MOSL: P&G HYGIENE AND HEALTHCARE (Neutral)-Blip in sales growth after four strong quarters
P&G HYGIENE AND HEALTHCARE: Blip in sales growth after four strong quarters; structural levers intact
(PG IN, Mkt Cap USD5.5b, CMP INR11895, TP INR11441, 4% Downside, Neutral)
- 1QFY20 (ending Jun'19) net sales grew 7.6% YoY to INR8.5b (v/s est. 9.2b). However, EBITDA declined 13.1% YoY to INR1.8b (v/s est. INR2.1b). PBT declined 12.2% YoY to INR1.8b (v/s est. INR2.1b). Adj. PAT was flat YoY at INR1.4b (v/s est. INR1.4b) due to lower corporate taxes.
- Feminine care business registered strong double-digit growth, while the healthcare business (likely to have been a laggard in 1QFY20) still reportedly grew faster than the market.
- Gross margins expanded 20bp YoY to 60.4% (v/s est. 59.0%). EBITDA margin declined 510bp YoY to 21.4%. Ad spends were up 180bp YoY (off an extremely high base) while other expenses were up 310bp YoY.
Procter & Gamble Hygiene and Health Care Limited is an India-based company, which is engaged in the manufacturing and selling of branded packaged fast moving consumer goods in the femcare and healthcare businesses. The Company offers ayurvedic products and sanitary napkins. The Company is involved in manufacturing, trading and marketing of health and hygiene products. The Company's brands include Ambi Pur, Ariel, Duracell, Gillette, Head & Shoulders, Olay, Oral-B, Pampers, Pantene, Tide, Vicks, Wella and Whisper. The Company's products include ointments and creams, cough drops, tablets, personal products and toilet preparations, among others. The Company's products are sold through retail operations, including mass merchandisers, grocery stores, membership club stores, drug stores, department stores and high frequency stores. The Company has its manufacturing locations at Goa and Baddi in Himachal Pradesh, apart from third-party manufacturing locations spread across India.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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