSE Ltd. which has thereafter divested its stake to leading banks as
"Sponsors" of CDSL.

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CDSL was set up with the objective of providing convenient, dependable and secure depository
services at affordable cost to all market participants. Some of the important milestones of CDSL
system are:

• CDSL received the certificate of commencement of business from SEBI in February, 1999.

• Honourable Union Finance Minister, Shri Yashwant Sinha flagged off the operations of
CDSL on July 15, 1999.

• Settlement of trades in the demat mode through BOI Shareholding Limited, the clearing house
of BSE Ltd., started in July 1999.

• All leading stock exchanges like the BSE Ltd, National Stock Exchange and Metropolitan
Stock Exchange of India have established connectivity with CDSL.

National Securities Depository Limited

NSDL, the first and largest depository in India, established in August 1996 and promoted by
institutions of national stature has established a state-of-the-art infrastructure that handles most of
the securities held and settled in dematerialized form in the Indian capital market. Although India
had a vibrant capital market which is more than a century old, the paper-based settlement of trades
caused substantial problems like bad delivery and delayed transfer of title, etc. The enactment of
Depositories Act in August 1996 paved the way for establishment of NSDL.

Using innovative and flexible technology systems, NSDL works to support the investors and
brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of
Indian marketplaces by developing settlement solutions that increase efficiency, minimize risk and
reduce costs. At NSDL, we play a central role in developing products and services that will continue
to nurture the growing needs of the financial services industry. In the depository system, securities
are held in depository accounts, which is more or less similar to holding funds in bank accounts.
Transfer of ownership of securities is done through simple account transfers. This method does away
with all the risks and hassles normally associated with paperwork. Consequently, the cost of
transacting in a depository environment is considerably lower as compared to transacting in
certificates.

NSDL provides bouquet of services to end investors, stock brokers, stock exchanges,
custodians, issuer companies etc. through its network of more than 276 Depository Participants /
Business Partners. NSDL has been able to win the trust of crores of investors and other intermediaries,
thus standing true to its tag line −Technology, Trust and Reach.

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Concept Investwell Private Limited
 Concept Investwell Private Limited

CONCEPT Investwell Private Limited is part of CONCEPT Group, which was established in
Year 1995 to serve for Investment and Capital Market related Services. CONCEPT Investwell Private
Limited has received its separate identity in year 2018 to focus on Non-Secondary Market Services
like Portfolio Management Services, Mutual Fund, Investment Advisory for all categories of clients
including NRIs. They have built Research team consist of CAs, CFAs, MBAs and Engineers lead by
Fund Manager having experience of more than 14 years, to provide quality research and focusing to
cater for efficient investment services.

CONCEPT group have considered one thing constantly – 'What investors look for, and how
can we deliver that the best’. They e are specialist in advising based on investor risk profile and
requirements for investment.

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Vision
To meet needs of Indian and Foreigners, Individual as well as Institutional Investors for their
Investment in Indian Capital Market.
Services for Investment be provided with the High Degree of Client Orientation, and finest
value addition.

Mission
• To build the finest investment services company with focus on,

o Fund Management

o Investment Advisory

o Comprehensive Services to Foreign Investors and NRIs.

• To build the finest fund management team, research team and business development team.

• To place the high calibre visionary leaders of Capital Market on Board of Advisors.

Objective

Value Creation is a new ‘Mantra’. It requires lot of value addition. Objective of the company
is to focus on Investors, understand them well, advise them properly and help them in creation of
wealth.

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 Services Offered

Online
Demat
Equities Mutual Fund investment
Account
Platform

Portfolio
Commodity
Management Derivatives Debt FD/Bond
Derivatives
Services

NRI
Financial Research
Investment
Planning Corner
services

Equities
Investment in stock market in undoubtedly one of the best routes for long-term wealth
generation. However, it can also be a very risky proposition due to high risk-return trade-off prevalent
in the stock market. Hence, it is more appropriate to take help of an experienced and trustworthy
expert who will guide you as to when, where and how to invest.

Concept provides guidance in the exciting world of stock market with suitable trading solutions and
value-added tools and services to enhance your trading experience.

Advisory
• Real-Time Market Information with News Updates
• Investment Advisory Services
• Dedicated Relationship Managers
• Portfolio Management Services

Offerings
• Online Trading - Easy online trading platform.
• Market Watch - Monitor price movement of your chosen Scripps.
• Buy/Sell - Fast Buy/Sell Facilities
• Quick View - View order book, trade book, net position
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 • Off market Trades - You can do Off Market transfer of equity shares
• Exchange Traded Funds - Transact in Gold, Nifty ETF, Hangseng ETF
• Dial & Trade - Telephone, the easiest medium to reach
• Depository Services - Hassle-free transfer of shares
• Online back office - your transactions & portfolio online
• Trading Calls - Trader can get calls in equities, Futures & Options.
• Monthly recommendations - They recommend various companies’ sector-wise; it is
backed by profound research.

Mutual Fund
A mutual fund is an entity that pools the money of many investors -- its unit-holders -- to
invest in different securities. Investments may be in shares, debt securities, money market securities
or a combination of these. Those securities are professionally managed on behalf of the unit-holders,
and each investor holds a pro-rata share of the portfolio i.e. entitled to any profits when the securities
are sold, but subject to any losses in value as well.

Based on your goals and your investment horizon, Mutual Funds give you the option to invest
your money across various asset classes like equity, debt and gold. This allows you to diversify your
investments and strive to reduce your portfolio risk.

Types of Mutual Funds

➢ Types of Mutual Funds Based on Asset Class

• Equity Funds

These funds are invested in equity stock or shares of the companies. They provide a
higher result, that’s the reason they are considered as high-risk funds.

• Debt Funds

These funds are invested in the debt like government bonds, company debentures, and
fixed income assets. As they provide fixed returns, they are known to be a safe investment
instrument.

• Hybrid or Balanced Funds

These types of funds are invested in different asset classes. There are times when the
proportion of debt is lower than equity; it could be another way around as well. In this manner,
return(s) and risk(s) strikes a perfect balance.

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Benefits of mutual funds

• Professional Management

Mutual fund professionals manage your hard-earned money with their skills and
experience. They have a qualified research team that assists them by analyzing the
performance and potential of various corporations. In addition to that, they find suitable
investment offers for their clients. Fund managers are qualified to manage your funds in such
a manner that they yield higher returns on investment(s). Professional management is a
continuous process and it takes much time to add value to your investment(s).

• Diversification

Diversification makes your investment an intelligent investment. It minimizes the risk

by investing your money in different mutual fund investment vehicles. Obviously, chances
are very slim that all the stocks will decline simultaneously. Sector funds let your investment
spread across a solo industry so that there is less diversification.

• More Choices

The biggest advantage of investing in a mutual fund is that it offers a wide range of
schemes that match with your long-term expectations. Whenever a new phase begins in your
life, you just need to have a discussion with your financial advisor(s) and work on your
portfolio to suit your present situation.

• Affordability

At times, your investment goal or your capital doesn’t let you invest in the shares of a
big company. Generally, mutual funds deal with buying and selling of securities in a large
amount that allows investors to get the advantage for a low trading course. Thanks to the
minimum fund requirement, even the smallest investor can give mutual funds a shot.

• Tax Deductions

You get tax benefits if you invest for a period of one year or more in capital gains.
Mutual fund investments also make you eligible for the benefits of the tax deduction.

• Liquidity

Open-end funds make you eligible to redeem total or partial investment anytime you
want to, and you can receive the present value for your shares. Funds give you more liquidity
as compared most of the investments in the shares, bonds, and deposits. This follows a

Page | 20
 standardized process and it makes the process efficient and smooth. Because of that, you get
your money as soon as possible.

• Averaging Rupee-Cost

Irrespective of the investments’ unit price, you make an investment in a particular

rupee amount at frequent intervals with averaging rupee-cost. Resulting, you are able to buy
more units when the prices are less; fewer units when the prices are high. Averaging rupee-
cost enables you to maintain your investment discipline by frequent investments. It also
prevents you from making any unpredictable investment.

• Ensures Transparency

Various esteemed publications and rating agencies review the performance of mutual
funds, which makes it easier for investors to compare one fund to another. It is beneficial for
you as a shareholder, as it provides you with latest updates, including funds’ holdings,
managers’ strategy etc.

• Regulations

As per the regulations by The Securities and Exchange Board of India (SEBI), all the
mutual fund corporations are required to register with SEBI, as they are obliged to adhere to
the strict regulations formulated to safeguard investors. The overall trading operations are
monitored by the SEBI on a regular basis.

Demat Account

Avail the twofold benefits of Trading and Depository services under one single umbrella and
experience Efficient, Risk-Free and Prompt Depository.

Concept is registered as a Depository Participant with CDSL. We are also a member of the
Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and the leading Commodity
Exchange in the country–MCX.

➢ Dependability
• Convenient to Investor:
The entire database of investors is stored centrally at CDSL. If there is any system-
related issues at DPs end, the investor is not affected, as the entire data is available at
CDSL.

Page | 21
 • Contingency Arrangements:
CDSL has made provisions for contingency terminals, which enables a DP to update
transactions, in case of any system related problems at the DP's office.
o Computer Systems: All data held at CDSL is automatically mirrored at the
Disaster Recovery site and is also backed up and stored in fireproof cabinets at the
main and disaster recovery site.
o Claims on DP: If any DP of CDSL goes into liquidation, the creditors of the DP
will have no access to the holdings of the BO.
o Insurance Cover: CDSL has an insurance cover in the unlikely event of loss to a
Investors due to the negligence of CDSL or its DPs.
➢ Benefits
• No risk of loss, wrong transfer, mutilation or theft of share certificates
• Hassle free automated pay-in of your sell obligation with no need for physical instruction
• Reduced paper work
• Speedy settlement process resulting in increased liquidity of your securities
• Instant disbursement of non-cash benefits like Bonus and Rights
• Efficient pledge mechanism
• No charges for extra Transaction statement and Holding statement
• Combined monthly 'Bill-cum-Transaction-cum-Holding-cum-Ledger' statement of your
investments

Online Investment Platform

This platform offers a variety of investment products to suit your trading and investing goals.
Through Concept Trade Plus, Trade/Invest online through BSE, NSE, FNO segments and make your
trading experience faster & easier.

➢ Features of Concept Trade Plus

• Live Rates update - Get Real time updates on your screen
• Trade from anywhere - You can trade easily Through Laptop/Desktop/Mobile/Tablet
• Smart Buy/sell key - Buy/Sell any stock without adding it to your market watch
• News & alerts - Get Technical & Fundamental Calls as well as any news update from the
Experts
• Fund Transfer - Transfer your fund from your bank in just few minutes
• Online back office - View your Ledger/P&L online at any point of time
• Basket order - Place a single order for an entire basket of stocks or futures

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 ➢ Platforms
They provide the best user-friendly platforms; whether you are new to capital market or an
existing user they have designed their platform in such way that you will find their platform reliable
and easy to trade.

They are offering free Desktop, Mobile Trading Platform versions which has advanced
charting tools and proper risk management rules to ensure that their customers experience the best
trading platform they deserve.

Desktop / Laptop

Concept Trader is Efficiently developed user friendly platform for traders and investors with
advanced chart tools and online fund transfer facility where you can place, modify or cancel your
order placed or you can convert your position from trade book and also can view your positions in a
separate section.

• Customize as you want:

You can customize windows and contents as per your requirement. In order to make your
trade faster you can place shortcuts through your keyboard.

• Multiple Market watch:

You can track your multiple market watch on a single screen.

• Hassle-Free Trading Cum Investment:

We have designed our platform in such a way that it will be smooth and fast to use.

• Online Fund Transfer and Back-office:

Page | 23
 You can transfer your funds instantly online through payment gateway facility available on
our platform and can also access our back-office to view your ledger, daily trade reports.

Mobile / Tablet

Trading cum Investment made easier through your fingertips.

• Simple Interface: Our App is easily accessible and simple to use.

• Live Quotes: Get live quotes through live rates update and also view best 5 Buyers and
Sellers.

• Market Watch: Pre-Defined Market Watch according to different indices.

Portfolio management services

Portfolio Management Services is a customized wealth management services that suits with
the specific objective of High Net Worth Investor (HNI). All the aspects of making and monitoring
investment right from evaluation of options, stock-picking, order execution, settlement and
performance monitoring and reporting are taken care by our Value Addition Team.

The investment is done as per objective of the scheme under overall guidance of the investment
committee. Portfolio Manager has ultimate control over all the investment decisions.

Investing is a full-time activity that entails timely flow of information, and requires thorough
understanding and sharp execution skills. It's quite natural to want to grow one's money. But the
process for achieving this simple goal is actually rather intricate, and requires experience and
expertise. Preserving and growing capital is as difficult as earning it.

Available Plans

• Concept Legend (Large-Cap Equity)

• Concept Marvel (Mid-Cap Equity)
• Concept Shariah (Shariah Complaint Equity)

Salient Features of PMS:

• Professional Management
• Customised & Diversified portfolio
• Active review & Rebalancing
• Personalised client servicing
• Regular reporting & back office support.

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Derivatives

Derivatives are financial contracts, which derive their value off a spot price time-series, which
is called "the underlying". The underlying asset can be equity, index, commodity or any other asset.
Some common examples of derivatives are Forwards, Futures, Options and Swaps.

Derivatives help to improve market efficiencies because risks can be isolated and sold to those
who are willing to accept them at the least cost. Using derivatives breaks risk into pieces that can be
managed independently. From a market-oriented perspective, derivatives offer the free trading of
financial risks

Types of derivative instruments

Derivative contracts are of several types. The most common types are Forwards, Futures,
Options and Swap.

• Forward Contracts:

A forward contract is an agreement between two parties - a buyer and a seller to purchase
or sell something at a later date at a price agreed upon today. Forward contracts, sometimes called
forward commitments, are very common in everyone life. Any type of contractual agreement that
calls for the future purchase of a good or service at a price agreed upon today and without the
right of cancellation is a forward contract.

• Future Contracts

A futures contract is an agreement between two parties - a buyer and a seller - to buy or
sell something at a future date. The contact trades on a futures exchange and is subject to a daily
settlement procedure. Future contracts evolved out of forward contracts and possess many of the
same characteristics. Unlike forward contracts, futures contracts trade on organized exchanges,
called future markets. Future contacts also differ from forward contacts in that they are subject to
a daily settlement procedure. In the daily settlement, investors who incur losses pay them every
day to investors who make profits.

• Options Contracts:

Options are of two types - calls and puts. Calls give the buyer the right but not the
obligation to buy a given quantity of the underlying asset, at a given price on or before a given
future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the
underlying asset at a given price on or before a given date.

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 • Swaps:

Swaps are private agreements between two parties to exchange cash flows in the future
according to a prearranged formula. They can be regarded as portfolios of forward contracts. The
two commonly used swaps are interest rate swaps and currency swaps.

o Interest rate swaps: These involve swapping only the interest related cash flows
between the parties in the same currency.
o Currency swaps: These entail swapping both principal and interest between the
parties, with the cash flows in one direction being in a different currency than those
in the opposite direction.

Commodity Derivatives:

Commodities Derivative market has emerged as a new asset class for investors to create
wealth. Today, Commodities have emerged as the next best option after stocks and bonds for
diversifying the portfolio. Based on the fundamentals of demand and supply, Commodities form a
separate asset class offering investors, arbitrageurs and speculators immense potential to earn
returns.

Concept aims to harness the immense potential of the Commodities market by providing you
a simple yet effective interface, research and knowledge. Concept provides user-friendly online
platforms for commodity trading in the leading commodity exchanges.

Debt FD/Bond

Concept offers a list of Fixed Deposit varying in tenure, interest rate & organization in which
you may choose to invest.

Financial Planning

Financial planning is the process of meeting your life goals through the proper management
of your finances. There can be number of goals in life which includes buying a dream home, savings
for child's education and marriage, holiday with family or planning for retirement.

Page | 26
Process they follow

Reviewing the
developed plan
Developing best on regular basis
plan so you can
meet your set
Examining your
future goals
current financial
status
Identifying
and setting
stages of life
goals
Gathering
information
to reach
financial
goal

NRI Investment services

Investing in Indian Capital Market is an attractive proposition as Indian Economy is doing

well and it is the Second fastest growing economy in the world. There are Positives like demography
which should help India delivering good returns on investment. Debt investment is also giving good
return. Investors should allocate one part of their worth for Investment in India.

Investors from out of India can invest in Indian Capital Market under 2 categories:

• Foreign Portfolio Investors - FPI:

Foreign Portfolio Investors are the Fund, Corporates, and Non-NRI Individuals registered
with SEBI.

• Non-Resident Indian - NRI:

Non-Resident Indians are the individuals with Indian Passport staying out of India and
individuals with other citizenships but hailing from India.

Page | 27
Marketing Department
Marketing Department

Department Structure

Head (Business Development officer)

Back office support

Marketing Executives
team

Functions:

• Approaching Clients
• Market Planning
• Customer Support
• Conducting Campaign management for marketing initiatives
• Monitoring & managing social media

Marketing Communication Mix:

Concept Investwell Private Limited uses following Marketing Communication Mix.

▪ Events:
Concept Investwell Private Limited organises events for creating awareness among
the peoples regarding investment where they invite their current clients and potential
customers.
▪ Word of mouth:
Satisfied clients of the company share their positive experiences to other people so
that many customers come to invest through Concept Investwell Private Limited.
▪ Personal selling:
Company’s employees are taking personal meeting and explain about the schemes and
services that the company offers. And adds a client to the company.
▪ Public relation and publicity:
For publicity they are doing marketing campaign in the different companies like
ESSAR, L&T and create awareness and explain the importance of investment and its benefits.
In whole campaign they explain all plans of mutual funds and also give necessary information
regarding the investment.
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Direct Marketing:

In direct marketing them mostly uses the E-MAIL,

MOBILE. With the help of all marketing tool they do
direct marketing. With the help of E-MAIL, they
randomly send the mail to the existing customer about
the new products,

With the help of MOBILE, they used weekly

calling to the clients for their statements and also give
information about the new services and new investment
option also.

They mostly use separate mobile phone for the only

give information to the all client about in which the
client interested. Like if any client interested in get
detail about the technical analysis detail so they add
that client in that particular group where daily updates
available for the market.

Page | 32
 There is also a broadcast list where on the daily basis our C.O.O. (JASMIN AKABARI) sent
their personally opinion about the intraday trading with the help of technical chart. Here they also
send fundamental report also to the clients.

▪ Interactive Marketing:

They do webinars for creating awareness regarding the investment among their clients. They
also use FACEBOOK & INSTAGRAM page for awareness in the public. They make picture
according to the day like if there is YOGA DAY so they make a picture about the yoga day and
post on the page of the social media. If there is CRICKET WORLD CUP, they make poster
according to the world cup and post on the page.

Page | 33
Demat Department
Demat Department

Department’s Structure

Compliance Officer

DP Head

Assistant DP

Demat Account

Demat account refers to dematerialised account. DeMat account is similar to a bank account
where in the actual money is being replaced by shares, in order to open a demat account, one needs
to approach the depository participants.

In India, a DeMat account is a type of banking account that dematerialises paper-based

physical stock shares. The DeMat account is used to avoid holding of physical shares. In this case,
the advantage is that one does not need any physical evidence for possessing these shares. All the
things are taken care of by the DP.

Categories of account:

• Individual
• Non-Individual
• NRI / NRE & NRO

Individual account consists of HUF (Hindu Undivided Family) and any account that is opened
by the individual person.

Non-Individual account consists of Trust account and Corporate / Company account. Trust
account consists of the account of trusts like any organisation running on trust for example,
Schools, NGOs, etc. Corporate / Company account consists of account of any company. Any
company wants to open an account then that account will be opened under corporate / company
category.
Page | 34
Buy-Back
A buy-back is also known as share repurchase, is when a company buy its own outstanding
shares to reduce the number of shares available in the open market. Companies buy shares for a
number of reasons, such as to increase the value of remaining shares available by reducing the supply
or to prevent other shareholders from taking a controlling stake.

Buybacks can be carried out in two ways:

• Shareholders may be presented with a tender offer whereby they have the option to submit
(or tender) a portion or all of their shares within a certain time frame and at a premium to the
current market price. This premium compensates investors for tendering their shares rather
than holding on to them.
• Companies buy back shares on the open market over an extended period of time.

The reasons for buy-back:

• To improve earnings per share
• To improve return on capital, return on net worth and to enhance the long-term shareholder
value
• To provide an additional exit route to shareholders when shares are undervalued or are
thinly traded
• To enhance consolidation of stake in the company
• To prevent unwelcome takeover bids
• To return surplus cash to shareholders
• To achieve optimum capital structure
• To support share price during periods of sluggish market conditions
• To service the equity more efficiently.

Freezing Accounts:

Account freezing means suspending any further transaction from a depository account till the
account is unfrozen.

By freezing an account for debits only (preventing transfer of securities in / out of the
account), the client can receive securities in his account. An account can also be frozen for debits as
well as credits (preventing any movement of balances out of the account). No transaction can take
place in such an account until it is reactivated. A frozen account may be unfrozen or reactivated, by
taking the reverse step. This would be done on the valid written request of the account holder where
he had requested freezing, Directions of depository made in pursuance of the order of the appropriate

Page | 35
authority. The DP should immediately inform the client about change in status of the account from
'active' to 'suspended' and vice versa.

Dematerialization:

Dematerialization is themoved from physical certificates to electronic book keeping. Actual

stock certificates are slowly being removed and retired from circulation in exchange for electronic
form. Through dematerialization, so called demat accounts allow for electronic shared of stock are
bought and sold. Within a demat account of the user are held as means of seamless to be made. In
earlier eras, the transaction of stock exchange was conducted by traders who should buy and sell
prices. The deals were recorded on paper receipt. After the market closed, the paper work would
continue in order to properly register all the transactions.

The introduction of dematerialization served to eliminate such as paper-oriented process.

Furthermore, by adopting electronic bookkeeping, this allowed for accounts to be updated
automatically and swiftly.

Rematerialization:

Rematerialization is the reverse of dematerialisation. It refers to the process of issuing

physical securities in place of the securities held electronically in book-entry form with a depository.
Under this process, the depository account of a beneficial owner is debited for the securities sought
to be rematerialized and physical certificates for the equivalent number of securities is/are issued.

A beneficial owner holding securities with a depository has a right to get his electronic holding
converted into physical holding at any time. The beneficial owner desiring to receive physical
security certificates in place of the electronic holding should make a request to the Issuer or its R&T
Agent through his DP in the prescribed Rematerialization Request Form (RRF).

On receipt of RRF, the DP checks whether sufficient free /lock-in balance of the securities sought to
be rematerialized is available in the account of the client. If sufficient balance is available, the DP
accepts the RRF and communicates the request to the depository through the DP system

When the depository receives such a rematerialization request, it intimates the Issuer or its R&T agent
about such requests. The depository sends this intimation to R&T agents on a daily basis.

Page | 36
Research Department
Research Department

Department Structure

Fund Manager

Research Head

Research Analyst

Assistant Research
Analyst

Interns

Functions of Research Department

In Research Department fundamental analysis is conducted on Equity, Bonds and Mutual
Funds.
• Equity Analysis: Research analyst conduct fundamental analysis on particular stock assigned
by head or fund manager. He/she prepare research report and presentation is done and after
that final approval of fund manager research report is published on website and
recommendations are given.

• Industry analysis: Along with company analysis research analyst conduct research on
particular industry. All research analysts are assigned with different industries. Research
analyst constantly keep track of their assigned industry.

• IPO Analysis: Research analyst analyse IPOs based on various parameters given in RHP.
 • Bond analysis: Various NCDs, Government bonds and company bond is analysed in detail
by research analyst and also in team and after communicating with fund manager, fund
manager approves and then that is added in recommendation list.

• Mutual fund analysis: Research analyst analyses various funds and schemes of mutual funds
and after that fund manager take final decision on which fund will be added in
recommendation list.

• Portfolio Management: Fund manager and head of the department manages the portfolios
of PMS customers.

• Giving presentations: It is internal presentation only between research team. Research

analyst give presentation on particular company. Purpose is to check whether company is
fundamentally sound or not.

• Preparing research reports: Research analyst prepare research report on particular stock on
bi-monthly basis. They give stock price target on reports by calculating valuation through
fundamental analysis.

• Giving webinars: Research analyst give webinars on particular industry, they make ppts and
present it. this is promotional tool.

• Give suggestions to customers: Whenever customer call to marketing executives and ask
about a particular stock, marketing executive transfer call to research analyst and research
analyst give proper suggestions about particular stock.

Process:

• Research the economic & industry parameters

• Perform financial statement analysis

• Project revenues and profits of company

• Performing valuation of listed companies

• Giving buy target as per fundamental analysis

Fundamental Research report on stock

On Bi-monthly basis research department publish fundamental research reports on particular

company.

Process:

• All research analysts give presentations on their assigned particular company.

• After presentations, discussions are done between team and fund manager.

• After discussion, they select one company which are looking sound and best among others.

• Task of preparing Research report is assigned to that research analyst, who initially gave
presentation on company.

• Research analyst did fundamental analysis during his/her presentation. That information will
include in research report.

• Research analyst find intrinsic value of stock and accordingly intrinsic value set as “Target
price” in research report.

• Other analysts and fund manager will properly check the whole report and identify mistakes.
It mistakes are there corrections are made by research analyst.

• After final approval of fund manager, research report will publish on websites, sending to
traders and customers.

Recommendation List: -

Recommendation list is prepared by research department. Two types of recommendation list is

preparing by research department. Recommendation list is used by traders, marketing executives
and customers.

1) Stock Recommendation List: -

Three types of stocks including in list,

• Large cap companies

• Mid-cap companies

• Small cap companies

Based on fundamental analysis, research analysts identify sound companies and put best out of those
in recommendation list.

Decision of selecting stock for recommendation list should be took based on following
Parameters:

CMP: If intrinsic value is greater than Current market price and stock is available in much low
price than stock is eligible for recommendation list.

Market Cap: Generally high market cap as compare to peers is preferable.

Dividend Yield (%): High percentage is more attractive for those customers who seeks regular
dividend. Growth potential customers didn’t want dividend.

EBITDA Margin (%): Helpful for comparing the profitability of different companies.

PAT CAGR 5 Years (%): Higher the CAGR of profit after tax, more the stock is preferable.

Revenue CAGR 5 Years (%): It indicates revenue growth based on its CAGR, Higher would be
more preferable.

P/E: Generally, a high P/E ratio means that investors are anticipating higher growth in the future
compared to companies with lower P/E.

ROE (%): Normal Return on equity level is different for different sectors. stock’s ROE is
comparing with its peers, higher ROE would be preferable.

ROCE (%): ROE only analyzes profitability whereas, ROCE considers debt and liabilities as well.
Higher the ROCE, more the stock is preferable.

D/E: higher the debt, low attractive stock is. Some industry like construction have high debt so
average industry D/E is set as benchmark.

P/B: price-to-book ratio compares a company's market value to its book value. if a company
liquidated all of its assets and paid off all its debt, the value remaining would be the company's
book value. P/B under 3 called as a good stock.

2) Mutual Fund Recommendation List: -

Following types of funds, they are including in list;

▪ Large Cap

▪ Multi Cap

▪ Mid Cap
 ▪ Small Cap

▪ ELSS (Equity-linked Savings Schemes)

▪ Hybrid

▪ Debt

Investment Objective: They generally select and present the bucket of mutual fund scheme based
on the client risk appetite and profiling and that will differ from client to client i.e.

1. Wealth creation
2. Marriage
3. Education

Track Record: Generally fund should have track record of 5 years.

Minimum corpus requirement: Fund should have minimum corpus size of rs 1500 – 2000 cr.

Quality of fund house: Generally, they do recommendation of only selected AMCs having sizable
corpus and long track record.

Consistency and quality of fund manager: fund manager have good background and should have
performed consistently in the past.

Technical and statistical aspects: they generally see the sharpe ratio, standard deviation and
portfolio turnover.

Expense Ratio: They select the mutual fund having normal expense ratio i.e. for equity mutual fund
and equity oriented balance fund it should between 2 to 2.5%

Dividend Yield: they select mutual fund having dividend yield of between 8 to 12% and for equity
mutual fund it is 5 to 9 %
Research Methodology
 Research Methodology

Research Problem Statement:

“A study on Fundamental analysis of Hindustan Unilever Limited at Concept Investwell Private

Limited”

Objective of the study:

This study focuses on fundamental analysis of selected company Hindustan Unilever

Limited on the basis of market capitalization in FMCG sector. Hindustan Unilever Limited has
highest market capitalization in FMCG sector (Source: BSE, 1-07-2019)

• To Study Hindustan Unilever Limited on the basis of fundamental analysis.

• To analyze company performance.
• To Study the ratios of the company.

Research Design

Descriptive research design has been used in this study because it is fact finding investigation.
Research problem is clearly known and require detail study and it has focus on particular problem
(fundamental analysis) so, descriptive method used.

Method of Data Collection

The nature of data collected for the data is secondary. Secondary data are those, which have
already collected, tabulated and presented in some forms by some one else for some other purpose.
The sources of secondary data in this project are:

• Websites
• Annual Report

Limitations:

• Study is based on past data.

• It is limited to researcher’s knowledge
• Time Consuming

Page | 44
 Financial Tools Used

𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 (𝑃𝐴𝑇)

𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐸𝑃𝑆) =
𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝑆ℎ𝑎𝑟𝑒𝑠

𝐴𝑚𝑜𝑢𝑛𝑡 𝐷𝑒𝑐𝑙𝑎𝑟𝑒𝑑 𝑎𝑠 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐷𝑃𝑆) =
𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝑆ℎ𝑎𝑟𝑒𝑠

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐷𝑃𝑆)

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑎𝑦𝑜𝑢𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐸𝑃𝑆)

𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 ∗ 100

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =
𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ ∗ 100
𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝑀𝑎𝑟𝑘𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑟𝑎𝑡𝑖𝑜 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

𝑃𝑟𝑖𝑐𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑟𝑎𝑡𝑖𝑜 =
𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

𝐸𝐵𝐼𝑇
𝑅𝑒𝑡𝑢𝑟𝑛 𝑂𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =
𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 = 𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝑇𝑜𝑡𝑎𝑙 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠

𝐸𝐵𝐼𝑇
𝐸𝐵𝐼𝑇 𝑀𝑎𝑟𝑔𝑖𝑛 = ∗ 100
𝑆𝑎𝑙𝑒𝑠

𝐶𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑 + 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
𝑇𝑜𝑡𝑎𝑙 𝑆𝑎𝑙𝑒𝑠

𝑆𝑎𝑙𝑒𝑠
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

Page | 45
 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑜𝑢𝑡𝑠𝑖𝑑𝑒 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦

𝐷𝑒𝑏𝑡 𝑒𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠 𝑓𝑢𝑛𝑑

Page | 46
Fundamental Analysis
Fundamental Analysis

Economic Analysis

Economic Environment
Hindustan Unilever Limited operates in the Fast-Moving Consumer Goods (FMCG) industry
that continues to be a big opportunity in India.

The business environment for the FMCG industry has been evolving rapidly and presents a
huge opportunity for businesses. Post structural changes undertaken by the Government of India
through the Goods and Services Tax implementation, consumer demand has stabilised. In a country
like India wherein ~ 60% of the population still lives in rural areas, the consumption patterns in this
segment is very important for your Company’s business performance. Rural growth rate which was
ahead of urban growth rates over the last few quarters, is now at par with urban levels.

In India, favourable demographics, rise in incomes, growing awareness due to technology,

easier access to products and services and changing lifestyles are contributing to major shifts in
consumer behaviour and offering immense potential for the Fast-Moving Consumer Goods (FMCG)
industry. This presents significant opportunities and headroom for growth.

HUL has the benefit of a large portfolio that straddles the economic pyramid with brands that
have a strong presence across the mass, popular and premium ranges in most categories. Their brands
are driven by a social purpose, making them more relevant to the millennial consumers. To harness
the opportunities in India, company is making significant investments in the categories of the future.

HUL continue to invest behind their brands with a focus on macro trends, consumer-relevant
innovation and developing categories of the future. Their expansion of reach into rural areas will also
enable them to capture a larger than fair share of the spending by the rural consumers.

Technological Revolution

Digital technology continues to pervade modern life. It is changing the way people engage
with each other, how they consume goods and services and how they shop. This connected ecosystem
of social, mobile and e-commerce is on the rise, fuelled by increasing internet penetration. This is
creating newer opportunities to connect with as well as to service consumers.

A similar transformation is underway in the area of business operations. Artificial Intelligence

powered intelligent automation and predictive capabilities have the potential to disrupt the current
ways of working and lead to new business models.

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 HUL believes that it is well placed to capture the opportunities of the technological revolution
and explosion of data. As part of the ‘Re-imagining’ HUL agenda, an organisation wide digital
transformation programme has been accelerated. Newer digital and data expert roles have been
introduced and embedded in the business. Several digital experiments have now been scaled up across
the business, transforming both how they service their consumers and customers, and how they run
their internal operations. They believe, a connected organisation can reap the benefits of an ecosystem
made up of connected consumers. They continue to invest significantly in this area. Vernacular,
Video and Voice are now critical for winning in the market and they are stepping up their content
strategy around these areas.

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Industry Analysis

Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian economy
with Household and Personal Care accounting for 50 per cent of FMCG sales in India. Growing
awareness, easier access and changing lifestyles have been the key growth drivers for the sector. The
urban segment (accounts for a revenue share of around 55 per cent) is the largest contributor to the
overall revenue generated by the FMCG sector in India However, in the last few years, the FMCG
market has grown at a faster pace in rural India compared with urban India. Semi-urban and rural
segments are growing at a rapid pace and FMCG products account for 50 per cent of total rural
spending.

Porter’s Five Forces Model

Unilever deals with a wide variety of external factors, considering the extent of its operations
in the global consumer goods market. However, as shown in this Five Forces analysis, such external
factors lead to variations in the intensities of the five forces impacting the business. The following
are the intensities of the five forces in affecting Unilever:

1. Competitive rivalry or competition (strong force)

2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (moderate force)
4. Threat of substitutes or substitution (weak force)
5. Threat of new entrants or new entry (weak force)

• Competitive Rivalry or Competition with Unilever (Strong Force)

Competition is a major force in Unilever’s industry environment. This section of the Five
Forces analysis identifies the external factors that present the impact of firms on each other. The
strong force of competitive rivalry against Unilever is based on the following external factors and
their intensities:

o High number of firms (strong force)

o High aggressiveness of firms (strong force)
o Low switching costs (strong force)

There are many firms operating in the consumer goods industry. This external factor
imposes a strong force on Unilever. In addition, these firms are generally aggressive, further
adding to the intensity of competition. Unilever also experiences tough competition because of
low switching costs. For example, it is easy for consumers to switch from one firm to another.
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Thus, a high level of competition is shown in this section of Unilever’s Five Forces analysis,
highlighting the need to consider competitive rivalry as a high-priority force in the company’s
industry environment.

• Bargaining Power of Unilever’s Customers/Buyers (Strong Force)

Unilever’s business and industry environment depend on the response of consumers to its
products. The influence of buyers on business performance is considered in this section of the
Five Forces analysis. Unilever must address the following external factors that lead to the strong
force of the bargaining power of customers:

o Low switching costs (strong force)

o High quality of information (strong force)
o Small size of individual buyers (weak force)

The low switching costs make it easy for consumers to transfer from Unilever’s products
to other companies’ products. This external factor contributes to the strong intensity of the
bargaining power of buyers. In addition, consumers have access to high quality of information
about consumer goods, making it even easier for them to decide when transferring from Unilever
to other providers. For example, buyers can compare products based on online information. The
small size of an individual consumer’s purchases has minimal impact on Unilever’s profits.
However, the low switching costs and high quality of information outweigh this third external
factor in the industry environment. Based on this section of the Five Forces analysis, the
bargaining power of customers is one of the strongest forces affecting Unilever’s consumer goods
business.

• Bargaining Power of Unilever’s Suppliers (Moderate Force)

Suppliers impact Unilever’s industry environment by affecting the level of supply

available to firms. This section of the Five Forces analysis presents the influence of suppliers on
companies. The following are the external factors that contribute to the moderate force of the
bargaining power of suppliers on Unilever:

o Moderate size of individual suppliers (moderate force)

o Moderate population of suppliers (moderate force)
o Moderate overall supply (moderate force)

While Unilever has large suppliers like foreign firms that supply paper and oil, the average
supplier is moderate in size. This external factor imposes a moderate intensity force on the
consumer goods industry environment. In addition, the moderate population of suppliers enables

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 them to impose significant but limited influence on firms like Unilever. Similarly, the moderate
level of the overall supply adds to such significant but limited influence of suppliers. For example,
any supplier’s change in production level leads to significant but limited change in the availability
of raw materials used in Unilever’s business. Other firms in the industry are similarly affected.
As shown in this section of the Five Forces analysis of Unilever, the bargaining power of suppliers
is a significant but moderate consideration in the consumer goods industry environment.

• Threat of Substitutes or Substitution (Weak Force)

Substitutes can reduce Unilever’s revenues and the strength of firms in the consumer
goods industry environment. The impact of substitution is determined in this section of the Five
Forces analysis. In Unilever’s case, the following external factors are responsible for the weak
force of the threat of substitution:

o Low switching costs (strong force)

o Low substitute availability (weak force)
o Low performance to price ratio of substitutes (weak force)

The low switching costs enable consumers to easily use substitutes to Unilever’s products.
This external factor imposes a strong force on the company and the consumer goods industry
environment. However, the overall impact of substitution is weakened because of the low
availability of substitutes. For example, it is easier to access Unilever’s Close-Up toothpaste from
grocery stores than to obtain substitutes like homemade organic dentifrice. In relation, most
substitutes have low performance with minimal or insignificant cost difference when compared
to consumer goods readily available in the market. This condition makes Unilever’s products
more attractive than substitutes, thereby further weakening the intensity of the threat of
substitution. This section of Unilever’s Five Forces analysis shows that the threat of substitutes
is a minor issue in the business.

• Threat of New Entrants or New Entry (Weak Force)

Unilever competes with established firms as well as new firms in the consumer goods market.
This section of the Five Forces analysis considers the influence of new firms on the industry
environment. The following external factors create the weak force of the threat of new entrants
against Unilever:

o Low switching costs (strong force)

o High cost of brand development (weak force)
o High economies of scale (weak force)

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 The low switching costs enable new entrants to impose a strong force against Unilever.
For example, consumers can easily decide to try new products from new firms. However, it is
costly to build strong brands like Unilever’s. This external factor weakens the intensity of the
threat of new entrants against the company. Also, Unilever takes advantage of high economies of
scale, which support competitive pricing and high organizational efficiencies that new firms
typically lack. As a result, the company remains strong despite new entrants. Based on this section
of the Five Forces analysis, the threat of new entry is a minor concern in Unilever’s industry
environment.

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Company Analysis
History

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap
bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of
marketing branded Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim.
Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).
These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to
the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 67.25%
equity in the company. The rest of the shareholding is distributed among about three lakh individual
shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company
had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.
Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile
Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton
Tea (India) Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold
through an international acquisition of Chesbrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic
growth. The growth process has been accompanied by judicious diversification, always in line with
Indian opinions and aspirations.

The liberalisation of the Indian economy, started in 1991, clearly marked an inflexion in
HUL's and the Group's growth curve. Removal of the regulatory framework allowed the company to
explore every single product and opportunity segment, without any constraints on production
capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the

most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills
Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet another
Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market
Lakme's market-leading cosmetics and other appropriate products of both the companies.

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Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint
venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994,
Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also
set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the largest
manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL's
products like Soaps, Detergents and Personal Products both for the domestic market and exports to
India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods
and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with
significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group
and the Dollops Ice-cream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation
companies of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and
Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and
ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's
range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with
the Kwality Ice-cream Group families and in 1995 the Milk food 100% Ice-cream marketing and
distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two
companies had significant overlaps in Personal Products, Speciality Chemicals and Exports
businesses, besides a common distribution system since 1993 for Personal Products. The two also
had a common management pool and a technology base. The amalgamation was done to ensure for
the Group, benefits from scale economies both in domestic and export markets and enable it to fund
investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HUL, thereby beginning the divestment of government equity in public sector
undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the
company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern
Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.

Page | 54
HUL launched a slew of new business initiatives in the early part of 2000’s. Project Shakti was started
in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is
a unique win-win initiative that catalyses rural affluence even as its benefits business. Currently, there
are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and reaching to
over 3 million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush
product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home business
was launched in 2003 and this was followed by the launch of ‘Pure it’ water purifier in 2004.

In 2007, the Company name was formally changed to Hindustan Unilever Limited after
receiving the approval of shareholders during the 74th AGM on 18 May 2007. Brooke Bond and Surf
Excel breached the the Rs 1,000 crore sales mark the same year followed by Wheel which crossed
the Rs.2,000 crore sales milestone in 2008.

On 17th October 2008, HUL completed 75 years of corporate existence in India. In January
2010, the HUL head office shifted from the landmark Lever House, at Backbay Reclamation,
Mumbai to the new campus in Andheri (E), Mumbai.

On 15th November, 2010, the Unilever Sustainable Living Plan was officially launched in
India at New Delhi.

In March, 2012 HUL’s state of the art Learning Centre was inaugurated at the Hindustan
Unilever campus at Andheri, Mumbai.

In April, 2012, the Customer Insight & Innovation Centre (CIIC) was inaugurated at the
Hindustan Unilever campus at Andheri, Mumbai

HUL completed 80 years of corporate existence in India on October 17th, 2013.

In 2013, HUL launched ‘Prabhat’ (Dawn) - a Unilever Sustainable Living Plan (USLP) linked
program to engage with and contribute to the development of local communities around its
manufacturing sites. Also, Unilever’s first aerosol plant in Asia was inaugurated in Khamgaon,
Maharashtra in 2013.

In 2014, The ‘Winning in Many India’s’ operating framework, piloted in 2013, launched
nationally. Sales offices expanded from four to seven with the launch of offices in Lucknow, Indore
and Bangalore in addition to the existing sales offices in Delhi, Kolkata, Mumbai and Chennai.

In 2016, HUL unveiled ‘Suvidha’ a first-of-its-kind urban water, hygiene and sanitation
community centre in Azad Nagar, Ghatkopar, one of the largest slums in Mumbai.

Page | 55
 A new state-of-the-art manufacturing facility was commissioned in Doom Dooma Industrial
Estate, Assam on 11th March 2017.

In 2018, HUL signed an agreement with Vijaykant Dairy and Food Products Limited
(VDFPL) and its group company to acquire its ice cream and frozen desserts business consisting of
its flagship brand ‘Adityaa Milk’ and front-end distribution network across geographies.

Page | 56
 Brands
Personal Care

Page | 57
Home Care

Page | 58
Food & Drinks

Water Purifier

Page | 59
Segmental Performance

Segmental Revenue (%)

1%
19% Home Care

34%
Beauty & Personal Care

Foods & Refreshments

Others

46%

Segmetal Profits (%)

0%
15%
Home Care
27%

Beauty & Personal Care

Foods & Refreshments

Others
58%

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Home Care

HUL’s Home Care business sustained its volume driven, profitable growth during the year.
The fabric wash business delivered a strong performance on the back of continuing premiumisation
with Surf excel and Rin, whilst regaining growth in the mass segment led by Wheel. In the market
development segments of machines and fabric conditioning, Surf excel matic liquid and Comfort
fabric conditioner continued their growth trajectory. During the year, flexible packs were introduced
in detergent liquids and fabric conditioners to make them more affordable for the consumers and
further drive consumption and penetration.

In Household Care, Vim led the market development for dishwash by driving category
adoption of Vim bar in rural India and upgrading existing bar consumers to the liquid format in urban
India. Vim liquid performed well by increasing penetration through introduction of access packs.
Domex Toilet cleaner was relaunched with a long-lasting freshness proposition and new user-friendly
packaging. The low cost Domex powder, designed for squat toilets, was extended to selected
geographies in India.

Company is sharpening its strategy for the Pureit portfolio in line with the evolving needs of
consumers. The brand will focus on the electric purifier product range and phase out the gravity filter
range while continuing to win with consumers through value added innovations. Based on its new
strategy, this year, Pureit launched Pureit Copper+, an innovation inspired by the age-old tradition of
storing water in Copper vessels, which adds goodness of copper to RO purified water.

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Beauty & Personal Care

Company continued to focus on key areas - strengthening core brands, accelerating

premiumisation of the portfolio, driving market development at scale, entering into white spaces and
scaling up play in naturals. The penetration and consumption of the categories in which company
operates, have a healthy headroom to grow, indicating the long-term potential in the BPC market.
The business registered a robust growth led by premiumisation during the year.

Skin Care saw accelerated growth across segments including face care, face cleansing and
hand and body. Growth in core portfolio of Skin Care was driven by good momentum in Fair &
Lovely and strong growth in Pond’s and the premium part of the portfolio. All the value packs
launched in the moisturiser range in Pond’s, Vaseline and Vaseline Petroleum Jelly, Lakmé Aloe
range and Lakmé Lip Love did well during the year. The talc business grew strongly with the launch
of Pond’s Starlight Talc variant. The facial cleansing business also saw strong growth during the
year.

Lakmé continued its dream run, growing across the portfolio (Core, 9to5, Absolute), after
entering the list of company’s ` 1,000+ crore brands last year. Launch of consumer-focussed
innovations such as the Kareena Kapoor Khan collection – a bold and beautiful premium range of
makeup, helped the brand deliver stellar results. Lakmé Fashion Week, the most digitally followed
fashion event in the world, which has been a marquee event for the brand, continued to gain in size
and scale and helped enhance the brand equity with consumers. The e-commerce channel is emerging
as a key growth driver for the category and your Company continues its focus on this opportunity.

Skin Cleansing growth was led by the premium part of the portfolio- Dove, Pears and Hamam.
The freshness variants within Lifebuoy, Lux and Liril did well.

Lux hosted the 3rd edition of the Lux Golden Rose Awards (LGRA) to celebrate the best
women actors in Bollywood that coincided with the brand’s 90th Anniversary. One of the highest
rated award shows of 2018, LGRA further helped build the equity of Lux as the ‘Beauty Soap of the
Stars’ with consumers.

In Haircare, company sustained its strong growth momentum with new launches and
activations throughout the year. The performance was further boosted by robust growth in
TRESemmé, Dove and Indulekha. TRESemmé, on its fifth anniversary in India, was relaunched with
new packaging and a more fragrant formulation. TRESemmé was also the official hair partner of the
Lakmé Fashion Week, re-establishing its credential as the choice of professionals. During the year,
Dove became India’s No.1 hair care brand. Dove shampoo and conditioner range was relaunched
with increased level of Keratin Actives for damage repair. Indulekha entered the shampoo category

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and led the charge in the naturals segment in Haircare. Brylcreem launched an exclusive range of
men’s grooming products for hair and beard - a first for the Company. The range was co-created with
Amazon, leveraging new digital business models in e-commerce.

Company’s sustained efforts helped getting some momentum back in the Oral Care category.
Company relaunched CloseUp and Pepsodent with a refreshed proposition and communication. With
the launch of LEVER ayush and natural variants in CloseUp, company continued to build its
credentials into the growing Oral Care naturals segment. The year saw the relaunch of Pepsodent
Germicheck toothpaste and Pepsodent Clove and Salt toothpaste with natural clay activated formula
using proprietary germ fighting technology for long lasting germ protection. Pepsodent Expert
Protection Complete, Germ care and Whitening variants were also relaunched.

Deodorants performed well with innovations and market development driving the growth.
Axe Ticket – a pocket sized perfume pack through its contextual, digital and moment marketing
activations continued to build the consumer franchise. Rexona, their leading anti-perspirant brand,
delivered great results in select geographies and has now been rolled out nationally.

Company further strengthened its ‘naturals’ strategy through its three-pronged approach. The
master brand LEVER ayush launched across multiple categories like oral care, haircare, skin care,
skin cleansing continued to perform well in south India. The second leg of the strategy is building
specialist brands like Indulekha. Indulekha has delivered impressive performance in both oil and
shampoos, with a unique product formulation and distinctive packaging. The third leg of the
‘naturals’ strategy involves supporting various natural variants within their existing portfolio of
products like Lakmé aloe vera range, Lifebouy neem and turmeric, Fair & Lovely Ayurveda etc.

Page | 63
Foods & Refreshments

Company integrated Foods and Refreshments categories with an objective of making the
business simpler, more focussed and agile. The Foods & Refreshment division delivered strong
growth across categories. The Foods business of company is home to trusted brands like Kissan,
Knorr and Annapurna and plays across different product segments. In Foods, they continued to grow
steadily in the core portfolio of Jams and Ketchups while investing in market development to drive
penetration in nascent categories. During the year, Kissan launched a range of international sauces –
Schezwan, Manchurian, Pizza Pasta and Mexican Salsa.

The Refreshment business of the company, comprising of the iconic brands like Taj Mahal,
Brooke Bond Red Label, Lipton, BRU and Kwality Wall’s, had a good year. The business delivered
strong volume-led growth across Tea, Ice Creams and Frozen Desserts. The business continued to
drive reach by increasing direct distribution and leveraging their WiMi strategy. Tea continued to
deliver robust, volume-led growth as all the key brands – Brooke Bond Red Label, 3 Roses, Taaza
and Taj Mahal – continued to grow and delight millions of consumers with their superior products at
the right price. The relaunched Brooke Bond Taj Mahal continued to strengthen its franchise.
Company launched two new premium variants of Taj Mahal for gifting on the e-commerce channel.
Taaza continued to upgrade consumers along the quality pyramid by offering superior value.

Brooke Bond Red Label and 3 Roses Natural Care Tea, with its differentiated immunity
benefit from ayurvedic ingredients, continued to delight consumers. Lipton green tea accelerated its
proposition on how exercise, when supplemented with green tea, can work wonders for weight loss.

During the year, company launched a new variant of BRU Coffee in select geographies. It continues
to leverage state-of the-art roasting and extraction technologies to deliver superior instant coffee
products. For the first time, Company launched beaten coffee and new masala tea premix in the Out-
of-Home vending channel.

During the year, the Ice Cream and Frozen Desserts business delivered strong, volume-led
growth on the back of innovations and geography expansion. Company rolled out globally successful
innovations – UniCornetto, Sandwich and Magnum Hazelnut as well as local innovations - Cloud
Bite with twin flavours and access packs in Choco Cone, Orange Bar and Rajwadi Bite. Company
also launched several co-branded innovations – Cornetto Oreo, Gems Cup and Oreo Tubs. During
the year, Company acquired Adityaa Milk Ice creams brand and distribution business which has
provided an entry into complementary markets and also bolstered the product portfolio.

Page | 64
 Balance Sheets

Balance Sheet As at 31st March 2019

(Figures in crores)
Particulars As at 31st March 2019
ASSETS
Non-current assets
Property, Plant & Equipment 4192
Capital Work-in-progress 406
Goodwill 36
Other intangible assets 406
Goodwill on consolidation 81
Financial Assets
Investments 2
Loans 215
Other financial assets 11
Non-current tax assets (net) 835
Deferred tax assets (net) 373
Other non-current assets 158
Current assets
Inventories 2574
Financial assets
Investments 2714
Loans 4
Trade Receivables 1816
Cash and cash equivalents 621
Bank balances other than cash and cash equivalents mentioned above 3136
Other financial assets 577
Other current assets 468
Assets held for sale 4
TOTAL ASSETS 18629

Page | 65
 (Figures in Crores)
Particulars As at 31st March 2019
EQUITY AND LIABILITIES
Equity
Equity share capital 216
Other equity 7651
Non-controlling interests 18
Liabilities
Non-current liabilities
Financial Liabilities
Other Financial Liabilities 177
Provisions 1082
Non-current tax liabilities (net) 601
Other non-current liabilities 217
Current liabilities
Financial Liabilities
Borrowings 99
Trade Payables
Total outstanding dues of micro enterprises & small enterprises -
Total outstanding dues of creditors other than micro enterprise & 7206
. small enterprises
Other Financial Liabilities 286
Other current liabilities 553
Provisions 523
TOTAL EQUITY AND LIABILITIES 18629

Page | 66
 Ratio Analysis (2019)

Earnings Per Share

𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 (𝑃𝐴𝑇)
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐸𝑃𝑆) =
𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝑆ℎ𝑎𝑟𝑒𝑠

60560000000
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐸𝑃𝑆) =
2164704405

𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐸𝑃𝑆) = 27.97

Dividend Per Share

𝐴𝑚𝑜𝑢𝑛𝑡 𝐷𝑒𝑐𝑙𝑎𝑟𝑒𝑑 𝑎𝑠 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐷𝑃𝑆) =
𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝑆ℎ𝑎𝑟𝑒𝑠

47620000000
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐷𝑃𝑆) =
2164704405

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐷𝑃𝑆) = 22

Price to Earnings ratio

𝑀𝑎𝑟𝑘𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒
𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑟𝑎𝑡𝑖𝑜 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

1787
𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑟𝑎𝑡𝑖𝑜 =
27.97

𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑟𝑎𝑡𝑖𝑜 = 63.89

Price to Book Value ratio

𝑃𝑟𝑖𝑐𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒
𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑟𝑎𝑡𝑖𝑜 =
𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

1787
𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑟𝑎𝑡𝑖𝑜 =
36.43

Page | 67
 𝑃𝑟𝑖𝑐𝑒 𝑡𝑜 𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑟𝑎𝑡𝑖𝑜 = 49.05
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 =
𝑁𝑜. 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠

186290000000 − 107440000000
𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 =
2164704405

𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 = 36.43

Return on Equity
𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 ∗ 100
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =
𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ ∗ 100

60560000000
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =
78850000000

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 = 0.7680

ROE = 76.80%

𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ = 186290000000 − 107440000000
𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ = 78850000000

Return on Capital Employed

𝐸𝐵𝐼𝑇
𝑅𝑒𝑡𝑢𝑟𝑛 𝑂𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =
𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑

88320000000
𝑅𝑒𝑡𝑢𝑟𝑛 𝑂𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =
99620000000
𝑅𝑒𝑡𝑢𝑟𝑛 𝑂𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 = 0.8865
𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 = 88.65%

𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 = 186290000000 − 86670000000

Page | 68
 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 = 99620000000

Return on Assets
𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

60560000000
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =
186290000000

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 = 32.50%

Dividend Pay-out Ratio

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐷𝑃𝑆)
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑎𝑦𝑜𝑢𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 (𝐸𝑃𝑆)

22
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑎𝑦𝑜𝑢𝑡 𝑅𝑎𝑡𝑖𝑜 =
27.97

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑎𝑦𝑜𝑢𝑡 𝑅𝑎𝑡𝑖𝑜 = 78.66%

Operating Ratio
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑 + 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
𝑇𝑜𝑡𝑎𝑙 𝑆𝑎𝑙𝑒𝑠

18413 + 12554
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
38684

30967
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
38684

30967
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
38684

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑅𝑎𝑡𝑖𝑜 = 80.05%

Page | 69
Inventory Turnover Ratio
𝑆𝑎𝑙𝑒𝑠
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 =
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

38684
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 =
2574

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 = 15.02

Current Ratio
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

11914
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =
8667

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 = 1.37

Debt equity ratio

𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑜𝑢𝑡𝑠𝑖𝑑𝑒 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦
𝐷𝑒𝑏𝑡 𝑒𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠 𝑓𝑢𝑛𝑑

990000000
𝐷𝑒𝑏𝑡 𝑒𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜 = ∗ 100
78850000000

𝐷𝑒𝑏𝑡 𝑒𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜 = 1.26

Earnings Before Interest, Tax, Depreciation and Amortisation Margin

𝐸𝐵𝐼𝑇𝐷𝐴
𝐸𝐵𝐼𝑇𝐷𝐴 𝑀𝑎𝑟𝑔𝑖𝑛 = ∗ 100
𝑅𝑒𝑣𝑒𝑛𝑢𝑒

93970000000
𝐸𝐵𝐼𝑇𝐷𝐴 𝑀𝑎𝑟𝑔𝑖𝑛 = ∗ 100
398600000000

Page | 70
 𝐸𝐵𝐼𝑇𝐷𝐴 𝑀𝑎𝑟𝑔𝑖𝑛 = 23.57%

Earnings Before Interest and Tax Margin

𝐸𝐵𝐼𝑇
𝐸𝐵𝐼𝑇 𝑀𝑎𝑟𝑔𝑖𝑛 = ∗ 100
𝑅𝑒𝑣𝑒𝑛𝑢𝑒

88320000000
𝐸𝐵𝐼𝑇 𝑀𝑎𝑟𝑔𝑖𝑛 = ∗ 100
366220000000

𝐸𝐵𝐼𝑇 𝑀𝑎𝑟𝑔𝑖𝑛 = 22.15%

Net Profit Margin

𝑃𝐴𝑇
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = ∗ 100
𝑆𝑎𝑙𝑒𝑠

60560000000
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = ∗ 100
386840000000

𝑃𝐴𝑇 𝑀𝑎𝑟𝑔𝑖𝑛 = 15.65%

Page | 71
Balance sheet as at 31st march 2018

(Figures in Crores)
Particulars As at 31st March 2018
ASSETS
Non-current assets
Property, Plant & Equipment 4080
Capital Work-in-progress 461
Goodwill 0
Other intangible assets 367
Goodwill on consolidation 81
Financial Assets
Investments 2
Loans 184
Other financial assets 6
Non-current tax assets (net) 635
Deferred tax assets (net) 302
Other non-current assets 84
Current assets
Inventories 2513
Financial assets
Investments 2871
Loans 4
Trade Receivables 1310
Cash and cash equivalents 649
Bank balances other than cash and cash equivalents mentioned above 2836
Other financial assets 805
Other current assets 656
Assets held for sale 16
TOTAL ASSETS 17862

Page | 72
 (Figures in Crores)
Particulars As at 31st March 2018
EQUITY AND LIABILITIES
Equity
Equity share capital 216
Other equity 7065
Non-controlling interests 20
Liabilities
Non-current liabilities
Financial Liabilities
Other Financial Liabilities 119
Provisions 800
Non-current tax liabilities (net) 558
Other non-current liabilities 197
Current liabilities
Financial Liabilities
Borrowings -
Trade Payables
Dues to micro enterprises & small enterprises -
Dues to others 7170
Other Financial Liabilities 214
Other current liabilities 815
Provisions 688
TOTAL EQUITY AND LIABILITIES 17862

Page | 73
 Ratio Analysis (2018)

Earnings Per share 24.09

Dividend Per Share 20

Return on Equity 71.61%

Return on Capital Employed 82.03%

Return on Assets 29.19%

Dividend Pay-out Ratio 82.67%

Operating Ratio 80.04%

Inventory Turnover Ratio 14.14

Current Ratio 1.31

Debt Equity Ratio 0

EBITDA Margin 22.17%

EBIT Margin 20.71%

Net Profit Margin 14.70%

Page | 74
Balance Sheet As at 31st march 2017

(Figures in Crores)
Particulars As at 31st March 2017
ASSETS
Non-current assets
Property, Plant & Equipment 3968
Capital Work-in-progress 229
Goodwill 0
Other intangible assets 370
Goodwill on consolidation 81
Investments in subsidiaries, associates and joint venture -
Financial Assets
Investments 6
Other financial assets 128
Non-current tax assets (net) 461
Deferred tax assets (net) 170
Other non-current assets 75
Current assets
Inventories 2541
Financial assets
Investments 3788
Trade Receivables 1085
Cash and cash equivalents 628
Bank balances other than cash and cash equivalents mentioned above 1200
Other financial assets 331
Other current assets 598
Assets held for sale 47
TOTAL ASSETS 15706

Page | 75
 (Figures in Crores)
Particulars As at 31st March 2017
EQUITY AND LIABILITIES
Equity
Equity share capital 216
Other equity 6528
Non-controlling interests 22
Liabilities
Non-current liabilities
Financial Liabilities
Other Financial Liabilities 73
Provisions 514
Non-current tax liabilities (net) 432
Deferred tax liabilities (net) -
Other non-current liabilities 207
Current liabilities
Financial Liabilities
Borrowings 277
Trade Payables
Dues to micro enterprises & small enterprises 0
Dues to others 6186
Other Financial Liabilities 195
Other current liabilities 644
Provisions 392
TOTAL EQUITY AND LIABILITIES 15706

Page | 76
 Ratio Analysis (2017)

Earnings Per share 20.68

Dividend Per Share 16.50

Return on Equity 66.37%

Return on Capital Employed 78.54%

Return on Assets 28.49%

Dividend Pay-out Ratio 79.81%

Operating Ratio 83.23%

Inventory Turnover Ratio 13.05

Current Ratio 1.32

Debt Equity Ratio 4.09

EBITDA Margin 20.23%

EBIT Margin 18.92%

Net Profit Margin 13.53%

Page | 77
Balance Sheet as at 31st march 2016

(Figures in Crores)
Particulars As at 31st March 2016
ASSETS
Non-current assets
Fixed assets
Tangible assets 3207.38
Intangible assets 12.00
Capital Work-in-progress 427.33
Goodwill on consolidation 81.18
Non-current investments 325.00
Deferred tax assets (net) 233.32
Long-term loans and advances 636.17
Other non-current assets 0.20
Current assets
Current investments 2422.42
Inventories 2752.13
Trade receivables 1268.51
Cash and bank balances 3027.84
Short-term loans and advances 668.69
Other current assets 102.68
TOTAL 16164.85

Page | 78
 (Figures in Crores)
Particulars As at 31st March 2016
EQUITY AND LIABILITIES
Shareholder’s fund
Share capital 216.39
Reserves and surplus 3755.32
Minority Interest 25.05
Deferred tax liabilities (net) -
Non-current liabilities
Long-term borrowings 42.00
Other long-term liabilities 221.71
Long-term provisions 1156.99
Current liabilities
Short-term borrowings 212.78
Trade payables
Dues to Micro and small enterprises -
Dues to others 5727.65
Other current liabilities 891.65
Short-term provisions 2915.31
TOTAL 15164.85

Page | 79
 Ratio Analysis (2016)

Earnings Per share 19.10

Dividend Per Share 15.50

Return on Equity 62.96%

Return on Capital Employed 53.96%

Return on Assets 27.97%

Dividend Pay-out Ratio 81.15%

Operating Ratio 82.44%

Inventory Turnover Ratio 11.81

Current Ratio 1.46

Debt Equity Ratio 2.70

EBITDA Margin 20.01%

EBIT Margin 18.92%

Net Profit Margin 12.92%

Page | 80
Balance Sheet as at 31st march 2015

(Figures in Crores)
Particulars As at 31st March 2015
ASSETS
Non-current assets
Fixed assets
Tangible assets 2717.80
Intangible assets 22.03
Capital Work-in-progress 516.30
Intangible assets under development -
Goodwill on consolidation 81.18
Non-current investments 323.90
Deferred tax assets (net) 199.79
Long-term loans and advances 587.24
Other non-current assets 0.46
Current assets
Current investments 2701.18
Inventories 2848.79
Trade receivables 1011.18
Cash and bank balances 2689.49
Short-term loans and advances 646.79
Other current assets 84.67
TOTAL 14430.80

Page | 81
 (Figures in Crores)
Particulars As at 31st March 2015
EQUITY AND LIABILITIES
Shareholder’s funds
Share capital 216.35
Reserves and surplus 3805.29
Minority Interest 24.80
Non-current liabilities
Long-term borrowings 7.00
Deferred tax liabilities (net) 0.37
Other long-term liabilities 178.24
Long-term provisions 993.56
Current liabilities
Short-term borrowings 36.04
Trade payables 5507.31
Other current liabilities 952.77
Short-term provisions 2709.07
TOTAL 14430.80

Page | 82
 Ratio Analysis (2015)

Earnings Per share 20.17

Dividend Per Share 13.46

Return on Equity 108.5%

Return on Capital Employed 83.49%

Return on Assets 30.23%

Dividend Pay-out Ratio 66.73%

Operating Ratio 83.04%

Inventory Turnover Ratio 11.22

Current Ratio 1.08

Debt Equity Ratio 0.9

EBITDA Margin 18.70%

EBIT Margin 17.69%

Net Profit Margin 13.68%

Page | 83
Data Analysis
 Data Analysis

EBITDA and EBITDA Margin

Year 2015 2016 2017 2018 2019

EBITDA 5962 6342 6674 7857 9397

Total Revenue 32539 33591 36128 36622 39860

EBITDA Margin 18.32% 18.88% 18.47% 21.45% 23.58%

EBITDA & EBITDA Margin

10000 23.58% 25.00%

9000 21.45%

8000 18.32% 18.88% 18.47% 20.00%

7000

6000 15.00%

5000
9397
4000 7857 10.00%
6342 6674
3000 5962
2000 5.00%

1000

0 0.00%
2015 2016 2017 2018 2019

EBITDA EBITDA Margin

The EBITDA margin measures a company's earnings before interest, tax, depreciation and
amortization as a percentage of the company's total revenue.

Because EBITDA is calculated before any interest, taxes, depreciation and amortization, the
EBITDA margin measures how much cash profit a company made in a given year. A company's cash
profit margin is a more effective indicator than its net profit margin, because it minimizes the non-
operating and unique effects of depreciation recognition, amortization recognition and tax laws.

Here, Company’s EBITDA and EBITDA margin is increasing since last two years.

Page | 84
EBIT & EBIT Margin

EBIT & EBIT Margin

10000 25.00%
22.83%
9000 20.63%
8000 20.00%
17.85%
17.12% 17.22%
7000

6000 15.00%

5000
8832
4000 10.00%
7337
3000 5985 6242
5640
2000 5.00%

1000

0 0.00%
2015 2016 2017 2018 2019

EBIT EBIT Margin

This indicator gives information on a company's earnings ability. Increase in EBIT is mainly
due to growth of net revenue, good cost control and strong productivity, Decrease in EBIT margin
largely results from reduction in revenue and higher operating costs.

Here, Hindustan Unilever Limited’s EBIT margin is increasing since last five years.

EPS-DPS-DPOR

EPS-DPS-DPOR
30 27.97
24.09
25
20.17 20.68
19.1
20 22
20
15
15.5 16.5
10 13.46

5
67% 81% 80% 83% 79%
0
2015 2016 2017 2018 2019

EPS DPS DPOR

Page | 85
PAT and PAT Margin

Year 2015 2016 2017 2018 2019

PAT 4375 4094 4502 5225 6056

Sales 32944 34752 34964 35571 38684

PAT Margin 13.28% 11.78% 12.88% 14.69% 15.66%

PAT & PAT Margin

7000 18.00%
15.66%
14.69% 16.00%
6000
13.28% 12.88% 14.00%
5000 11.78%
12.00%

4000 10.00%

3000 6056 8.00%

5225
4375 4502 6.00%
2000 4094
4.00%
1000
2.00%

0 0.00%
2015 2016 2017 2018 2019

PAT PAT Margin

Profit After Tax margin is a financial performance ratio calculated by dividing net income by
net sales. A company's after-tax profit margin is significant because it shows how well a company
controls its costs. A high after-tax profit margin generally indicates that a company runs efficiently,
providing more value, in the form of profits, to shareholders.

Profit After Tax margin is increasing since last three years so it’s an good indication which
means the costs are well controlled and company is efficiently running the business.

Page | 86
ROE-ROCE-ROA

ROE-ROCE-ROA
120.0%

108.5%
100.0%

88.65%
83.49% 82.03%
80.0% 78.54% 76.80%
71.61%
66.37%
60.0% 62.96%
53.56%

40.0%
30.23% 32.50%
27.97% 28.50% 29.19%
20.0%

0.0%
2015 2016 2017 2018 2019

ROE ROCE ROA

Return on equity measures how effectively management is using a company’s assets to create
profits. A good or bad ROE will depend on what’s normal for the industry or company peers.

Return on Assets (ROA) is an indicator of how well a company utilizes its assets, by determining
how profitable a company is relative to its total assets. ROA is best used when comparing similar
companies or comparing a company to its previous performance. ROA takes into account a
company’s debt, unlike other metrics, such as Return on Equity (ROE).

Return on capital employed (ROCE) is a financial ratio that measures a company's profitability
and the efficiency with which its capital is used. In other words, the ratio measures how well a
company is generating profits from its capital.

Company HUL Dabur Godrej Consumer

ROE 76.80 25.61 32.22

ROCE 88.65 32.18 20.00

ROA 32.50 17.09 16.52

Here, on ROE-ROCE-ROA Hindustan Unilever Limited performs better among its peer
group.
Page | 87
Inventory Turnover Ratio:

Inventory Turnover Ratio

16

14 15.02
14.14
12 13.05
11.81
10 11.22

0
2015 2016 2017 2018 2019

Inventory turnover shows how many times a company has sold and replaced inventory
during a given period. This helps businesses make better decisions on pricing, manufacturing,
marketing, and purchasing new inventory. A low turnover implies weak sales and possibly excess
inventory, while a high ratio implies either strong sales or insufficient inventory.

Company HUL Dabur Godrej Consumer

Inventory Turnover
15.02 6.56 6.62
Ratio

Here, Inventory Turnover of Hindustan Unilever Limited is highest among its peer group.

Page | 88
Operating Ratio

Operating Ratio
84.00%

83.00% 83.23%
83.04%

82.00% 82.45%

81.00%

80.00%
80.04% 80.05%

79.00%

78.00%
2015 2016 2017 2018 2019

The operating ratio shows the efficiency of a company's management by comparing the total
operating expense of a company to net sales. The operating ratio shows how efficient a company's
management is at keeping costs low while generating revenue or sales.

An operating ratio that is decreasing is viewed as a positive sign, as it indicates that operating
expenses are becoming an increasingly smaller percentage of net sales. A company may need to
implement cost controls for margin improvement if its operating ratio is increasing over time.

Here, Operating Ratio is decreasing since last two years so its a positive sign, as it indicates
that operating expenses are becoming an increasingly smaller percentage of net sales.

Page | 89
Debt Equity Ratio

Debt Equity Ratio

4.50
4.09
4.00

3.50

3.00 2.68

2.50

2.00

1.50 1.26
0.90
1.00

0.50
0.00
0.00
2015 2016 2017 2018 2019

The debt-to-equity (D/E) ratio is calculated by dividing a company’s total liabilities by its
shareholder equity. The ratio is used to evaluate a company's financial leverage. The D/E ratio is an
important metric used in corporate finance. It is a measure of the degree to which a company is
financing its operations through debt versus wholly-owned funds.

The debt-to-equity (D/E) ratio compares a company’s total liabilities to its shareholder equity
and can be used to evaluate how much leverage a company is using. Higher leverage ratios tend to
indicate a company or stock with higher risk to shareholders.

Here, Hindustan Unilever has very less debts which means outside interference is less.

Page | 90
Current Ratio

Current Ratio
1.6

1.4
1.46
1.2 1.37
1.32 1.31
1
1.08
0.8

0.6

0.4

0.2

0
2015 2016 2017 2018 2019

The current ratio compares all of a company’s current assets to its current liabilities. These
are usually defined as assets that are cash or will be turned into cash in a year or less, and liabilities
that will be paid in a year or less. The current ratio is sometimes referred to as the “working capital”
ratio and helps understand more about a company’s ability to cover its short-term debt with its
current assets. Weaknesses of the current ratio include the difficulty of comparing the measure
across industry groups, overgeneralization of the specific asset and liability balances, and the lack
of trending information.

Ideal Current ratio is 2:1 but here Hindustan Unilever Limited’s current ratio is 1.37:1.

Comparison with peers

Company HUL Dabur Godrej Consumer

Price 1787 407 669

Market Capitalisation 392045 (Cr.) 71963 (Cr.) 68454 (Cr.)

Price to Earnings 63.89 56.88 39

Price to Book Value 49.05 18.12 13.90

Earnings Per Share 27.97 8.17 22.90

Page | 91
Share Price of Hindustan Unilever Limited

Page | 92
Ratios of Last Five Years

Ratio 2015 2016 2017 2018 2019

Return on Equity 108.5 62.96 66.37 71.61 76.80

Return on Capital
83.49 53.96 78.54 82.03 88.65
Employed

Return on Assets 30.23 27.97 28.49 29.19 32.50

Dividend Pay-out ratio 66.73 81.15 79.81 82.67 78.66

EBIT Margin 17.69 18.92 18.92 20.71 22.83

EBITDA Margin 18.70 20.01 20.23 22.17 23.58

Net Profit Margin 13.68 12.92 13.53 14.70 15.66

Operating Ratio 83.04 82.44 83.23 80.04 80.05

Inventory Turnover Ratio 11.22 11.81 13.05 14.14 15.02

Current Ratio 1.08 1.46 1.32 1.31 1.37

Debt Equity Ratio 0.9 2.70 4.09 0 1.26

Page | 93