CHAPTER – II

INDUSTRY AND SAMPLE

COMPANY PROFILE
2.1 INTRODUCTION

The objective of this chapter is to go give information regarding FMCG industry

on which this project is based on. It will provide the basic over view on the
FMCG industries, what are the products that are included as FMCG goods and
what is the market size of the products and how much this industry adds to the
GDP of our country.

We will also go through the various companies that operates in the FMCG
industry which are taken as a sample for completion of this project.

2.2 FMCG Industry : An Overview

Fast-Moving Consumer Goods which are also known as Consumer packed
goods are the products sold quickly and is relatively and at a cheaper price.
Examples include non-durable house hold goods such as packaged foods,
beverages, toiletries, candies, cosmetics, over the counter goods, dry goods
and other consumables.

FMGCs have a short shelf life because of low consumer demand or because of
they are perishable in nature. These goods are purchased frequently and
consumed rapidly and these are priced low and are sold in large quantities .

Because fast moving consumer goods have a high turnover rate the market is
not only large but is also very much competitive, companies need to focus
their efforts on marketing the FMCG goods to influence and attract their
customers to buy their products. FMCGs are sold in large quantities that is why
they are considered as reliable source of revenue. The high volume of sales
also lowers the profit margin on per unit sold.
FMCG in INDIA

The FMCG industry is the fourth largest sector in the Indian Economy. House
hold and personal care products accounts to the 50% of the sector , health
care accounts to 31-32% of the industry and the food & Beverage industry
accounts to the remaining 18-19% of the industry.

In the last 10 years , the revenue in FMCG industry in India has been growing at
the rate of 21.4% . There was a drastic change revenues in FMCG sector
growing from US$ 31.6 billion to US$ %2.8 billion from 2011 to 2017-18
respectively. FMCG industry in India is expected to grow at a rate of 27.9%
CAGR to sum to US$ 103.7 billion by 2020. Additionally the rural FMCG market
is projected to grow at CAGR of 14.6% to reach US$ 100 by 2020 and US$ 220
billion by 2025. The rural setting accounted for 45% of revenue share while the
urban setting dominates with share of 55% of the total revenue of the
Industry. More than 65% of people in India stay in rural places and those
people spend around 50% of their total expenditure in FMCG products . The
number of people buying consumer goods online is projected to reach 850
million by 2025.

Company’s Name Market Share(%)

ITC 14%
Hindustan Unilever 12%
Nestle 3%
Britannia 3%
Dabur 2%
Godrej Group 2%
Marico 5%
2.3 Sample Company: Any Overview

1- Hindustan Unilever
Company Type – Public Company, Traded as – BSE: 500696; NSE: HINDUNILVR
Industry – Consumer Goods, Founded – 1933, Key People – Sanjiv Mehta (CEO)
Headquarters - Mumbai Number of Employees – 21,000 (2020)
2- Nestle INDIA
Company Type – Public Company, Traded As- BSE: 500790; NSE: NESTLEIND
Industry- Food Processing, Founded- 28 March 1959 .
Key People – Suresh Narayanan (CMD) , David Steven McDaniel (CFO)
Headquarters- Gurgaon, Haryana, India Number of Employees – 7,649
3- DABUR
Company Type – Public company, Traded as- BSE: 500096; NSE: DABUR
Industry – Consumer goods, Founded- 1884
Key People – Amit Burman (Chairman), Mohit Malhotra (CEO)
Headquarters – Ghaziabad, Uttar Pradesh, India No. Of Employees- 7,740
4 – ITC Limited
Company Type- Public Company, Traded as- BSE: 500875, NSE:ITC
Industry- Conglomerate, Founded – 24 August 1910
Key People- Sanjiv Puri (Chairman&MD)
Headquarters- Kolkata, India No. of Employees- 27,279
5- Britannia Industries
Company Type- Public Company, Traded as- BSE: 500825; NSE: BRITANNIA
Industry- Food Processing, Founded- 1892
Key People- Nusli Wadia (Chairman), Varun Berry (MD)
Headquarters- Kolkata, West Bengal No. Of Employees- 4,480
6- Godrej Industries
Company Type- Public Company, Traded as- BSE: 500164; NSE: GODREJIND
Industry- Chemicals, Founded - 1963
Key People- Adi Godrej , Jamshyd Godrej, Nadir Godrej
Headquarters- Mumbai, Maharashtra
7-Marico
Company Type- Public Traded As- BSE:531642; NSE: MARICO
Industry- Consumer Goods Founded- 2 April 1990
Founder- Harsh Mariwala(Chairman) Key People- Saugata Gupta (MD & CEO)
Headquarters – Mumbai, Maharashtra No. Of employees- 1,631
8- GlaxoSmith Kline
Company Type- Public Company Traded As- BSE: 500660; NSE;GSKCONS
Industry- Pharma & Healthcare Founded- 13 November 1924
Key People=- Mr. Sridhar Venkatesh (MD)
Headquarters- Mumbai, Maharashtra No. Of Employees- 3500
9- Varun Beverages
Company Type- Public Company Traded as—BSE: 540180; NSE: VBL
Industry – Beverages Founded – 1985
Key people- Ravi Jaipuria (Founder/Chairman) Headqurters- Gurgaon , Haryana
10- Colgate Palmolive
Company Type- Public Company Traded As- BSE: 500890; NSE: COLPAL
Headquarters- Mumbai , Maharashtra Founded- 1937
Industry – Oral Care Products Key People- Mr.Ram Raghavan (MD)
 CHAPTER - III
FIRM PERFORMANCE
AND ITS
DETERMINANTS
3.1 INTRODUCTION
In this age of globalization and cut throat competition in the market only way a
business can survive is to enhance its performance consistently in a time
period . The measurement of firm performance is the most effective way from
that which we can determine whether a firm or a company can be sustainable
in the Long run.

Firm performance is the only way that the companies can experience
development and progress. A time to time assessment of firm performance
leads to consistency in efficient and effective results.

3.2 What is Firm Performance?

Firm performance has become a relevant topic in statistic management

research and is frequently use as a dependent variable. Although it is a
common phrase in academic literature there is hardly any accurate
information about its definition and measurement.

The factual absence of any operational definition of firm performance it is

specific that there will be a diverse interpretations suggested by various
peoples according to their personal perception. The definition of this concept
may be abstract , or general, less or clearly defined.

The firm performance is a complex term which may include different kinds of
meaning until and unless it means organizational performance, functioning of
the firm and outcomes of the operations.

The firm performance indicates the organizational performance, which

includes manufacturing of products and services , functioning of different units
of the firm , performance of its employees and outcomes of their in total.
Two variables are taken for the purpose of measuring the Firm performance in
this study

1- Return on Asset - On the basis of accounting profitability return on

asset is taken a measure the firm performance by taking the relation
between total profit earned and total assets which is used in the
company to get return .
2- P/B Ratio- On the basis of market profitability to measure the firm
performance the price-to-book ratio is studied to know the actual
relationship between the actual market value and the book value of the
company.

3.3 Determinant of Firm Performance: Firm Size

The firm’s performance has vital role in running businesses and, measuring
performance helps to identify firms’ position in a given time. Firm can optimize
its capability through understanding the determinant factors of its
performance. In this way finding the relationship between Firm’s size and
profitability is valuable to the industry.

There are two variables we have in this study to measure the firm size of the
sample companies.

1- Logarithm of Assets - It is the natural log of total assets that we have

obtained from the total of assets of each year . We have calculated the
log of assets of 10 number of sample companies taken for this study and
for the period of 10 years i.e. 2011-2020
2- Logarithm of Sales - It is the natural log of total sales that has been
obtained for Total sales of the period from 2011-2020 of the 10 sample
companies taken for this study.