Consumer Thematic Report LKP Dec20

27-Dec-2020 Sector Report
Consumer Thematic
CY2020 has seen several Consumer Facing Companies selling Daily Essential Products with Top
of the Mind Brand Recall expand their Total Addressable Market and emerge winners. In this Leading Biscuit and Bakery products manufacturer
Thematic Report we bring out the several attributes of such companies which made them even
more formidable during the Pandemic Year and help them cement their position as Wealth
Leading Hair and Edible Oil Producer
Creators for their Stakeholders.
Market Cap (Crs) Growth During FY12-20 Leading Pizza Delivery chain and QSR
Company Name
2012 2020 24-Dec-2020 CAGR Growth
Leading manufacturer of Salt and 2nd largest Branded Tea company
Britannia 3,532 64,521 87,152 44% 18.3x
in the world
Marico 5,074 35,429 51,819 27% 7x
Leading manufacturer of Baby Foods and Infant Nutrition
Jubilant FoodWorks 3,822 19,319 35,731 22% 5.1x
Tata Consumer 6,945 27,126 55,385 19% 3.9x Market Leader in laundry, soaps, hair care, home care and skin care
products
Nestle* 39,424 1,41,808 1,79,009 17% 3.6x
Hindustan Unilever 88,743 4,96,653 5,64,422 24% 5.6x Leading manufacturer of Oral care products
Colgate-Palmolive 7,590 34,047 42,670 21% 4.5x

Leading player in healthcare (immunity boosters) and personal care
Dabur 18,573 79,473 90,943 20% 4.3x
Godrej Consumer 5,450 53,278 73,721 33% 9.8x Leading player in household insecticides, hair color and air freshener
and no. 2 player in soaps.
Asian Paints 31,145 1,59,605 2,54,020 23% 5.1x
Berger Paints 1,314 48,349 71,001 57% 36.8x Market Leader in Paint Industry
*2011-2019 - December YE,
Market Cap - March YE
Second largest player in Paint Industry
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Consumer Thematic | Sector Report
Re-inventing the Consumption Wheel

With the ongoing Covid-19, the bigger consumer brands found opportunity to scale up their operations and reach a wider consumer base through their products. The selected companies have
outperformed the overall economy owing to their product nature, innovation, distribution network and brand value. Essential commodities were available across stores and people used to stock
food items in fear of shortage of availability. FMCG companies have upped their game during this period through speedy deliveries and wider variety of their products across the retail network. The
consumer companies have been proactive in communicating with the audience about their product relevance during such times. The companies have reached the audience through digital media and
social campaigns.
Launching Home Consumption products Communication focused on Hygiene and Immunity
Safety Assurance & Awareness Reaching out through new mediums
LKP Research 2
Demand for Essentials were at the peak during the pandemic owing to lockdowns across the nation. The selected companies have a strong foothold in the essential products such as nutrition,
health & hygiene, dairy among others. This helped the companies to outperform the overall FMCG industry in such times and retain the dominant position in the market.
BRITANNIA GODREJ CONSUMER

Products Revenue % Product Type Products Revenue % Product Type
Biscuits 77% Personal Wash 22%
Essentials Essentials (50%)
Bread and Rusks 8% Household Insecticide 28%
(90%)
Dairy 5% Hair Color 31% Semi-Essentials
Cakes and others 10% Semi-Essentials Air care 8% Non-Essentials
Others 11% (19%)
NESTLE
Products Revenue % Product Type DABUR
Milk Products and Nutrition (cereals for infants and milk products) 46% Products Revenue % Product Type
Essentials
Prepared dishes and cooking aids (noodles, pasta soups) 29% (75%) Health supplements (Honey, Chyawanprash, Glucose D) 19%
Beverages (RTD) 12% Digestives (Hajmola, Pudin Hara) 6% Essentials

Semi-Essentials
(25%) OTC and Ethical (Dabur Laal, Honitus) 9% (51%)
Confectionary (white and waffers) 13%
Oral care (Red paste, Meswak, Babool) 17%
HUL Juice, beverage and culinary 16% Semi-Essentials

Home care (Odonil, Odomos) 7% (23%)
Products Revenue % Product Type
Fabric wash 26% Hair care (Amla, Vatika, Anmol) 21% Non Essentials
Skin care (Fem, Gulabari) 5% (26%)
Soaps 19%
Tea 10%
Essentials
Shampoo 7%
(73%)
MARICO
Home Care 6% Products Revenue % Product Type
Oral Care 3% Coconut Oil 44% Essentials
Coffee 2% Saffola Edible Oil 21% (65%)
Ice cream 2% Semi-Essentials Saffola Oats 2% Semi- Essentials

Jams/Ketchup 2% (4%) Value Added Hair Oil (VAHO) 24%
Non Essentials
Skin Care 15% Non Essentials Premium Personal Care 5%
(33%)
Others 7% (22%) Others 4%
Source: Company, LKP Research
LKP Research 3
Consumer facing companies in the consumer food (CF) and household & personal products (H&P) industry were operational at a much higher capacity than the overall economy. The CF industry
revenue grew by c.3% in the Q1 and c.10% in Q2 on back of strong demand for essential items and higher in-house consumption foods. The net profit margins also expanded by 340bps yoy in the first
quarter owing to better product mix. Overall, for the consumer foods industry, Q1 was a game changing quarter due to reasons such as change in consumer preference towards high quality & reputed
brand products, increased consumption of ready to cook foods such as Maggie, pastas, etc. The H&P industry also shifted their focus towards health & hygiene products such as sanitizers, cleaners,
disinfectants, etc. The H&P companies were able to maintain their revenue to previous year levels with net profit margin expansion by 62 bps yoy. The flattish revenue growth was on account of lower
demand of discretionary sales including personal products and more focus towards essential items. The H&P industry recovered quickly in Q2 with new launches and better demand scenario. Margin
expansion was witnessed in the overall FMCG segment primarily due to benign raw material prices, cost optimization measures, supply chain management and value added product mix.
Consumer Food Industry Houshold & Personal Products
Sales EBIDTA % PAT % Sales EBIDTA % PAT %

25.0% c.3% 14,000 30.0% 20,000
20.4% 24.9%
21.2% 24.0% 24.2% 18,000
24.4% 24.2%
18.9% 18.6% 12,000 21.8% 23.5%
19.1% 25.0% 22.3%
20.0% 18.2% 22.3% 16,000
18.0% 17.9% 21.6%
17.5% 16.5%
10,000 14,000
20.0%
15.0% 19.3% 12,000
8,000
14.5% 17.8% 17.6% 17.3%
15.0% 17.0% 17.0% 10,000
13.2% 13.4% 16.2% 16.3%
15.3% 15.6%
12.5% 12.1% 6,000
10.0% 11.9% 8,000
11.0% 11.1%
10.3% 10.0%
9.6% 6,000
4,000
5.0% 4,000
5.0%
2,000
2,000
0.0% - 0.0% -
Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20
Source: Company, LKP Research Source: Company, LKP Research
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Companies have launched newer products related to Health, Hygiene and Immunity during CY2020.
Lifebuoy Domex Surf Excel Dabur

Laundry sanitizer & Germ Kill Spray Disinfectant & Germ removal wpes Amla Juice, Neem & Tulsi Juice
Anti germ wash
Dabur Savlon GCPL Dettol

Dabur: Tulsi & Haldi drops Hand wash & Wipes Protekt Power to liquid handwash & Masks Surface Disinfectants & Laundry Sanitizers
Creation of new categories Unrelated players leveraging the current trendsand launching their new product range
New category- Vegetable cleaners Savlon Hand Sanitizer Boroplus

Marico / Dabur / ITC Pen sanitizer Asian Paints / Berger Paints / Mediker Range of sanitizers & soaps by Emami
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Few changes in Consumer Preferences could be permanent

Year 2020 has made Hygeine products, Immunity Boosters and Healthcare products part of Home Food Consumption saw an increase during the lockdown with higher consumption of
the Essential Basket and in our view many of these changes in consumer preferences could be ready to cook products and increase in home cooking experiments through the help of social
permanent in nature. media.
Increase in Consumption of Hygiene & Immunity Products Spike seen in Cooking related content on Social Media during Mar-Jun’20
Dec'19 to Feb'20 Pre-covid Mar'20 Lockdown 3 &4, May'20 Unlock 1.0, June'20
300% 283% 24,319
250%
200%
13,237
150%
112%
100%
73% 4,794
55% 3,798
2,648
50% 39%
23% 24% 28%
10% 10%
0% 2%
0% Reloading Regional Convenience Gourmet Upcyle Food Cuisine Scratch Cooking
Chyavanprash Liquid Soaps Branded Honey Recipes Experimentation
Source: Nielson, Deloitte Consumer Tracker Source: Nielson, Deloitte Consumer Tracker
LKP Research 6
Strong Fundamentals driving through tough times

The selected companies have withstood decades of operations evolving into a well-known companies owing to their strong financial health and constant innovation throughout their journey. These
companies are market leaders in their own major segments continuously delivering new products and services to their customers. Few financial parameters evaluating their capital management,
profitability and liquidity will be discussed to better understand the company’s growth backbone.
Capital Management
These consumer companies have better capital management since majority of the companies gearing ratio is under 25%. In recent times, there has been a shift in the manufacturing model from Asset
Heavy to Asset Light focusing more on Branding and other key operations. Reduction in the manufacturing costs and elimination of major costs of setting up large factories has reduced the debt burden
on these companies. The companies earn more than sufficient profits to cover its short term liabilities as they have a cash rich business model resulting in lower external borrowings.
Gearing Ratio under 25% with Interest Coverage at higher levels
Gearing Ratio Interest Coverage

30.0% 120.00
109.51
25.0% 100.00
20.0% 80.38 80.00
15.0% 60.00
10.0% 29.06 37.89 40.00

34.63
23.32
5.0% 20.00
25.20
13.96 19.77
3.59
9.07
0.0% -
BRIT MARICO JUBIFOOD TATACONS NESTLE HUL CLGT DABUR GODREJCONS ASIAN BERGER
LKP Research 7
Healthy Return Ratios driven by well-established operational chain

FMCG sector is capital intensive requiring huge investments on building manufacturing capacities. Over the years, these companies have established strong manufacturing and sourcing capabilities
resulting in lower capital spends going forward. Adoption of asset light model has also helped the companies to reduce their overall operational & fixed costs and in turn increase their profitability.
Return ratios of these companies are higher owing to their minimum capital investments and higher profitability. Our selected companies generate ROE & ROCE ranging 20% to 100%. We expect the
cost of equity for the consumer company to be in range of 12-15% above which the company should generate returns to be considered profitable. Our selected companies generate ROE/ROCE way
above the expected cost of equity.
Healthy Return Ratios Strengthen Investor’s Cofidence
120.0% ROE ROCE
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
BRIT MARICO JUBIFOOD NESTLE HUL CLGT DABUR GODREJCONS ASIAN BERGER
Nestle and HUL generates very high ROE/ROCE of 102%/57% and 82%/90% respectively as compared to other consumer companies owing to their century long business operations and pan India
manufacturing base. A Higher ROE/ROCE provides investor’s confidence in the company’s valuation and growth prospects.
LKP Research 8
Efficient Working Capital Management

Consumer Companies focus on building a strong working capital system to maintain ample liquidity for its operational and financial needs. Majority of the companies in our consumer universe have an
efficient working capital management with cash conversion days of less than 60 and also negative conversion days. Lower cash conversion provides financial cushion to withstand uncertain financial
events such as the ongoing lockdowns. The terms of trade of majority of the companies are lower owing to better liquidity management resulting in higher operating cash flows.
The short term liquidity of these companies can also be judged by their current ratios. All the companies discussed in this report have a current ratio above 1x, indicating a decent liquidity scenario.
Efficient Working Capital Management
Trade payables Days Trade receivables Days Inventory Days Cash Conversion days
93
14 55 53
47 30
(2) (31) (3) (15)

(33)
Current Ratio maintained over 1x
4.0 2018 2019 2020

3.1
2.8 2.9
3.0 2.6 2.6
1.9 1.9 1.9 1.9 1.8 2.0

2.0 1.8 1.7 1.6 1.6 1.5
1.4 1.5 1.4 1.3 1.6 1.5
1.2 1.3 1.4 1.3 1.2 1.2
1.1 1.1 1.0 1.1 1.1
1.0
-
LKP Research 9
Matured Businesses with High Free Cash Flow

These companies generate higher free cash flows owing to lower capex requirement and better working capital management. The companies free cash flow to PAT is around 100% i.e. all the profits
generated by the company are available for distribution to the owners of the company. Also the CFO to EBIDTA of these companies is above 70% indicating an efficient cash flow management.
A 100% cash flow generation rate is considered to be exceptional as the company has sufficient cash for further expansion and growth along with dividend payments and other distributions. A high
cash flow conversion rate is one of the important criteria for investors to invest in the company which also justifies the valuation of these companies.
FCFF / PAT CFO/EBIDTA
FCFF/PAT CFO/EBIDTA
160.4% 90.0%
83.1% 83.1% 83.8%
80.5%
78.0% 77.4%
74.1% 73.7%
121.0% 68.3%
117.3%
63.2%
109.0% 110.6% 109.5%
101.7% 98.5%
90.7%
85.2%
53.0%
BRIT MARICO JUBIFOOD TATACONS NESTLE HUL CLGT DABUR GODREJCONS ASIAN BERGER BRIT MARICO JUBIFOOD TATACONS NESTLE HUL CLGT DABUR GODREJCONS ASIAN BERGER
Source: Company, LKP Research Source: Company, LKP Research
LKP Research 10
Having sufficient free cash flow provides the companies opportunity to distribute part of the cash as dividends to its shareholders. The companies discussed in this report have a good payout ratio
in line with their cash flow generation.
Dividend Payout (%)
167.4%
Dividend Payout %
93.3%
85.2%
79.8%
64.4%
60.0% 56.1%
54.1% 54.6%
36.7%
28.3%
LKP Research 11
ESG parameters are gaining importance across the investing community from nice-to-have to need-to-have basis over the past decade. ESG evaluates the company on three significant qualitative
metrics such as Environment, Social and Governance. Apart from performing well in terms of financials, the companies are required to have in place a good ESG framework. Our universe of companies
is well known for their ESG compliance adhering to all the stated norms with regards to environmental sustainability, social equality and efficient governance policies. Some of our selected companies
such as BRIT, Marico, HUL, CLGT, Dabur, GodrejCons and Asian paints are the part of Nifty 100 ESG index which includes India’s highly rated ESG compliant companies.
Broad ESG Metrics
• Environmental (E)
• Carbon intensity trend
• Waste management
• Renewable energy use
• Organic products
• Hazardoues products
• Social (S)
• Working condition policy
• Governance (G)
• Whistleblower programs
• Employ fatality rate
• Bribery & corruption policy
• Discrimination policy
• Responsible investment policy
• Employee training
• ESG Governance
• Health & Safety Mgmt
• Board diversify
• Financial Inclusion
LKP Research 12
Valuation of these companies has witnessed a multifold increase over the last nine years largely owing to P/E re-rating. Majority of the selected companies have generated significant wealth over last
few decades. The growth in the valuation of the companies is in line with the overall growth of the companies and we expect the momentum to continue going forward.
Earnings Growth P/E Growth During

Market Cap (Crs) Growth During FY12-20 PAT (Crs) P/E (x)
Company Name During FY12-20 FY12-20
2012 2020 24-Dec-2020 CAGR Growth 2012 2020 CAGR Growth 2012 2020 CAGR Growth
Britannia 3,532 64,521 87,152 44% 18.3x 200 1,403 28% 7x 18 46 13% 2.6x
Marico 5,074 35,429 51,819 27% 7x 317 1,021 16% 3.2x 16 35 10% 2.2x
Jubilant FoodWorks 3,822 19,319 35,731 22% 5.1x 103 280 13% 2.7x 37 69 8% 1.9x
Tata Consumer 6,945 27,126 55,385 19% 3.9x 356 460 3% 1.3x 20 59 15% 3x
Nestle* 39,424 1,41,808 1,79,009 17% 3.6x 962 1,970 9% 2x 41 72 7% 1.8x
Hindustan Unilever 88,743 4,96,653 5,64,422 24% 5.6x 2,791 6,748 12% 2.4x 32 74 11% 2.3x
Colgate-Palmolive 7,590 34,047 42,670 21% 4.5x 446 816 8% 1.8x 17 42 12% 2.5x
Dabur 18,573 79,473 90,943 20% 4.3x 645 1,445 11% 2.2x 29 55 8% 1.9x
Godrej Consumer 5,450 53,278 73,721 33% 9.8x 727 1,497 9% 2.1x 8 36 21% 4.7x
Asian Paints 31,145 1,59,605 2,54,020 23% 5.1x 989 2,705 13% 2.7x 32 59 8% 1.9x
Berger Paints 1,314 48,349 71,001 57% 36.8x 180 658 18% 3.7x 7 74 33% 10.1x
*2011-2019 - December YE
Market Cap - March YE
LKP Research 13
On Growth Trajectory Superior Return Profile Negative Working Capital Days indicating an efficient managment
15,000 20.0% Trade payables Days Trade receivables Days
Revenue From Operations (Rs in Crs) 58.1% ROE ROCE Inventory Days Cash Conversion days
58.9%
EBITDA Margin 15.7% 15.9%
15.0%
PAT Margin 41.7%
55.6% 1
14.1% 13.7% 15.0% 42.6%
46.4% 10 3
10,000 12.0% 6
42.3% 26
10.8% 10.5% 39.9% 24 23
10.0% 32.3%
8.9% 9.5% 55.3% 28 18 19 26
9.6% 10.0% 22 11 13
8.6% 48.8% 46.5% 49.6% 22 10
6.7% 6 7 7
39.4% 7 6
5.6% 32.8% 31.7% 7
5,000 5.6% 29.5% 27.2% 36 38
29 32 33 30 35
4.1% 5.0% 25 23
3.6%
-1 -7 -7 -1 -2
5,485 6,185 6,913 7,858 8,397 9,054 9,914 11,055 11,600
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
BRITANNIA INDUSTRIES
2012 2013 2014 2015 2016 2017 2018 2019 2020
Gearing Ratio Under Control FCFF to Net Income Maintained around 100% CFO/EBIDTA conversion Ratio
151.8%
37.9% 107%
30.3% 83%
108.0% 109.0% 79% 79% 81%
25.4% 99.9% 76%
95.3% 68% 67%
79.7%
15.6%
46.8% 35%
10.1%
5.6% 5.0% 22.2%
4.1% 3.1% 4.4%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Valuation Trend Increase in Direct Reach (in Lakhs)

No of Outlets
Stock price P/E EV/EBITDA 22.3
21 19.7
3,500 64.0 70.0
12.6 15.5 18.4 √ Market leader in the Biscuit Industry
7.3 10
3,000 46.1 60.0 √ Strong Revenue and Margin Growth History
2,500 42.7 50.0
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Sep-20 √ Efficient Capital Allocator with Negative Working capital
35.6
2,000 40.0
29.7 √ R&D and Innovation Focused Company
1,500
19.5
22.9 30.0 Rural Distribution (in '000s
18.8
1,000
17.7
14.9 15.8 20.0
√ ESG Compliant
12.1 12.8
13.3 19.9 No of RPDs (Rural Preferred Dealers)
11.8 8.0 8.1 22
500 10.0 14
18 19 √ Wealth Generator over the last 8 years
148 131 211 540 672 844 1,243 3,086 2,689 7 8 10
- - √ Moat - Lowest cost operations and Powerful Brands
2012 2013 2014 2015 2016 2017 2018 2019 2020
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Sep-20
LKP Research 14
Continuous Expansion Accretive Returns Stable Working Capital Days
Revenue From Operations (Rs in Crs) ROE ROCE Trade payables Days Trade receivables Days
8,000 30.0%
EBITDA Margin Inventory Days Cash Conversion days
PAT Margin 48.7%
44.6% 39.1% 43.0%
20.0%
37.6% 39.0% 49 59 49 47
6,000 38.6% 52
19.5% 46
17.3% 17.9% 18.1% 20.0%
15.7% 40 31
15.2% 15.4% 14.3% 22.7% 39
12.2% 13.6% 13.7% 87 69
4,000 13.1% 20.4% 70
10.7% 12.0% 37.0% 35.9% 34.9% 38.0%
34.5% 77
10.2% 32.1% 32.5% 66 68 62 56
8.8% 28.2% 63
8.1% 10.0%
20.5% 20 26 27
2,000 16 17 15 15
19 11
38 39 36 41 43 47 47 49
3,980 4,596 4,687 5,733 6,017 5,918 6,322 7,334 7,315 33
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Declining Gearing Ratio Adding to Margins FCFF to Net Income Maintained around 100% CFO/EBDITA Conversion Ratio
121.0%
107.5% 104.5% 97.4% 102.3% 101.7% 90%
39.5%
83% 80% 83%
68.1% 76% 78%
53.4%
69%
MARICO
28.2% 27.4%
56%
46%
15.4% 2012 2013 2014 2015 2016 2017 2018 2019 2020
9.3% 10.8% 10.5% 9.9%

7.0%
-142.2%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price & Valuation Trend
Stock price
400 P/E 60.0
√ Amongst the Market leader in the Hair and Edible oil and only
EV/EBITDA 51.7
350
44.3
47.6
50.0
player with nation-wide reach
300 40.1
√ Fastest Operating Profit growth at a CAGR of 20-22% in last 15-
37.2
34.7 40.0
250 32.8 33.6 20 years
21.7 30.1
200 24.2 30.0 √ Strong Revenue and Margin Growth History
150 16.7 17.0
13.9
20.0 √ Efficient Capital Allocator with focus on core portfolio
14.5
100 12.2 11.6
9.3 10.0 √ ESG Compliant
50
43 52 52 96 244 295 326 347 275
√ Moat – Loyal Customer base for its Parachute hair oil brand
- -
2012 2013 2014 2015 2016 2017 2018 2019 2020
LKP Research 15
Revenue CAGR of c.18% with Recovery in Margins Recovery in Returns Post Cost Optimization Measures Healthy Working Capital Days Maintained
Revenue From Operations (Rs in Crs) Trade payables Days Trade receivables Days
6,000 30.0% ROE ROCE
50.5%
PAT Margin
22.3% 42.5% 9 8 8
18.4% 7 6 7 8 8 9
37.3% 2 2 2 2 3 2
4,000 17.1% 16.8% 20.0% 2 2 2
14.4% 14.6% 30.2% 29.6% 23.0% 45 44 44 47 43
12.2% 41 36 38 42
10.8% 22.5%
34.9%
10.1% 9.3% 9.3% 30.5% 17.6%
2,000 8.9% 7.1% 10.0% 25.2% 24.8%
6.5% 21.5% 20.3% -30 -35 -34 -34 -37 -32 -31
6.8% 17.2% 11.5% -32 -27
5.3% 12.7%
4.0% 2.2% 7.2%
1,019 1,414 1,736 2,093 2,438 2,583 3,018 3,563 3,927
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
JUBILANT FOODWORKS
Gearing Ratio Turnaround Free Cash flows Conversion CFO/EBDITA Maintained above 80%
108%
167.2% 160.4%
89% 90% 93%
86% 84% 83%
80%
ZERO DEBT COMPANY
95.9% 71%
27.8% 31.1%
7.3%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020
-32.6% -23.5% -34.0%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Valuation Trend
1,600 Stock price P/E EV/EBITDA 80.0

69.4 √ Most loved Pizza Chain brand with nation-wide reach
1,400 63.2
70.0
59.6
1,200 60.0 √ Region Specific Product launches
1,000 43.6 43.4 50.0
37.1 39.1 √ Strong focus on Hygiene, quality and quick service
800 29.4 40.0
31.0 30.9
600 21.4 30.0 √ Efficient Capital Allocator with Negative Working capital
20.3 16.7 18.8 15.0 17.1
400 13.9 15.8 20.0
√ ESG Compliant
200 10.0
294 312 266 370 319 277 581 1,444 1,471
- - √ Moat – Domino’s Brand Power and Consistent Quality
2012 2013 2014 2015 2016 2017 2018 2019 2020
LKP Research 16
Revenue & Margin Trend Return Ratios Expected to Improve Post Merger Gradual Reduction in Working Capital Days
EBITDA Margin ROE ROCE
13.4%
Inventory Days Cash Conversion days
15,000 PAT Margin 12.3%
15.0% 10.3%
11.7% 10.8% 8.8% 141
9.4% 10.5% 9.7% 9.6% 9.9% 8.1% 8.9% 8.7% 81 105 117 122 114 116
8.3% 129
8.2% 10.0% 93
6.7% 7.5%
10,000 6.1% 6.6% 6.3%
6.3% 6.4%
4.8% 9.1% 9.3% 8.7% 147 162
7.9% 174 176 185 168 159
3.4% 5.0% 7.3% 7.3% 162
5.0%
6.2% 129
5,000 -0.6% 3.3% 36 35 31 28 32
0.0% 33 35 34 35
-0.6%
102
TATA CONSUMER PRODUCTS
6,640 7,351 7,738 7,993 6,637 6,780 6,815 7,252 9,637 93 88 82 77 85 77 67 71

- -5.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Gearing Ratio under Control Volatile FCFF to Net Income CFO/EBDITA (%)
94%
17.1% 6190.8%
16.6% 84%
15.3%
13.6%
11.4% 11.6% 11.8% 56% 55%
9.7% 45% 42%
7.3%
27%
22%
151.4% 29.5% 18%
78.0% -3.3% 99.4% 46.6% -34.2% 110.6%
2012 2013 2014 2015 2016 2017 2018 2019 2020

2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price & Valuation Trend Products

Stock price P/E EV/EBITDA
350 19.5 21.2 19.3 37.1 24.4 33.0 31.5 59.1 200.0
√ Iconic market leading brands and wide consumer reach
300 -
11.4 10.7 13.2 13.0 12.3 12.3 19.2 16.5 20.7 √ Significant Increase in Synergy Post Merger
-200.0
250
-400.0
200
√ Playing the In-home consumption theme
-600.0
150 -800.0
√ Efficient Capital Allocator
-1,000.0
100
-1,386.2 -1,200.0
50
√ ESG Compliant
112 128 150 149 121 151 259 204 295
-1,400.0
- -1,600.0 √ Moat – TATA Brand
2012 2013 2014 2015 2016 2017 2018 2019 2020
LKP Research 17
HIgh Single Digit Revenue Growth with Margin Expansion Superior Return Profile Healthy Working Capital Days
15,000 EBITDA Margin 30.0% Inventory Days Cash Conversion days
PAT Margin 56.9%
23.2% 23.1%
6 9
19.7% 21.3% 20.8% 20.0% 20.6% 17
18.7% 19.5% 12 7 8 38
10,000 20.0% 43.8%
15.9% 31
39.2% 35 36 32
14.2% 34.2% 39.9% 40.8% 35 32 29 30 4 4
12.5% 12.4% 11.9% 10.6%
12.0%
32.9% 3 3
11.6% 30.3% 101.9% 4
5 4 3 4
5,000 10.0% 28.6%
35 40 44
75.5% 25 26 32 31
6.6% 23 23
59.4%
47.2% 41.8% 43.7%
7,515 8,335 9,101 9,855 8,175 9,141 10,010 11,292 12,369 35.8%
20.0% 30.5% 0 -5 -3
- 0.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 2018 2019
Virtually Debt Free Company High Free Cash Flow Generation HIgh Accounting to Cash Profits
Gearing Ratio FCFF to Net Income 92% 92%

43.2% 87%
199.2% 81%
76% 79% 78% 78%
36.9%
NESTLE
33.4% 69%
133.5% 126.9% 140.9% 147.3% 140.9%
121.0%
61.5%
CFO/EBDITA (%)
0.7% 1.0% 1.0% 0.9% 2.7%
0.6% -47.6%
2011 2012 2013 2014 2015 2016 2017 2018 2019
2011 2012 2013 2014 2015 2016 2017 2018 2019
2011 2012 2013 2014 2015 2016 2017 2018 2019
Price and Valuation Trend Margin Expansion is a continuous process
16,000 Stock price P/E EV/EBITDA 120.0

99.8
EBIDTA Margin √ Market leader in Baby Foods and Infant Nutrition
14,000
100.0
12,000 √ Strong brand penetration in all the product categories
72.4
66.5 80.0
10,000 61.9
8,000 52.0 58.0
49.4 60.0
41.1 45.7
45.1
6,000 35.5 40.2
35.2 31.0 40.0 √ ESG Compliant
26.7 30.0
19.10%
20.40%
21.20%
19.10%
23.50%
24.80%
25.80%
24.60%
25.20%
21.20%
25.50%
24.10%
23.60%
21.90%
24.10%
24.90%
25.40%
26.5 26.3
4,000
20.0 √ Unmatched R&D capabilities
2,000
4,095 4,992 5,289 6,385 5,828 6,028 7,871 11,085 14,785
3QCY16
3QCY20
4QCY16
1QCY17
2QCY17
3QCY17
4QCY17
1QCY18
2QCY18
3QCY18
4QCY18
1QCY19
2QCY19
3QCY19
4QCY19
1QCY20
2QCY20
- -
2011 2012 2013 2014 2015 2016 2017 2018 2019 √ Wide distribution and retail network
LKP Research 18
Revenue & Margins are on Expansionary mode Best in Industry Return Ratios Negative Working Capital Days Maintained
60,000 30.0%
EBITDA Margin 24.8% Inventory Days Cash Conversion days
PAT Margin 22.6% 115.2%
20.7% 106.9% 111.7%
40 35 35 25
40,000 17.3% 20.0% 24 25
15.3% 16.0% 17.6% 17.0% 91.5% 89.9% 31 29 26
14.2% 14.8% 15.4% 78.1% 84.9% 13 13 12 13 17 11
14.4% 78.5% 77.3% 11 13 11
12.8% 12.9% 12.5% 134.0%
12.0% 111.8% 108.6%
13.5% 72 68 69 59 60 63 72 67 69
20,000 10.0% 76.1% 77.0% 82.1%
11.4% 63.2% 66.6% 71.8%
-20 -21 -22 -18 -18 -26 -34 -26 -33

23,436 27,004 29,234 31,972 32,303 33,252 35,550 39,311 39,783
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
HINDUSTAN UNILEVER
Debt Free Company High Free Cash flow generation HIgh Accounting to Cash Profits
Gearing Ratio
106.7% 103.2% 109.2% 109.5%
102.0% 84% 86% 82%
3.9% 81% 81% 77%
87.3% 90.2% 91.4%
85.9% 69%
65%
61%
2.6%
1.3% 1.2%
1.1% CFO/EBDITA (%)
0.9% FCFF to Net Income
0.0% 0.0% 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Valuation Trend With category leadership in >90% of their business
√ Market Leader in >90% of Business
Stock price P/E EV/EBITDA
2,500 73.6 80.0 √ Extensive Market Reach
60.9 70.0
2,000 √ Multiple brands straddling at several price points
55.2 60.0
43.3 45.2 √ Return Profile - Best in Industry
1,500 44.0 50.0
31.8 33.2 49.9 40.0
√ Among the leading Wealth Generators over the last 8 years
1,000 26.4 41.1
38.0 30.0
34.5 30.8 31.0 √ Efficient Capital Allocator with Negative working capital
27.3 20.0
500 25.0 23.6
10.0 √ ESG Compliant
410 467 606 874 870 912 1,333 1,707 2,299
- -
2012 2013 2014 2015 2016 2017 2018 2019 2020 √ Moat – Market Leading Brands, low cost operations and R&D
LKP Research 19
Revenue & Margins Uptrend Return Ratios Higher than Industry Average Negative Working Capital Days Maintained
Revenue From Operations (Rs in Crs) ROCE ROE Trade payables Days Trade receivables Days
129.9% 131.8%
27.7%
6,000 PAT Margin 26.6% 30.0%
25.7% 104.7% 19 20
28 20 24 24
20.6% 21.6% 93.4% 22 24
9 22 17 17
19.8% 19.4% 20.9% 11 5 9 10 11
17.5% 102.5% 101.5% 6
4,000 20.0%
90.0% 59.4%
48 51 48 44 46 48 52 50 49
53.6% 51.2%
17.4% 18.0% 72.6% 42.8%
15.9% 14.9% 15.6% 44.2%
2,000 14.2% 13.2% 13.4% 10.0% 56.4%
12.8%
45.3% -8 -22 -21 -17 -13 -14 -16 -13 -15
33.9% 36.4%
2,693 3,164 3,579 3,982 3,868 3,982 4,188 4,462 4,525 30.4%
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
COLGATE-PALMOLIVE
ZERO DEBT COMPANY HIgher Free Cash flow generation Higher Conversion of Accounting to Cash Profits
FCFF to Net Income CFO/EBDITA (%)

Gearing Ratio
5.1% 122.1% 117.3% 94%
105.3% 78% 80%
73% 73% 74%
70% 69%
79.0% 62%
74.9% 72.8%
65.1% 60.6%
42.6%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Valuation Trend # 1 Toothpaste brand in 5/8 segments
Stock price P/E EV/EBITDA √ Market Leader in majority of the toothpaste segments
1,400 46.9 44.1 50.0
42.7 41.7 √ Almost 100% product penetration with nation-wide reach
1,200 38.9
40.0
1,000 √ Periodic New product launches on back of innovation and
28.4 28.0
800 24.5 25.4 27.4 30.0 renovation
23.8
17.0 17.3
600 17.0 20.0 √ Efficient Capital Allocator and Liquidity Management
16.3
400 12.2 13.6
12.6
200
280 310 343 504 831 995 1,057 1,258 1,253
- -
√ Moat – Trusted Brand in Oral Care and low cost operations
2012 2013 2014 2015 2016 2017 2018 2019 2020
LKP Research 20
Revenue and Margin Trend Healthy Return Ratios Maintained Stable Working Capital Days
ROE ROCE Inventory Days Cash Conversion days
EBITDA Margin 34.3%
10,000 PAT Margin 25.0% 25.3% 28.0%
30.3% 26
20.9% 20.4% 20.6% 29.7% 27 29 30
19.3% 19.6% 28.1% 29.6% 28 21
8,000 16.6% 20.0%
15.9% 16.3% 26.2% 26.2% 55 36 27
16.1% 59
51 52 56 58
6,000 17.5% 16.9% 15.0% 50
15.9% 16.6% 16.6% 37.5% 36.5% 45
34.4% 50
31.9% 30.1%
56
4,000 13.5% 10.0% 38 31 33 36 34
12.0% 12.3% 12.8% 26.4%
23.8% 25.7% 35 33
21.9% 28
32
2,000 5.0%
56 62 62 66 62 62
5,305 6,169 7,075 7,827 7,780 7,614 7,722 8,515 8,685 42 51
33
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020
2012 2013 2014 2015 2016 2017 2018 2019 2020
Efficient Capital Management Higher Free Cash flow Generation HIgh Accounting to Cash Profits
DABUR INDIA
Gearing Ratio FCFF to Net Income

95%
100.9% 98.2% 88% 86% 90%
38.3% 91.5% 91.7% 80% 81%
35.3% 85.2% 78%
83.3% 80.5% 69%
77.8% 67%
70.2%
21.0%
17.9%
15.9% 15.7%
12.6%
8.5% CFO/EBDITA (%)
6.6%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Valuation Trend Strong ESG Focus
Stock price P/E EV/EBITDA √ World leader in Ayurveda with a portfolio of over 250 Herbal/
500 55.0 60.0 Ayurvedic products.
50.1
43.8
50.0 √ Global Footprint
400 42.7
31.3 34.3 35.1 38.3 40.0 √ Highest rural sales contribution amongst peers
300 44.2
28.8 41.6
35.8 36.1 30.0 √ Efficient Capital Allocator
32.8
200 29.3
25.0
27.2 20.0 √ Wealth Generator over the last 8 years
22.4
100
107 137 180 266 250 277 328 409 450
- - √ Moat – Leading player in healthcare (immunity booster) and
2012 2013 2014 2015 2016 2017 2018 2019 2020
personal care segment
LKP Research 21
Revenue and Margin Uptrend Improving Return Ratios Improving Stable Working Capital Days
15,000 Revenue From Operations (Rs in Crs) 30.0% Trade payables Days Trade receivables Days
ROCE ROE
PAT Margin 22.7% 21.7%
20.9% 26.8% 26.1%
25.5% 24.7% 11 14
18.8% 19.8% 17
10,000 17.3% 20.0% 21.7% 22.7% 22.8%
14.9% 16.1% 20.7% 18.9% 36 41 39 27
15.0% 27 58 55 63
34
15.1% 16.4% 19.5% 20.7% 20.7% 58 55 54
15.1% 20.1% 57 50
18.9% 18.2% 18.7% 46 46 43
13.6% 17.8% 46
5,000 12.8% 10.0% 16.2%
11.4% 40 47 39
35 34
GODREJ CONSUMER PRODUCTS
10.5%
9.5% 34
86 90 91
56 57 58 46 62 65
4,866 6,416 7,602 8,276 8,424 9,268 9,847 10,314 9,911
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Declining Gearing Ratio High Free Cash Flow Generation High Accounting to Cash Profits
Gearing Ratio
132.3% CFO/EBDITA (%)
125.8% 126.4%
127%
38.1% 38.7% 109.8%
35.1% 35.6% 98.0% 98.5%
32.7% 88.3% 95% 98%
29.9% 28.8% 28.4% 78.5% 83% 83% 81%
25.2% 75% 74%
52%
41.9%
FCFF to Net Income
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Valuation Trend Balanced Global Trade - Revenue Mix
Stock price P/E EV/EBITDA Domestic International √ Market leading position in core portfolio across key geographies
800 35.6 40.0
700 30.4
33.8 35.0 √ Global footprint with business in 21 countries
40.7%
42.2%
42.4%
43.3%
44.0%
44.7%
44.7%
45.1%
45.6%
45.8%
45.9%
600 30.0
47.1%
48.3%
√ Democratizing hygiene portfolio through innovative launches
500 29.9 25.0
18.9 24.6
and disruptive pricing
25.6
400 14.6 20.0
300 12.8 13.0
15.0 √ Efficient Capital Allocator
59.3%
11.1
57.8%
57.6%
56.7%
56.0%
55.3%
55.3%
54.9%
54.4%
54.2%
54.1%
52.9%
51.7%
7.5
200 10.0
10.1 9.5
10.7 11.2 √ ESG Focused Company
100 9.2 5.0
7.4
53 86 95 116 153 186 486 686 521
√ Moat – Godrej Brand, Focused R&D approach and Geographically
Q2FY21
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY20
Q2FY20
Q3FY20
Q4FY20
- - Q1FY21
2012 2013 2014 2015 2016 2017 2018 2019 2020 diversified
LKP Research 22
High Single Digit Revenue growth and Margin Expansion Superior Return Ratio Stable Working Capital Days
30,000 Revenue From Operations (Rs in Crs) 30.0% ROCE ROE Trade payables Days Trade receivables Days
42.0%
PAT Margin 39.3%
19.4%
20.5% 37.5% 47 50
36.0% 55
17.5% 18.5% 33.3% 32.4% 39 41 37 46
20,000 17.7% 20.0% 30.9% 44
14.4% 29.3% 37
14.4% 14.3% 14.3% 37.1%
34.3% 56 59
31.3% 56 55 54 56 61
30.1% 53
27.6% 27.4% 46
13.7% 26.5% 24.9% 23.3%
10,000 10.0% 37 36
11.4% 11.8% 12.1% 11.4% 27 30 29 31 32
9.7% 9.6% 28 27
9.0% 9.1%
44 44 45 36 36 41 46 45 38
9,632 10,939 12,715 14,183 14,271 15,397 16,887 19,350 20,263
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Improvement in the Gearing Ratio Higher FCFF Generation Higher Operating Cash flow conversion rate
ASIAN PAINTS
FCFF to Net Income

Gearing Ratio CFO/EBDITA (%)
89.7% 90.7%
10.4% 83.1%
81%
68% 70% 66%
7.6% 59.7% 66% 63%
57.5%
6.3% 6.4% 53.1% 53% 51%
5.6% 5.9% 45.1% 46.0% 46%
5.3%
4.2%
3.1%
19.2%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Valuation Trend
Stock price P/E EV/EBITDA √ Largest Paint Company in India

1,800 66.4 70.0
59.1 √ Products catering to All Income Groups
1,600 55.8 60.0
53.1 52.7
1,400 47.7 √ Superior technology driven company focused on integrating
43.1 50.0
1,200 42.3 Supply Chain Management (SCM) and Enterprise Resource
31.5 40.0 Planning (ERP)
1,000
800 34.8 38.1 38.3 30.0 √ Amongst the leading Wealth Generator over the last 8 years
34.0 33.5
600 29.9
26.9 26.2 20.0 √ Efficient Capital Allocator
400 20.4
200 10.0 √ ESG Focused Company
324 492 548 811 868 1,074 1,120 1,493 1,667
- - √ Moat – Technology, Customer Database and Asian Paints
2012 2013 2014 2015 2016 2017 2018 2019 2020 Brand
LKP Research 23
Revenue and Margins on Expansionary road Consistent Return Ratios Improving Working Capital Days
8,000 Revenue From Operations (Rs in Crs) 20.0% Trade payables Days Trade receivables Days
ROCE ROE
PAT Margin 15.3% 15.4% 30.0%
13.7%
51 55 53
6,000 14.2% 15.0% 24.4% 54
23.0% 23.4% 24.7% 55 47
22.1% 22.4% 63 64 53
10.7% 21.0%
10.1% 10.1% 20.2% 70
9.5% 23.7% 24.9% 68 74 73
4,000 10.0% 22.7% 22.9% 22.3% 60 57
10.3%
21.0% 20.5% 18.8% 19.4% 63 63 55
9.4% 48
8.7% 40 41
7.9% 8.1%
42 43 42
2,000 5.0% 41 41 41
5.6% 6.0% 5.9% 5.6%
52 55 66 60 61
2,948 3,346 3,870 4,322 4,223 4,552 5,166 6,062 6,366 41 40 47 43
- 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Gearing Ratio under control Lower Free Cashflow conversion as compared to Peers Healthy Operating Cash flow to operating profits
BERGER PAINTS
Gearing Ratio FCFF to Net Income CFO/EBDITA (%)

36.6% 129.4% 93%
32.0% 32.6%
30.1% 81%
90.7% 72%
65% 68%
65.1% 58%
53.0% 55% 52%
17.6% 43.5% 41.5% 39.1%
16.5% 16.1% 16.5% 16.7% 34.0%
32%
2012 2013 2014 2015 2016 2017 2018 2019 2020
-34.1%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020
Price and Value Trend
Stock price P/E EV/EBITDA √ 2nd Largest Paint Company in India

600 73.5 80.0
63.6
√ Global Footprint
70.0
500
54.1 60.0 √ High Quality product with strong R&D capabilities
400 49.6 45.9
39.0
50.0 √ Sole supplier of protective coatings to Nuclear Power Plants
300 32.7 33.9 40.0 √ Amongst the leading Wealth Generator over the last 8 years
33.1 30.0
200 19.3 29.2 31.2 √ Efficient Supply Chain
19.1
12.7 26.8 20.0
100 11.1 11.4
10.0
7.3 38 70 82 149 175 242 257 324 498
- - √ ESG compliant
2012 2013 2014 2015 2016 2017 2018 2019 2020
√ Moat – Berger Paints Brand and Technology
LKP Research 24
DISCLAIMERS AND DISCLOSURES

LKP Sec. ltd. (CIN-L67120MH1994PLC080039, www. Lkpsec.com) and its affiliates are a full-fledged, brokerage and financing group. LKP was established in 1992 and is one of India's leading brokerage and distribution house. LKP is a corporate trading
member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited(NSE), MCX Stock Exchange Limited (MCX-SX).LKP along with its subsidiaries offers the most comprehensive avenues for investments and is engaged in the
businesses including stock broking (Institutional and retail), merchant banking, commodity broking, depository participant, insurance broking and services rendered in connection with distribution of primary market issues and financial products
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or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
Other disclosures by LKP and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject company(s) covered in this report-:
Research Analyst or his/her relative’s financial interest in the subject company. (NO)
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LKP Research 25

Consumer Thematic Report LKP Dec20

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Consumer Thematic Report LKP Dec20

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27-Dec-2020 Sector Report

Colgate-Palmolive 7,590 34,047 42,670 21% 4.5x

Meet Jain | meet_jain@lkpsec.com

Re-inventing the Consumption Wheel

Launching Home Consumption products Communication focused on Hygiene and Immunity

Safety Assurance & Awareness Reaching out through new mediums

BRITANNIA GODREJ CONSUMER

Beverages (RTD) 12% Digestives (Hajmola, Pudin Hara) 6% Essentials

HUL Juice, beverage and culinary 16% Semi-Essentials

Ice cream 2% Semi-Essentials Saffola Oats 2% Semi- Essentials

Source: Company, LKP Research

Consumer Food Industry Houshold & Personal Products

Sales EBIDTA % PAT % Sales EBIDTA % PAT %

Source: Company, LKP Research Source: Company, LKP Research

Lifebuoy Domex Surf Excel Dabur

Dabur Savlon GCPL Dettol

New category- Vegetable cleaners Savlon Hand Sanitizer Boroplus

Few changes in Consumer Preferences could be permanent

Strong Fundamentals driving through tough times

Gearing Ratio under 25% with Interest Coverage at higher levels

Gearing Ratio Interest Coverage

20.0% 80.38 80.00

10.0% 29.06 37.89 40.00

Source: Company, LKP Research

Healthy Return Ratios driven by well-established operational chain

Healthy Return Ratios Strengthen Investor’s Cofidence

120.0% ROE ROCE

Source: Company, LKP Research

Efficient Working Capital Management

Efficient Working Capital Management

(2) (31) (3) (15)

Current Ratio maintained over 1x

4.0 2018 2019 2020

1.9 1.9 1.9 1.9 1.8 2.0

Matured Businesses with High Free Cash Flow

FCFF / PAT CFO/EBIDTA

Source: Company, LKP Research Source: Company, LKP Research

Dividend Payout (%)

Source: Company, LKP Research

Broad ESG Metrics

Earnings Growth P/E Growth During

Nestle* 39,424 1,41,808 1,79,009 17% 3.6x 962 1,970 9% 2x 41 72 7% 1.8x

2012 2013 2014 2015 2016 2017 2018 2019 2020

Price and Valuation Trend Increase in Direct Reach (in Lakhs)

Continuous Expansion Accretive Returns Stable Working Capital Days

9.3% 10.8% 10.5% 9.9%

Price & Valuation Trend

-32.6% -23.5% -34.0%

Price and Valuation Trend

1,600 Stock price P/E EV/EBITDA 80.0

6,640 7,351 7,738 7,993 6,637 6,780 6,815 7,252 9,637 93 88 82 77 85 77 67 71

2012 2013 2014 2015 2016 2017 2018 2019 2020

Price & Valuation Trend Products

Gearing Ratio FCFF to Net Income 92% 92%

Price and Valuation Trend Margin Expansion is a continuous process

16,000 Stock price P/E EV/EBITDA 120.0

-20 -21 -22 -18 -18 -26 -34 -26 -33

FCFF to Net Income CFO/EBDITA (%)

0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Price and Valuation Trend # 1 Toothpaste brand in 5/8 segments

Gearing Ratio FCFF to Net Income

Price and Valuation Trend Strong ESG Focus

FCFF to Net Income

Price and Valuation Trend Balanced Global Trade - Revenue Mix