FMCG Industry Analysis

Summer Training Report on
FUNDAMENTAL ANALYSIS OF
THE FMCG INDUSTRY
Submitted in partial fulfillment of the requirements for the Two Years

Masters of Business Administration
(Affiliated To Dr. A.P.J. Abdul Kalam Technical University Uttar Pradesh,
Lucknow)
SESSION: (2020-2022)
Under Supervision of: Submitted By:
Mrs Anju Swati Prasad

Assistant professor MBA, 3rd Semester
(Designation) Roll No MBA/08/208
Aktu roll no:200106700
I
CERTIFICATE
Certified that this summer training project report on FUNDAMENTAL
ANALYSIS OF THE FMCG INDUSTRY has been prepared by Swati Prasad of
MBA 3rd semester during the session 2020-2022 under my supervision .
The Summer training project report is upto the standards and I forward to
the Director ,School of Management Sciences ,Varanasi for getting it
evaluated as per the ordinances governing of MBA course .
……
…………………………….
Signature
………………………………
… Name
Date
……………………………….
Designation
PREFACE
MBA course provides the knowledge about commerce & industry. As a part of
curriculum & in order to gain practical knowledge in the field of management, we
are required to visit a service unit & prepare report on it. This helps to know about
actual uses of what we have learnt through theoretical knowledge.
As only the theoretical knowledge of business is not enough for achieving overall
knowledge of business management. I, the student of MBA have to prepare a
training report on a service unit. I also get opportunity to know about FMCG
Sector. & prepare training report on it.
This report is the reflection of what I have observed & came to know during my
training period utmost care has taken to prepare this report on the basis of
information & research given. The report presented here provides all
information that I have obtain during my practical training period of FMCG
sector.
ACKNOWLEDGMENT
Writing a project can never be the work of any one person. It includes co-
operation & efforts of those persons who are in some way involved in the work at
every stage. I am highly thankful to every person for helping me thought my
summer training.
Let us begin my acknowledgement by thanking my Institute Project guide Mrs
Anju Singh for her assistance & constant feedback throughout this research.
Without her professional guidance the completion of this dissertation would not
have been possible. Also I would like to acknowledge & thank all the respondents
of my questionnaire whose involvement in my research enabled my study to be
possible & representative.

DECLARATION
I, Swati Prasad, hereby declare that the report for “Summer Internship Project
Report “entitle “FUNDAMENTAL ANALYSIS OF THE FMCG INDUSTRY” is a
result of my own work and my indebtedness to other work publications,
references, if any, have been duly acknowledged.
Place: Varanasi
Date: Swati Prasad

Preface
As a part of MBA curriculum and to gain practical knowledge in the

field of equity research, we are required to study the fundamentals of the
companies and implement the learning’s to forecast the value of the
stock under the guidance of the company. This project helped us to
enhance our knowledge regarding FMCG sector.. This report is a concise
compilation and implementation of all that I learned in this 2 month
period.
Executive Summary
The Fast Moving Consumer Goods (FMCG) Sector is one of the

fastest growing sectors in the Indian economy with the increasing
demand and consumption. With the increase in disposable income of
the rural population, there has been a
significant boost in the sector in the past few years. With the
relaxations provided by the government and the approval of foreign
investment upto 100% in single brand retail and 51% in multi brand
retail, the industry has seen a boost in the recent years.
The main aim of this research project is to study the market environment
of the FMCG sector at present, and study the annual reports of 5
companies in the sector, viz, Hindustan Unilever, Dabur, Nestle, ITC,
and P&G with the intent of understanding and comparing the companies’
performance to be able to draw an inference of which is the better
performing company to invest in. The project will help investors in
having a better understanding of the companies’ annual results and
determining which company they should invest in for best results with
their risk
appetite.
To do so, the financial statements of all these companies were

analysed, and their growth was forecasted using a standard industry
growth rate. The financials were prepared on the basis of Percentage of
Sales. Apart from that, the intrinsic value of each share was calculated
using the Discounted Cash Flow Method.
The analysis showed that while all companies were fundamentally

strong, most of them were overvalued on the stock market. As P&G
was the only company which was undervalued according to the
projections, it is advised to purchase the shares of that company.
However, as the price per share is very high, not every investor might
be willing to buy the shares. In such a scenario, it is advised that they
buy
shares of HUL or Dabur which are relatively lower priced and are not
overly valued.
TABLE OF CONTENTS
1 Preface i
2 Acknowledgment Ii
3 Executive Summary Iv
4 About FMCG Industry 6
5 Impact of COVID 19 8
6 Hindustan Unilever Ltd 1

0
7 Dabur India Ltd 1

9
8 Procter & Gamble Hygiene and Health 2

Care Ltd 8
9 ITC Ltd 3
7
10 Nestle India 4
6
11 Comparisons 5
5
12 Suggestions 5
7
13 References & Bibliography 5

8
Chapter 1 : An Introduction to FMCG
In this fast-paced world, industries are constantly striving to cater the needs of
mankind. As the lifestyle of people changes, and their standard of living
increases, their demands change. With growing awareness, easier access, and
ever changing scenarios, the Fast Moving
Consumer Goods (FMCG) sector has seen a boosting growth in the past few years. These
changes have been seen due to the liberalization, urbanization and increase in
the disposable incomes and modifications in the lifestyle of the people.
The FMCG sector is the fourth largest sector in the Indian economy. The
sector includes food & dairy products, packaged food products, household
products, drinks and others. It provides employment to around 3 million
people accounting for approximately 5% of the total factory employment in
India. The sector is characterized by strong presence of leading multinational
companies, competition between organized and unorganized players, well
established distribution network, and low operational cost.
Household & Personal Care accounts for 50% of the sales for the sector,
with Healthcare taking up 31% of the share, and the remaining 19% being
attributable to the Food &
Beverages 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, rural development has paved the way for increase in consumer
demand as well, aiding the boom in the FMCG industry.
Online portals are expected to play a key role for companies trying to enter the
hinterlands. Internet has contributed in a big way, facilitating a cheaper and
more convenient mode to increase a company’s reach. It is estimated that 40
per cent of all FMCG consumption in India will be made online by 2020. The
online FMCG market is forecast to reach US$ 45 billion in 2020 from US$ 20
billion in 2017.
The retail market in India was estimated to reach US$ 1.1 trillion by 2020 (before the
COVID 19 pandemic broke out) from US$ 840 billion in 2017, with modern
trade expected to grow at 20-25 per cent per annum, which is likely to boost
revenue of FMCG companies.
Revenue of FMCG sector reached Rs 3.4 lakh crore (US$ 52.75 billion) in FY18 and is
estimated to reach US$ 103.7 billion in 2020. FMCG market is expected to grow
at 9-10 per cent in 2020. After the breakout of the COVID 19 pandemic, Neilsen
estimated a growth of 5.6% while CRISIL estimates that the market will degrow
by 2-3%.
Investments :
The Government has allowed 100 per cent Foreign Direct Investment (FDI) in
single-brand retail and 51 per cent in multi-brand retail. This will boost
employment, supply chain and make for high visibility of FMCG brands
across retail markets thereby increasing consumer spending and encouraging
the launch of more new products.
Some of the recent developments in the FMCG sector are :
1. In May 2020, Tata Consumer Products Limited acquired

PepsiCo’s share in NourishCo Beverages Limited.
2. In March 2020, Hindustan Unilever Limited entered into an
agreement with Glenmark Pharmaceuticals Ltd to acquire its
hygiene brand VWash.
3. In March 2020, Venture Catalysts made an investment in OM
Bhakti, a brand in the puja cotton-wicks market during its seed-
funding round.
4. In November 2019, ITC Ltd purchased 33.42 per cent stake in
Delectable Technologies, a vending machine start-up.
Government Initiatives :
Some of the major initiatives taken by the Government to promote

the FMCG sector in India are:
1. The Government has drafted a Consumer Protection Bill

emphasising setting up of an extensive mechanism to
ensure simple, affordable and timely delivery of justice to
consumers.
2. GST is beneficial for the FMCG industry as many of
products eg soap, toothpaste etc come under the 18% tax
bracket.
Chapter 2 : Impact of COVID 19
After the outbreak of the COVID 19 pandemic, Neilsen recorded consumer
buying behaviours with increase in purchase of health and safety products
such as masks and sanitizers.
As per reports, major areas of consumption affected by the outbreak are mentioned below :
1. Wallet Adjustments : Due to the COVID 19 pandemic, the incomes of
consumers have become strained. Unemployment is rampant. The

strain on the supply chain has made it difficult for businesses to
function to their fullest.
Daily jobbers moving back home has affected manufacturing as well. With
such unfavourable conditions surrounding any and all businesses, income has
seen a steep decline for many. As a result of this, spending has been
affected as well. It is reasonable to expect that these people will not
be frivolous with their spending in the coming months and only try
to buy the essentials. Consumers who have not been hit by the
pandemic might also cut back on their spending in case they’re out
of job soon as well, and try to save more, thereby reducing
consumption.
2. Rebalanced FMCG Baskets : With the outbreak of the pandemic,

there might be an onset of the “homebody economy” driven by
consumers’ choice to increasingly live, eat and entertain at home
even as living restrictions ease. The FMCG will definitely benefit
from this shift in spending.
3. Reassessed Pricing Mechanisms : This situation offers retailers
and brands the chance to rethink and reset their direction moving
forward. Everyday low prices (EDLP), shallower discount levels,
economy or bonus packs may be better ways to incentivize loyalty
to both brands and retailers as consumers
continue to limit their number of shopping trips and visits to

multiple stores once stock levels start to stabilize. As supply chains
faltered and stock replenishment and delivery issues prevailed
during initial lockdowns, the retail environment also became
increasingly fragmented with smaller retailers, direct-to-consumer
models and specialty stores filling the void and offering
alternatives to traditional retail channels. Moving forward, this

fragmentation will test consumers’ traditional store loyalties as
restrictions lift and stock levels normalize.
4. Reprioritized Values : In this new world, health, safety and quality
assurances have become important accelerators in brand/product
decision making and will remain significant choice drivers into the
future. Consumers will reassess the brand aspects they value most,
with some attributes rising in importance, or being prioritized over
others. Understanding what product claims are most important to
consumers across different categories will not only drive loyalty
but allow brands to identify the attributes that consumers are
willing to pay a premium for.
5. Rising Origin Preferences : Even before the living restrictions of
COVID-19, there was an increasing preference for local brands.
As lockdowns were implemented, consumers increasingly came to
rely on and trust local products. In many instances, local products
were the only ones available. As living restriction horizons extend,
local will become increasingly important for retailers who want a
guarantee of supply, as global supply chains witness the brunt of
the lockdowns, but also for consumers who will want to purchase
brands that support their communities and boost their economies.
6. Reset Brand Relationships : In the new post COVID 19 world
with changing consumer preferences, marketeers will have to look
at where audiences have shifted their listening, viewing, engaging
and socializing, as well as how they will need to repair broken
relationships or strengthen new ones. Authenticity, trust and
empathy have been the winning traits of those brands that
remained “on air” and relevant to consumers emerging needs. As
horizons stretch out,
consumers will increasingly value connections with brands they

trust and who showcase they care about them and their
communities.
Chapter 3 : Hindustan Unilever
Hindustan Unilver is a subsidiary company to Unilever, a British Dutch company. It was
established in India in 1933 as Lever Brothers. In 1956, after a merger with

constituent groups, it was called Hindustan Lever Ltd, and was renamed to
Hindustan Unilever Ltd in 2007. It is headquartered in Mumbai. They employ
roughly 21,000 people across India.
The company is a part of the daily lives of millions of people in India. Their
brands are household names, eg, Lux, Lifebuoy, Wheel, Pond’s, Closeup,
Brooke Bond, Bru, Kissan, Lakme etc. They have a portfolio of about 35
brands in around 20 categories.
Manageme
nt
Name Designation
Mr. Sanjeev Mehta Chairman & Managing Director
Mr. Srinivas Phatak CFO, Executive Director
Mr. William Uijen Executive Director
10
Mr. Aditya Narayan Independent Director
Mr. Leo Puri Independent Director
Mr. O. P Bhatt Independent Director
Dr. Sanjiv Misra Independent Director
Ms. Kalpana Independent Director

Morparia
Dr. Ashish Gupta Independent Director
Mr. Dev Bajpai Company Secretary, Executive

Director
A preliminary search with respect to all members of the core

management shows that none of them have been involved in any
confirmed or alleged fraud,
embezzlement, or bribery, neither have they been named in any police

or court proceedings. They have a proper Audit Committee and a
Nomination and
10
Remuneration Committee in place. They publish the required details
for their directors as prescribed by the Companies Act, 2013.
HUL has many policies in place for the smooth functioning of their
business, including a rigid and holistic approach to corporate
governance. They have a robust Corporate Social Responsibility policy
in place which outlines their goal to achieve sustainable growth and
reduce the environmental impact of their operations. As per the
provisions of the Companies Act, 2013, they spend a minimum of 2% of
the
average profits of the preceding three financial years towards CSR

activities which are governed by a CSR Committee constituted in the
company. HUL governs with integrity and has a strict quality control
policy in place for the same.
Shareholding Pattern
Holde No of % Share
r Shares Holding
Foreign 347,883,400 14.81%
Institutions
Banks/Mutual 102,727,535 4.37%
Funds
Central Govt 20 0%
Others 85,097,080 3.62%
General Public 266,130,857 11.33%
Financial
Institutions
11
93,298,292 3.97%
Foreign Promoter 1,454,412,85 61.90%
8
Foreign Institutions Banks/Mutual Funds Central Govt
Others
General Public
Financial Institutions Foreign Promoter
Financials
12
Balance Sheet
Balance Sheet 19- 20- 21- 22- 23- 24- 25-

Forecasting
Mar Mar Mar Mar Mar Mar Mar
Equities
Equity Share Capital 216 216 216 216 216 216 216
Reserves and Surplus 7,651 8,013 8,211 9,331 10,107 11,200 12,27
7
Minority Interest 18 17 17 17 17 17 17
Total Shareholder's 7,885 8,246 8,444 9,564 10,340 11,433 12,51
Funds 0
Non Current Liabilities
Long Term Borrowings - - 590 184 463 391 510
Other Financial Liabilities 394 939 709 931 945 1,081 1,167
Non Current Tax 601 424 753
Liability (net)
545 547 630 678
Long Term Provisions 1,082 1,227 1,228 1,387 1,507 1,667 1,829
Total Non Current 2,077 2,590 4,259
Liabilities
3,071 3,049 3,544 3,817
Current Liabilities
Short Term Borrowings 99 - 53 30 47 44 53
Trade Payables 7,206 7,535 7,839 8,686 9,521 10,491 11,53
1
Other Current Liabilities 839 1,360 1,169 1,429 1,497 1,686 1,834
Short Term Provisions 523 422 503 522 591 641 710
Total Current Liabilities 8,667 9,317 9,563 10,667 11,656 12,862 14,12
7
Total Equities & 18,62 20,15 30,89
Liabilities 6
9 3 21,078 23,280 25,541 28,112
Assets
Non Current Assets
Tangible Assets 4,192 4,960 5,238 5,762 6,338 6,971 7,669
Intangible Assets 523 519 542 584 631 682 739
Capital Work-In-Progress 406 597 630 693 763 839 923
Fixed Assets 5,121 6,076 6,410 7,039 7,731 8,493 9,330
Non-Current Investments 13 5 10 8 10 11 12
Non Current Tax Assets 835 1,083 1,550
(Net)
1,020 1,188 1,272 1,418
Deferred Tax Assets 373 284 349 358 407 441 489
[Net]
Long Term Loans And 215 238 357
Advances
241 271 295 326
Other Non-Current Assets 158 146 162 174 193 212 233
Total Non Current 1,594 7,832 8,191 9,038 9,909 10,899 11,972
Assets
Current Assets
Current Investments 2,714 1,253 2,109 1,900 2,310 2,426 2,729
Inventories 2,574 2,767 2,840 3,168 3,462 3,820 4,196
Trade Receivables 1,816 1,149 1,577 1,540 1,796 1,922 2,142
Cash And Cash 621 3,216 2,040 2,970 2,887 3,374 3,608
Equivalents
Other Bank Balance 3,136 1,897 2,676 2,584 3,031 3,235 3,610
Short Term Loans And 4 - 2
Advances
2 1 2 2
OtherCurrentAssets 1,049 2,039 1,642 2,080 2,144 2,434 2,638
Total Current Assets 11,91 12,32 18,92
5
4 1 12,887 14,242 15,632 17,213
Total Assets 18,62 20,15 30,89
6
9 3 21,078 23,280 25,541 28,112
Analysis
1. Sales are forecasted to grow @ 5.6% for 2020-2021 as projected

by Neilsen & 10% thereafter.
2. There is steady growth in reserves throughout the project five
years as the company is making profits.
3. While forecasting, using the percentage of sales method, it is
noticed that the forecasted assets are greater than the
forecasted liabilities, thus the
company has an external fund requirement. It is assumed that the

company will borrow long term debts for the same.
4. The assets are projected on the basis of Fixed Asset Turnover

calculated on the basis of the revenue and assets as on 31 March
2020.
Profit & Loss Statement
P&L Forecasting 19- 20- 21- 22- 23- 24- 25-

Revenue from 38,68 39,23
Operations
4 8 41,435 45,579 50,137 55,150 60,665
Less: - - - - - - -
Excise/Sevice
Tax/Other
Levies
Other Income 550 632 667 734 808 888 977
Total Revenue 39,86 40,41
0 5 42,103 46,313 50,944 56,039 61,643

Expenses
Cost Of Materials 18,47 18,25 19,533 21,352 23,557 25,876 28,483
Consumed
4 9
Employee Benefit 1,875 1,820 1,965 2,138 2,364 2,594 2,857
Expenses
Finance Costs 33 118 80 112 111 128 138
Depreciation And 565 1,002 561 617 679 747 822
Amortisation Expenses
Other Expenses 10,08 9,843 10,595 11,547 12,758 14,004 15,420
1
Total Expenses 31,02 31,04 32,734 35,766 39,469 43,350 47,720
8 2
Profit before 8,832 9,373 9,369 10,547 11,475 12,689 13,923
Exceptional Items
Exceptional Items (228) (200) (228) (242) (270) (295) (326)
Profit Before Tax 8,604 9,173 9,596 10,78 11,74 12,98 14,24
8 6 4 9
Tax - - - - -
Current Tax 2,610 2,243 2,620 2,795 3,120 3,408 3,761
Deferred Tax (66) 166 54 126 104 133 136
Total Tax Expense 2,544 2,409 2,674 2,921 3,224 3,541 3,898
Profit for the period 6,060 6,756 6,923 7,867 8,522 9,443 10,35
1
Notes
1. It is assumed that the revenues will grow @ 5.6% for the financial year
ending March 2021 (as projected by Neilsen) due to the impact of

COVID – 19 and at a constant rate of 10% thereafter.
2. All numbers are projected on the basis of percentage of sales.
Sales Growth
Ye Incom
a e
r
2016 31,461
2017 32,367
2018 34,878
2019 38,684
2020 39,238
2021 41,435
2022 45,579
2023 50,137
2024 55,150
2025 60,665
70,000.00
60,000.00
50,000.00
40,000.00
Net Sales/Income
30,000.00 from operations
20,000.00
10,000.00
0.00
PAT Growth
Year NPAT
2016 4,167
2017 4,502
2018 5,225
2019 6,060
2020 6,756
2021 6,923
2022 7,867
2023 8,522
2024 9,443
2025 10,351
12000
10000
8000
6000
NPAT
4000
2000
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Growth in Reserves
Year Reserv
es
2016 6,357
2017 6,528
2018 7,065
2019 7,651
2020 8,013
2021 8,211
2022 9,331
2023 10,107
2024 11,200
2025 12,277
14,000.00
12,000.00
10,000.00
8,000.00
Reserves
6,000.00
4,000.00
2,000.00
0.00
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Intrinsic Valuation of Share
Forecas
te d
Operating Investing Financing Net
Cash
Activities Activities Activities Change
Flow
19-Mar 5,800 (438) (5,390) (28)
20-Mar 7,623 1,791 (6,819) 2,595
21-Mar 8,050 1,891 (7,201) 2,740
22-Mar 8,855 2,080 (7,921) 3,014

23-Mar 9,740 2,288 (8,713) 3,316
24-Mar 10,714 2,517 (9,584) 3,647
25-Mar 11,786 2,769 (10,543 4,012

)
21-Mar 7,520 1,767 (6,727) 2,560
22-Mar 7,728 1,816 (6,913) 2,631
Discoun 23-Mar 7,942 1,866 (7,104) 2,703
24-Mar 8,161 1,917 (7,300) 2,778
te d @ 25-Mar 8,387 1,970 (7,502) 2,855
7.0422 Total 39,738 9,336 (35,547 13,527
% )
Terminal Cash 293,772
Flow
PV of Terminal 209,043
Cash Flow
Total PV 222,570
No of Shares 2,349,550,04
2
Intrinsic Value 947
Calculation of discount rate
Cost of
Equity
Risk Free 6.45
Rate
Marke
t
8.46
Premiu
m
Company 0.07
Beta
Cost (as per 7.042
CAPM)
2
Cost of Debt 0
WACC 7.042
Notes :
1. Perpetual growth rate is taken at 5.6% for terminal cash flows.

The rate was chosen on the basis of the fact that in the present
scenario, with stunted growth rate as a result of COVID, there is
still 5.6% expected growth. So, if
such a situation arises in the future again, this minimal growth
rate of 5.6% is still achievable.
2. This growth rate values share at INR 947 which is lesser

compared to the market price of INR 2233 (as on 30 July 2020)
making the share overvalued in the share market.
Chapter 4 : Dabur India Limited
Dabur India was founded in 1884 by Dr. S. K. Burman, an Ayurvedic

practitioner, in Kolkata, to mass produce his Ayurvedic medicines with
the mission to provide
affordable medication to ordinary people, especially in remote villages.

More than a century later, Dabur is still a family business and members
of the Burman family hold key managerial positions in the company.
Dabur is headquartered at Ghaziabad and as of 2017, employed almost

7,250 people across its various offices.
Manageme
nt
Name Designation
Amit Burman Chairman
Mohit Burman Vice Chairman
Mohit Malhotra Whole Time Director
& CEO
Lalit Malik Chief Financial
Officer
K Jain Executive Vice
President & Co.
Secretary
A K Jain Secretary
Ajay Dua Director
Ajit Mohan Sharan Director
Falguni Sanjay Director
Nayar
P N Vijay Director
R C Bhargava Director
S Narayan Director
Saket Burman Director
Sanjay Kumar Director
Bhattacharyya
Aditya Burman Non Executive
Director
P D Narang Whole Time
Director


Nomination and

Dabur has a holistic CSR policy focusing on various areas such as
education, gender equality, environmental sustainability amongst
others. They have a separate foundation, Sustainable Development
Society, to take care of all their CSR
activities and they also collaborate with various NGOs and Section 8
companies for CSR. A CSR Committee has been instituted for
overseeing all activities undertaken under the CSR policy.
Holder's Name No of Share

Shares Holdi
ng
Promoters 1,199,190,2 67.85
0 %
7
Foreign 311,658,333 17.63
Institutions %
Banks/MutualFu 58,003,301 3.28%
nds
Others 28,660,869 1.62%
General Public 96,456,737 5.46%
Financial 73,098,604 4.14%
Institutions
Foreign 345,000 0.02%
Promoter
Promoters
Foreign Institutions Banks/MutualFunds Others
General Public
20
Balance Sheet
Balance Sheet 19- 20- 21- 22- 23- 24- 25-

Forecasting
Equities
Total 5,663 6,642 6,801 7,704 8,331 9,212 10,08
Shareholder's 1
Funds
Non Current
Liabilities
Long Term 524 467 527 454 591 629 730
Borrowings
Total Non Current 524 467 527 454 591 629 730
Liabilities
Current Liabilities
Current Liabilities 2,060 2,016 2,167 2,364 2,611 2,866 3,156
Total 2,249 2,244 2,389 2,618 2,885 3,170 3,489
Current
Liabilities
Total Equities & 8,436 9,354 9,717 10,77 11,80 13,01 14,30
5 6 1 0
20
Liabilities
Assets
Non Current Assets
Fixed Assets 1,969 2,399 2,534 2,787 3,066 3,372 3,709
Capital Work in 64 - - - - - -
Progress
Investment 3,359 2,800 3,275 3,432 3,865 4,205 4,650
Total Non 5,392 5,200 5,809 6,219 6,930 7,577 8,359
Current Assets
Current Assets
Inventories 1,301 1,380 1,425 1,585 1,734 1,912 2,101
Trade Receivables 834 814 876 955 1,055 1,158 1,275
Cash And Cash 328 811 606 801 811 928 1,002
Equivalents
Short Term Loans And 583 1,150 921 1,170 1,205 1,368 1,483
Advances
Total Current Assets 3,045 4,155 3,828 4,510 4,805 5,367 5,861
Total Assets 8,436 9,354 9,637 10,730 11,735 12,944 14,220
Notes :

21
noticed that the forecasted assets are greater than the
forecasted liabilities, thus the
company has an external fund requirement. It is assumed that the

company will borrow long term debts for the same.

2020.
22
P&L Forecasting Mar-19 Mar-20 Mar- Mar-22 Mar-23 Mar-24 Mar-25
21
Net Sales/Income 8,533 8,704 9,191 10,110 11,121 12,233 13,457
from operations
Other Income 296 305 322 340 360 380 401
Total Income From 8,829 9,009 13,857
Operations
9,513 10,451 11,481 12,613
Expense
Consumption of Raw 3,493 3,751 3,863 4,301 4,704 5,189 5,700
Materials
Purchase of 803 675 788 826 930 1,012 1,119
Traded Goods
Increase/Decreas 13 (65) (28) (53) (46) (57) (60)
e in Stocks
Finance Cost 60 50 58 61 69 75 83
Employees Cost 938 948 1,005 1,104 1,215 1,336 1,470
Depreciation 177 220 212 244 263 292 320
Other Expenses 1,547 1,603 1,680 1,855 2,036 2,242 2,465
Total Expenses 7,030 7,181 7,578 8,339 9,171 10,089 11,097
Profit before 1,799 1,828 1,936 2,112 2,310 2,524 2,760
Exceptional Items
Exceptional Items (75) (100) (93) (109) (117) (130) (142)
Profit before Tax 1,724 1,728 1,842 2,003 2,193 2,394 2,618
Tax 279 280 298 326 360 395 435
Net Profit For 1,445 1,448 1,544 1,676 1,833 1,999 2,183
the Period
Notes

Sales Growth
Year Inco
m
e
2016 7,869
2017 7,701
2018 7,748
2019 8,533
2020 8,704
2021 9,191
2022 10,11
0
2023 11,12
1
2024 12,23
3
2025 13,45
7
16000
14000
12000
10000
8000
6000
4000
2000 Net Sales/Income from
0 operations
NPAT Growth
Year Net
Profi
t
2016 1,254
2017 1,280
2018 1,358
2019 1,445
202 1,448
0
202 1,544
1
202 1,676
2
202 1,833
3
202 1,999
4
202 2,183
5
2,500
2,000
1,500
Net Profit
1,000
500
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Growth in Reserves
Ye Reserv
a e
r s
2016 3,995
2017 4,671
2018 5,530
2019 5,455
2020 6,429
2021 6,588
2022 7,486
2023 8,109
2024 8,986
2025 9,850
12,000
10,000
8,000
6,000
Reserves
4,000
2,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Intrinsic Value of Share
Cash Operatin Investin Financin Adjustme Bullet Other Net Cash
Flow g g n
25
Forecasti g Activiti Activiti t Repaym s Flo
ng es es en t of w
Activiti repayme
Loan
es nt of
loan
Mar- 1,499 337 (1,888) 272 - 1 (51)
19
Mar- 1,649 371 (2,077) 299 - 1 243
20
Mar- 1,741 391 (2,193) 316 (30) 1 226
21
Mar- 1,916 430 (2,413) 347 - 1 282
22
Mar- 2,107 474 (2,654) 382 - 1 310
23
Mar- 2,318 521 (2,919) 420 - 1 341
24
Mar- 2,550 573 (3,211) 463 - 1 375
25
Mar- 1,605 361 (2,022) 291 (27) 1 209
21
Discount
Mar-
Mar-23 1,62
1,651 36
371 (2,050
(2,079) 29
299 - 1 239
243
ed@
8.4804% Mar-24 1,674 376 (2,108) 304 - 1 246
22
Mar-25 81,697 6381 )(2,138) 5308 - 1 250
Total 8,255 1,855 (10,398) 1,498 (27) 4 1,187

Flow
PV of Terminal
26
Cash Flow
9,164
Total PV 10,351
1,767,413,0
5
No of Shares 1
Intrinsic Value 59
Calculation of
Discounting Factor
Cost of
Equity
Risk Free Rate 6.45
Market 8.46
Premium
Company 0.31
Beta
Cost 8.476
27
5
Cost of Debt 0.003
28
9
WACC 8.480
Notes :

still 5.6% expected growth. So, if such a situation arises in the
future again, this minimal growth rate of 5.6% is still achievable.
Chapter 5 : P&G
Richardson Hindustan Limited, which was established in India in

1964, became an affiliate to Procter & Gamble (USA) in 1984. Today,
P&G operates in India under 3 entities - Procter & Gamble Hygiene
and Health Care Limited, Gillette India Limited, and Procter &
Gamble Home Products, the latter of which is not listed. At present,
the company employs almost 26,000 people, directly and indirectly.
Some
of its most popular brands are Vicks, Whisper, Ariel, Pampers, Tide,
Duracell, and Head & Shoulders.
Manageme
nt
Name Designation
Chairman &
Independent
Mr. R. A. Shah
Director
Mr. Managing
Madhusud Director
an
Gopalan
Mr. B. S. Mehta Independent
Director
Mr. A. K. Gupta Independent
Director
Ms. Meena Ganesh Independent
Director
Mr. Pramod Non-
Agarwal Executive
Director
Ms. Sonali Dhawan Non-
Executive
Director
Mr. Karthik Non-
Natarajan Executive
Director
Mr. Gagan Sawhney Non-
Executive
Director
Mr. Non-
Ghanashy Executive
am Hegde Director
Mr. Prashant Chief
Bhatnagar Financial
Officer
Ms. Flavia Machado Company
Secretary


Nomination and

P&G has a robust mechanism of corporate governance. They have a

multitude of policies in place for the smooth functioning of the business,
such as, Related Party Transaction Policy, Preservation of Documents
Policy, Vigil Mechanism etc. They also have a code of conduct for all
employees and a separate code for directors to follow. The company has
in place, a CSR Committee constituted under the requirements of the
Companies Act that makes sure that all the necessary steps with respect
to the company’s CSR policy are carried out.
Shareholding Pattern :
Category No. of Share

shares Holdi
ng
Foreign Institutions 11,670,731 12.10%
NBFC and Mutual 4,369,836 4.53%
Funds
Central Government 63,000 0.07%
Others 3,148,073 3.27%
General Public 12,626,966 13.10%
Financial Institutions 4,022,031 4.17%
Foreign Promoters 60,515,079 62.76%
Foreign Institutions NBFC and Mutual Funds Central Government

Others
General Public
Financial Institutions Foreign Promoters
Balance Sheet
Balance 18-Jun 19-Jun 20-Jun 21-Jun 22-Jun 23-Jun 24-Jun

Sheet
Forecasting
Equities
Equity Share 32 32 3 3 3 3 32
Capital 2 2 2 2
Reserves and 773 877 1,004 1,036 1,159 1,265 1,396
Surplus
Minority Interest - - - - - - -
Total 806 909 1,037 1,069 1,191 1,297 1,429
Sharehold
er's Funds
Non
Current
Liabilities
Long Term 49 66 6 7 7 8 96
Provisions 6 3 9 7
Total Non 49 66 6 7 7 8 96
Current 6 3 9 7
Liabilities
Current Liabilities
Short Term - - - - - - -
Borrowings
Trade Payables 406 547 482 572 601 683 745
Other 161 104 154 145 170 182 203
Current
Liabilities
Short Term 4 5 5 6 6 7 7
Provisions
Total 571 656 641 723 777 871 955
Current
Liabilities
Total Equities & 1,425 1,631 1,745 1,864 2,049 2,256 2,480
Liabilities
Assets
Non Current
Assets
Tangible Assets 250 234 252 272 299 329 362
Capital Work- 21 15 1 1 1 2 23
In- 6 7 9 0
Progress
Fixed Assets 272 249 268 289 318 350 385
Deferred Tax 23 37 3 4 4 4 52
Assets [Net] 5 0 2 7
Long Term Loans 42 39 4 4 5 5 65
And Advances 7 7 4 8
Other Non- 207 217 247 255 285 311 344
Current
Assets
Total Non Current 272 293 329 343 381 417 460
30
Assets
Current Assets
Inventories 124 203 190 217 231 258 282
Trade Receivables 148 181 191 205 225 248 273
Cash And 400 540 547 599 651 720 790
Cash
Equivalents
Other Bank Balance - - - - - - -
Short Term Loans 100 101 117 120 135 147 162
And Advances
OtherCurrentAssets 110 65 102 9 110 116 130
2
Total Current 882 1,090 1,148 1,233 1,352 1,489 1,637
Assets
Total Assets 1,425 1,631 1,745 1,864 2,049 2,256 2,480
Notes :

30
3. While forecasting the numbers, it was observed that for June
2021, the liabilities were more than assets. Since the company
does not have any long term borrowing, it was assumed that the
difference was settled by payment to creditors. Thereafter, all
changes were made in the trade payables.
calculated on the basis of the revenue and assets as on 31 June
2019.
P&L Forecasting Jun- Jun- Jun- Jun- Jun- Jun- Jun-
18 19 20 21 22 23 24
Net Sales/Income from 2,455 2,947 3,144 3,355 3,69 4,05 4,465
operations 9
0
Other Operating Income 24 53 58 62 68 75 83
Total Income From 2,479 3,000 3,201 3,417 3,75 4,13 4,547
Operations 4
8
Expenditure
Consumption of Raw 545 951 870 1,003 1,06 1,19 1,299
Materials 1
4
Purchase of Traded 342 322 387 390 441 479 530
Goods
Increase/Decrease in 62 (38) 14 (13) 0 (7) (4)
Stocks
Finance Cost 5 5 6 6 7 8 9
Employees Cost 115 132 144 152 168 185 203
Depreciation 52 50 54 58 64 70 77
Admin. And Selling 261 312 333 356 391 430 473
31
Expenses
Other Expenses 515 658 683 738 807 890 978
Total Expenses 1,898 2,393 2,491 2,691 2,94 3,24 3,566
6
3
Profit before Tax 582 607 710 726 815 888 982
Tax 207 188 230 230 261 283 314
Net Profit for the period 375 419 480 495 554 605 668
Notes


As the year end for the company is June, growth rate is
applied on a prorated basis,
assuming sales are evenly distributed throughout the year.
32
Sales Growth
Year Inco
m
e
2015 2,332
2016 2,482
2017 2,320
2018 2,455
2019 2,947
2020 3,144
2021 3,355
2022 3,690
2023 4,059
2024 4,465
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500 Income
1,000
500
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
PAT Growth
Year NPA
T
2015 346
2016 423
2017 433
2018 375
2019 419
2020 480
2021 495
2022 554
2023 605
2024 668
800
700
600
500
400
NPAT
300
200
100
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Growth in Reserves
Years Reserv
es
2015 1,196
2016 1,479
2017 494
2018 773
2019 877
2020 1,004
2021 1,036
2022 1,159
2023 1,265
2024 1,396
1,600
1,400
1,200
1,000
800
Reserves
600
400
200
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Forecas Operati Investi Financi

te d ng ng ng
Net
Cash
Activities Activiti Activitie Change
Flow
es s
Jun- 426 28 (105) 349
15
Jun-16 353 224 (122) 456
Jun-17 445 149 (1,559) (964)
Jun-18 415 (19) (106) 290
Jun-19 412 35 (314) 134
Jun-20
435 37 (331) 141

Jun-21 478 41 (364) 155
Jun-22 526 45 (401) 171
Jun-23 579 50 (441) 188
Jun-24 637 55 (485) 206
Jun-20 400 34 (305) 130
Jun-21 405 35 (309) 131
Discoun Jun-22 410 35 (313) 133
Jun-23 415 36 (316) 135
te d @ Jun-24 421 36 (320) 136
8.6496 Total 2,052 177 (1,563) 665
%
Flow
PV of Terminal
Cash Flow
40,348
Total PV 41,013
No of Shares 32,460,736
Intrinsic Value 12,635
Calculation of Discounting
Factor
Cost of
Equity
Risk Free Rate 6.45
Market 8.46
Premium
Company 0.26
Beta
Cost 8.649
6
Cost of Debt 0
WACC 8.649
6
Notes :

2. This growth rate values share at INR 12,635 which is lesser
compared to the market price of INR 10,318 (as on 30 July
2020) making the share undervalued in the share market.
Chapter 6 : ITC
ITC Ltd was established in 1910 as the Imperial Tobacco Company of

India Ltd. In 1970, it was renamed to the India Tobacco Company Ltd
and finally to I.T.C Ltd in 1974. Now, the company is simply ITC Ltd,
with its name not being an acronym for its erstwhile name. ITC is
headquartered at Kolkata and employs over 36,500 people. The
company is also on the Forbes 2000 list.
The company has presence across various industries, some of them

being Hospitality, Packaging, and Cigarettes apart from FMCG.
Manageme
nt
Name Designation
Sanjiv Puri Chairman & MD
Rajiv Tandon Executive Director
& CFO
Nakul Anand Executive
Director
Sumant Executive
Bhargavan Director
Shilabhadr Independent
a Director
Banerjee
Hemant Independent
Bhargava Director
Arun Duggal Independent
Director
Atul Jerath Independent
Director
Sunil Behari Independent
Mathur Director
Anand Nayak Independent
Director
Nirupama Roy Independent
Director
Ajit Kumar Seth Independent
Director
Meera Shankar Independent
Director
David Independent
Robert Director
Simpson
embezzlement, or bribery, neither have they been named in any

police or court proceedings. They also have a proper Audit
Committee and a Nomination and Remuneration Committee in
place.
ITC has structural corporate governance policies in place. They have a

3 tier governance structure along with various codes and policies in
place. The company also has a very robust CSR policy. The major
areas of focus are rural development, education, healthcare, and
sanitation among others. It has instated a CSR & Sustainability
Committee as per the provisions of the Companies Act, 2013 that
oversees all expenditure made towards CSR.
Category No. of Share

shares Holdin
g
Foreign 1,792,606,24 14.58%
Institutions 5
NBFC and Mutual 1,160,723,52 9.44%
Funds 8
Other 4,005,922,62 32.59%
s 2
General Public 1,311,273,25 10.67%
7
Financial 4,006,483,73 32.59%
Institutions 0
GDR 15,221,859 0.12%
Foreign Institutions NBFC and Mutual Funds Others

General Public
Financial Institutions GDR
Balance Sheet
Balance Sheet 19- 20- 21- 22- 23- 24- 25-

Forecasting Mar Mar Mar
Mar Mar Mar Mar
Equities
Equity Share Capital 1,226 1,229 1,229 1,229 1,229 1,229 1,229
Reserves and Surplus 57,915 64,044 112,57
74,612 85,967 92,524 102,845 0

Total Shareholder's 59,484 65,650 76,280 87,703 94,298 104,680 114,46
Funds
2
Non Current Liabilities
Long Term Borrowings 8 6 (0) (0) (0) (0) (0)
Other Financial 79 348 405 467 503 559 612
Liabilities
Deferred Tax Liability 2,052 1,627 1,895 2,184 2,351 2,613 2,860
(net)
Long Term Provisions 161 175 204 235 253 281 308
Total Non Current 2,300 2,156 3,779
Liabilities
2,505 2,886 3,106 3,452
Current Liabilities
Short Term Borrowings 2 1 - - - - -
Trade Payables 3,510 3,630 1,813 2,089 2,248 2,499 2,735
Other Current Liabilities 6,450 5,780 6,734 6,604 7,841 8,479 9,560
Total Current 10,013 9,559 8,719 8,891 10,303 11,216 12,555
Liabilities
Total Equities & 71,797 77,366 130,79
Liabilities
87,504 99,480 107,707 119,348 6
Assets
Non Current Assets
Tangible Assets 18,626 23,800 25,133 27,646 30,411 33,452 36,797
Intangible Assets 759 203 203 203 203 203 203
Capital Work-In-Progress 4,126 - - - - - -
Fixed Assets 23,511 24,003 25,336 27,849 30,614 33,655 37,000
Non-Current Investments 11,696 10,715 12,483 14,383 15,480 17,207 18,834
Deferred Tax Assets 59 56 65 75 81 90 98
[Net]
Long Term Loans And 8 5
Advances
6 7 7 8 9
Other Non-Current Assets 4,777 3,082 3,591 4,137 4,453 4,949 5,417
Total Non Current 16,540 13,858 16,145 18,602 20,021 22,254 24,358
Assets
Current Assets
Inventories 7,943.9 8,879 10,345 11,919 12,828 14,259 15,607
7
Trade Receivables 4,035 2,562 2,985 3,440 3,702 4,115 4,504
Cash And Cash 4,152 7,277 8,478 9,768 10,514 11,686 12,791
Equivalents
Short Term Loans And 7 6
Advances
7 8 9 10 11
OtherCurrentAssets 2,262 2,832 3,299 3,801 4,091 4,547 4,977
Total Current Assets 31,747 39,505 46,024 53,028 57,073 63,439 69,438
Total Assets 71,797 77,366 87,504 99,480 107,707 119,348 130,79
6
Notes :

3. While forecasting the numbers, it was observed that for March
2021, the liabilities were more than assets. After repayment of
the minimal borrowings, it was assumed that the difference
was settled by payment to creditors. Thereafter, all changes
were made in the trade payables.
2020.
40
P&L 19- 20- 21- 22- 23- 24- 25-

Forecasting
Net 47,83 48,97 51,72 56,89 62,58 68,84 75,72
Sales/Income
9 9 2 4 4 2 6
from
operations
Other 2,687 3,023 5,986 6,825 7,382 8,186 8,970
Operating
Income
Total 50,52 52,00 57,70 63,72 69,96 77,02 84,69
Income From
6 2 8 0 5 8 6
Operations
Expenditure
Consumption 13,40 13,81 14,53 16,01 17,60 19,37 21,30
of Raw
3 1 8 6 5 3 6
Materials
Purchase 4,221 4,238 4,519 4,947 5,454 5,993 6,596
of Traded
Goods
Increase/Decre (203) (703) (484) (671) (665) (770) (827)
as e in
40
Stocks
Finance Cost 45 55 53 61 66 73 80
Employees 4,178 4,296 4,527 4,985 5,480 6,030 6,632
Cost
Depreciation 1,397 1,645 1,651 1,816 1,997 2,197 2,417
Other 8,348 8,503 9,002 9,890 10,88 11,97 13,16
Expenses
5 0 9
Total Expenses 31,38 31,84 33,80 37,04 40,82 44,86 49,37
8 3 6 4 3 6 3
Profit before 19,13 20,15 23,90 26,67 29,14 32,16 35,32
40
exceptional 8 8 2 5 2 1 3
items
Exceptional - (132) - - - - -
Items
Profit before 19,13 20,02 23,90 26,67 29,14 32,16 35,32
tax
8 6 2 5 2 1 3
Tax 6,314 4,442 5,746 5,756 6,627 7,135 7,930
Net profit for 12,82 15,58 18,15 20,91 22,51 25,02 27,39
the year
4 5 6 9 5 6 3
Notes


80,000.00
70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00 Revenue
0.00
16- 17- 18- 19- 20- 21- 22- 23- 24- 25-
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
Sales Growth
41
Date Revenue
2016 38,804
2017 42,360
2018 43,123
2019 47,839
2020 48,979
2021 51,722
2022 56,894
2023 62,584
2024 68,842
2025 75,726
42
PAT Growth
Year NPAT
2016 9,492
2017 10,471
2018 11,485
2019 12,824
2020 15,585
2021 18,156
2022 20,919
2023 22,515
2024 25,026
2025 27,393
30000
25000
20000
15000
NPAT
10000
5000
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Growth in Reserves
Year Reserv
es
2016 41,875
2017 45,198
2018 51,290
2019 57,915
2020 64,044
2021 74,612
2022 85,967
2023 92,524
2024 102,845
2025 112,570
120000
100000
80000
60000
Reserves
40000
20000
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Forecaste d Cash Operating Investing Financing Net Change

Activity
Flow Activitie s Activitie
s s
16-Mar 9,251 (3,750) (5,462) 40

17-Mar 10,002 (2,780) (7,138) 84
18-Mar 12,651 (6,691) (6,020) (60)
19-Mar 11,749 (5,082) (6,601) 67
20-Mar 12,924 (5,590) (7,261) 73
21-Mar 13,648 (5,903) (7,667) 78

22-Mar 15,012 (6,493) (8,434) 85
23-Mar 16,514 (7,143) (9,277) 94
24-Mar 18,165 (7,857) (10,205) 103
25-Mar 19,982 (8,643) (11,226) 113
21-Mar 12,340 (5,337) (6,933) 70
22-Mar 12,274 (5,309) (6,895) 70
Discoun 23-Mar 12,208 (5,280) (6,858) 69
24-Mar 12,142 (5,252) (6,821) 69
te d @ 25-Mar 12,077 (5,223) (6,785) 69
10.5954
%
Total 61,040 (26,401 (34,292) 347
)
Terminal Cash 2,399
Flow
PV of Terminal 1,450
Cash Flow
Total PV 1,797
No of Shares 12,292,231,
24
1
Intrinsic Value 1
Factor
Cost of
Equity
Risk Free Rate 6.45
Market 8.46
Premium
Company 0.49
Beta
Cost 10.59
5
Cost of Debt 0
WACC 10.59
Notes :

Chapter 7 : Nestle
Nestle entered India in 1912, as a trading company, importing and

selling finished products in the country for several years. In 1961, it set
up its first factory in India in Punjab to help develop India’s milk
economy. Nestle has been a pioneer in the Indian market for decades
now and has been a partner in India’s growth for over a century. They
have helped in employing about a million people, directly and
indirectly, through their activities, including farmers, and suppliers for
various goods.
Manageme
nt
Name Designation
Mr. Suresh Chairman and
Narayanan Managing
Director
Executive Director
– Finance &
Mr. David
Control and CFO
McDaniel
Mr. Martin Executive Director
Roemkens - Technical
Ms. Rama Independent
Bijapurkar Non- Executive
Director
Mr. R. V. Kanoria Independent
Non- Executive
Director
Ms. Roopa Kudva Independent
Non- Executive
Director
Dr. Swati A. Independent
Piramal Non- Executive
Director
Mr. P. R. Ramesh Independent
Non- Executive
Director

embezzlement, or bribery, neither have they been named in any

police or court proceedings. They also have a proper Audit
Committee and a Nomination and Remuneration Committee in
place.
Nestle has a strict corporate governance structure. The company has

various policies in place for the employees which include – a
whistleblower policy, a remuneration policy, a retirement policy, and
also policies on code of conduct and fair practices. Nestle is committed
to its Corporate Social Responsibility and has constituted a committee
for the same as per the provisions of the Companies Act. The main
focus areas of Nestle’s CSR program are nutrition, rural development,
education, and water & sanitation.
Holder's Name No of Share

Shares Holdi
ng
Promoters 619,683 1.91%
Foreign 833,788 2.57%
Institutions
Banks/Mutual 1,795,870 5.53%
Funds
Central Govt 8,408 0.03%
Others 899,001 2.77%
General Public 3,523,004 10.85
%
Financial 2,470,892 7.61%
Institutions
Foreign Promoter 22,310,090 68.73
%
No of Shares
Promoters
Foreign Institutions Banks/MutualFunds Central Govt
Others
General Public
Balance Sheet
Balance Sheet
Forecasting
Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24
Equitie
s
Total 3,673 1,931 1,959 2,175 2,356 2,596 2,838
Shareholde
r's Funds
Non Current
Liabilities
Long Term 35 53 (0) (0) (0) (0) (0)
Borrowings
Other Financial 1 - - - - - -
Liabilities
Non Current 58 18 18 20 22 25 27
Tax Liability
(net)
Long Term Provisions 2,465 2,90 601 682 749 839 930
7
Total Non 2,55 2,97 619 702 771 863 957
Current 9 8
Liabilities
Current Liabilities
Trade Payables 1,24 1,49 1,51 1,69 1,84 2,03 2,23
0 5 8 3 1 6 4
Other Current 457 567 576 642 698 772 847
Liabilities
Short Term 157 85 86 96 105 116 127
Provisions
Total 1,85 2,14 2,18 2,43 2,64 2,92 3,20
Current 4 7 0 1 3 4 8
Liabilities
Total Equities & 8,08 7,05 4,75 5,30 5,77 6,38 7,00
6 6 8 8 0 2 2
Liabilities
Assets
Non Current Assets
Tangible Assets 2,40 2,22 2,37 2,58 2,84 3,13 3,44
0 7 6 8 6 1 4
Capital Work-In- 105 143 153 166 183 201 221
Progress
Fixed Assets 2,50 2,37 2,52 2,75 3,02 3,33 3,66
5 0 9 4 9 2 5
Non-Current Investments 733 744 755 843 916 1,01 1,11

3 2
Long Term Loans 40 47 48 53 58 64 70
And Advances
Other Non-Current 71 80 81 91 98 109 120
Assets
Total Non 844 871 884 986 1,07 1,18 1,30
Current 2 6 1
Assets
Current Assets
5 7 2 0 0 1 5
Inventories 966 1,28 1,30 1,45 1,58 1,74 1,91
3 2 3 0 7 7
Trade Receivables 125 124 126 140 153 169 185
Cash And Cash 1,61 1,30 1,32 1,48 1,61 1,78 1,95
Equivalents 0 8 8 1 0 1 4
Short Term Loans 18 12 12 14 15 16 18
And Advances
OtherCurrentAssets 94 82 83 93 101 112 123
Total Current 4,73 3,81 3,87 4,32 4,69 5,19 5,70
Assets 8 6 4 2 8 7 2
Total Assets 8,08 7,05 4,75 5,30 5,76 6,38 7,00
7 7 8 8 9 2 3
Notes :

noticed that the forecasted assets are lesser than the forecasted
liabilities, thus the
company has a surplus assets. It is assumed that the company

pays of debts with the same and the rest is adjusted in long term
provisions.

calculated on the basis of the revenue and assets as on 31
December 2019.
P&L Forecasting Dec-18 Dec-19 Dec- Dec- Dec- Dec-23 Dec-24

20 22
21
Net 11,216 12,295 13,119 14,287 15,715 17,287 19,016
Sales/Income
from
operations
Other 335 321 342 372 410 451 496
Operating
Income
Total Income 11,551 12,616 13,461 14,659 16,125 17,737 19,511
From Operations
Expenditure - - - - -
Consumption 4,366 5,150 5,310 5,880 6,417 7,085 7,780
of Raw
Materials
Purchase of 231 218 250 263 294 321 355
Traded Goods
Increase/Decreas (6) (144) (84) (128) (122) (144) (153)
e in Stocks
Finance Cost 112 120 128 140 154 170 187
Employees Cost 1,124 1,263 1,332 1,459 1,600 1,763 1,938
Depreciation 336 316 338 368 404 445 489
Provisions 62 25 49 41 52 53 61
And
Contingencie
s
Other Expenses 2,898 2,993 3,287 3,530 3,909 4,287 4,722
Total Expenses 9,122 9,941 10,609 11,55 12,709 13,98 15,37
3 0 8
Profit before Tax 2,429 2,675 2,852 3,106 3,416 3,758 4,133
Tax 822 705 852 876 991 1,075 1,191
Profit for the year 1,607 1,970 1,999 2,230 2,425 2,682 2,943


As the year end for the company is December, growth rate is
applied on a prorated basis, assuming sales are evenly
distributed throughout the year.
20,000.00
18,000.00
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00 Net Sales/Income
4,000.00 from operations
2,000.00
0.00
Sales Growth
Year Income
2015 8,123
2016 9,159
50
2017 9,953
2018 11,216
2019 12,295
2020 13,119
2021 14,287
2022 15,715
2023 17,287
2024 19,016
50
PAT Growth
Year Net
Profi
t
2015 563
2016 927
2017 1,225
2018 1,607
2019 1,970
2020 1,999
2021 2,230
2022 2,425
2023 2,682
2024 2,934
3500
3000
2500
2000
Net Profit
1500
1000
500
0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Growth in Reserves
Yea Reserv
r es
201 2,721
51
5
201 2,917
6
201 3,324
7
201 3,577
8
201 1,836
9
202 1,863
0
202 2,078
1
202 2,259
2
202 2,499
3
202 2,742
4
52
4,000
3,500
3,000
2,500
2,000
Reserves
1,500
1,000
500
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Intrinsic Value of the Share
Forecas Operati Investi Financing Adjustme

te d ng ng Activities nt for
Net
Cash Activiti
Activities Dividend Change
Flow es
Dec-15 1,098 (70) (498) - 529
Dec-16 1,466 (127) (667) - 672
Dec-17 1,818 (131) (997) - 691
Dec-18 2,052 (52) (1,317) - 683
Dec-19 2,234 83 (3,540) 1,735 (1,223)
Dec-20 2,359 88 (3,738) 1,833 541
Dec-21 2,595 96 (4,112) 2,016 595
Dec-22 2,854 106 (4,523) 2,218 654
Dec-23 3,140 117 (4,976) 2,439 720
Dec-24 3,453 128 (5,473) 2,683 792
Dec-20 2,176 81 (3,448) 1,691 499
Dec-21 2,208 82 (3,499) 1,715 506
Discoun Dec-22 2,240 83 (3,550) 1,741 514
Dec-23 2,273 84 (3,603) 1,766 521
te d @ Dec-24 2,307 86 (3,656) 1,792 529
8.6496 Total 11,204 416 (17,756) 8,705 2,569
%
Terminal Cash Flow 29,794
PV of Terminal Cash 19,899
Flow
Total 22,468
PV
No of Shares 96,415,716
Intrinsic Value 2,330
Factor
Cost of Equity
Risk Free Rate 6.45
Market 8.46
Premium
Company Beta 0.26
Cos 8.4067
t
9
Cost of Debt 0
WACC 8.4067
Notes :

2. This growth rate values share at INR 2,330 which is lesser
compared to the market price of INR 16,531 (as on 30 July
2020) making the share overvalued in the share market.
Chapter 8 : Comparisons
Compa
n
PAT Sales P/E Market
y Cap
HUL 6,748 39,238 78.43 529,236
Dabur 1,170 6,310 59.25 85,684
Nestle 2,032 12,619 80.40 163,419
P&G 425 3,005 77.85 33,100
ITC 15,136 45,136 15.95 241,235
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
PAT
10,000
Sales
5,000
0
HULDaburNestleP&GITC
Compa Marke
n t
y Cap
HUL 529,23
6
Dabur 85,684
Nestle 163,41
9
P&G 33,100
ITC 241,23
5
600,000
500,000
400,000
300,000
Market Cap
200,000
100,000
0
HULDaburNestleP&G ITC
Profitability Ratios
Ratio HUL Dabu Nestle P&G ITC

r
ROE 86.4 22.7 68.56 21.08 23.7
(%) 8 8
ROA 36.6 16.28 26.83 11.64 38.0
(%) 4 4
Operati
ng
26.3 24.1 24.71 27.36 40.9
Margin
5 3
(%)
Net
Margi
17.17 16.07 15.74 17.06 28.25
n
(%)
From the above ratios, it is clear that all the companies are relatively
on par with respect to profitability apart from a few deviations here
and there. As a whole, ITC seems to be the best performing company
with higher margins and better return on assets.
Short Term Solvency Ratios
Ratio HU Dabur Nestle P&G ITC

L
Curre 1.31 1.98 1.78 3.8 4.13
nt
Ratio
Quic 1.02 1.98 1.18 3.29 3.2
k
Rati
o
From the above, it is clear that ITC & P&G are on the conservative
side of the spectrum, covering their short term liabilities with greater
short term assets.
Chapter 9 : Suggestions
From the above analysis, we can draw the conclusion that all the five
companies studied are performing on par with each other, with very
little difference in their margins. Thus, all the companies are
fundamentally strong. Investing in them will guarantee returns to the
investor.
However, as per the calculations of intrinsic value, taking a

conservative approach to growth, it is clear that of all the shares, only
P&G is the one that is undervalued
in the market. Thus, purchasing that guarantees higher returns.
However, the price for the share is close to INR 10,300 which might
make it difficult for an individual investor to purchase larger amount
of shares.
In that case, Dabur with a market price of around INR 490 and HUL
with a market price of around INR 2200 would be the better choice in
absolute terms. However, according to the calculations, the share is
overvalued.
Chapter 10 : References & Bibliography
 Hindustan Unilver Ltd Annual Report

 ITC Ltd Annual Report
 Procter & Gamble Health & Hygiene Ltd Annual Report
 Nestle India Annual Report
 Dabur India Ltd Annual Report
 Money Control : www.moneycontrol.com
 Yahoo Finance : https://in.finance.yahoo.com/
 IBEF : https://www.ibef.org/
 Nielsen : https://www.nielsen.com/in/en/
 Wikipedia : https://en.wikipedia.org/wiki/Main_Page

FMCG Industry Analysis

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Summer Training Report on

Submitted in partial fulfillment of the requirements for the Two Years

Under Supervision of: Submitted By:

Mrs Anju Swati Prasad

Certified that this summer training project report on FUNDAMENTAL

ANALYSIS OF THE FMCG INDUSTRY has been prepared by Swati Prasad of

MBA 3rd semester during the session 2020-2022 under my supervision .

the Director ,School of Management Sciences ,Varanasi for getting it

evaluated as per the ordinances governing of MBA course .

curriculum & in order to gain practical knowledge in the field of management, we

actual uses of what we have learnt through theoretical knowledge.

knowledge of business management. I, the student of MBA have to prepare a

Sector. & prepare training report on it.

information that I have obtain during my practical training period of FMCG

every stage. I am highly thankful to every person for helping me thought my

Let us begin my acknowledgement by thanking my Institute Project guide Mrs

of my questionnaire whose involvement in my research enabled my study to be

possible & representative.

Report “entitle “FUNDAMENTAL ANALYSIS OF THE FMCG INDUSTRY” is a

result of my own work and my indebtedness to other work publications,

references, if any, have been duly acknowledged.

Date: Swati Prasad

As a part of MBA curriculum and to gain practical knowledge in the

The Fast Moving Consumer Goods (FMCG) Sector is one of the

To do so, the financial statements of all these companies were

The analysis showed that while all companies were fundamentally

4 About FMCG Industry 6

6 Hindustan Unilever Ltd 1

7 Dabur India Ltd 1

8 Procter & Gamble Hygiene and Health 2

13 References & Bibliography 5

established distribution network, and low operational cost.

Some of the recent developments in the FMCG sector are :

1. In May 2020, Tata Consumer Products Limited acquired

Some of the major initiatives taken by the Government to promote

1. The Government has drafted a Consumer Protection Bill

1. Wallet Adjustments : Due to the COVID 19 pandemic, the incomes of

consumers have become strained. Unemployment is rampant. The

2. Rebalanced FMCG Baskets : With the outbreak of the pandemic,

continue to limit their number of shopping trips and visits to

alternatives to traditional retail channels. Moving forward, this

consumers will increasingly value connections with brands they

Hindustan Unilver is a subsidiary company to Unilever, a British Dutch company. It was

established in India in 1933 as Lever Brothers. In 1956, after a merger with

Mr. Sanjeev Mehta Chairman & Managing Director

Mr. Srinivas Phatak CFO, Executive Director

Mr. William Uijen Executive Director

Mr. Leo Puri Independent Director

Mr. O. P Bhatt Independent Director

Dr. Sanjiv Misra Independent Director

Ms. Kalpana Independent Director

Dr. Ashish Gupta Independent Director

Mr. Dev Bajpai Company Secretary, Executive

A preliminary search with respect to all members of the core

embezzlement, or bribery, neither have they been named in any police

average profits of the preceding three financial years towards CSR

Balance Sheet 19- 20- 21- 22- 23- 24- 25-

1. Sales are forecasted to grow @ 5.6% for 2020-2021 as projected

company has an external fund requirement. It is assumed that the

4. The assets are projected on the basis of Fixed Asset Turnover

P&L Forecasting 19- 20- 21- 22- 23- 24- 25-

Mar Mar Mar Mar Mar Mar Mar