Professional Documents
Culture Documents
26 OCT 2015
FMCG
Rs 1,342
Nifty
8,295
Sensex
27,471
GCPL IN/GOCP.BO
341
428/6,588
243
Rs 1,459 / 830
3M
6M
12M
Absolute (%)
1.6
15.2
32.5
Relative (%)
5.2
16.7
29.9
63.28
1.71
28.73
6.28
Source : BSE
Sachin Bobade
sachin.bobade@hdfcsec.com
+91-22-6171-7329
Mehernosh Panthaki
mehernosh.panthaki@hdfcsec.com
+91-22-6171-7340
2QFY16
22,449
4,073
2,959
8.7
2QFY15 % Change
20,601
9.0
3,415
19.2
2,384
24.1
7.0
24.1
1QFY16
20,977
3,153
2,126
6.2
FY15
82,764
13,760
9,289
27.3
46.0
32.0
23.0
FY16E
92,543
16,610
11,380
33.4
37.5
26.6
23.9
FY17E
1,05,658
19,375
13,349
39.2
32.0
22.7
23.4
FY18E
1,19,090
22,027
15,207
44.7
28.1
19.8
22.4
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO> & Thomson Reuters
2QFY16
22,449
18,377
9,654
2,394
2,540
3,790
4,073
191
241
4,023
250
3,772
723
3,050
91
2,959
(88)
2,872
8.7
8.4
2QFY15
20,601
17,186
9,831
1,933
2,117
3,305
3,415
346
227
3,535
254
3,281
718
2,563
178
2,384
(39)
2,345
7.0
6.9
% Change
9.0
6.9
(1.8)
23.8
20.0
14.7
19.2
(44.9)
6.3
13.8
(1.6)
15.0
0.7
19.0
(49.2)
24.1
NA
22.4
24.1
22.4
1QFY16
20,977
17,824
9,154
2,388
2,511
3,770
3,153
168
236
3,085
265
2,820
563
2,257
131
2,126
(134)
1992.3
6.2
5.9
% Change
7.0
3.1
5.5
0.2
1.1
0.5
29.2
13.6
2.1
30.4
(5.7)
33.8
28.4
35.1
(30.6)
39.2
NA
44.1
39.2
44.1
43.0
10.7
11.3
16.9
18.1
17.9
16.8
13.2
12.8
47.7
9.4
10.3
16.0
16.6
17.2
15.9
11.6
11.4
-470 bps
130 bps
100 bps
80 bps
160 bps
80 bps
90 bps
160 bps
140 bps
43.6
11.4
12.0
18.0
15.0
14.7
13.4
10.1
9.5
-60 bps
-70 bps
-70 bps
-110 bps
310 bps
320 bps
340 bps
300 bps
330 bps
Page | 2
Soaps
HI
Hair Care
40
61,500
35
51,500
30
25
41,500
20
31,500
15
21,500
10
11,500
Revenue Contribution
EBITDA Contribution
2QFY16
1QFY16
4QFY15
3QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
3QFY13
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
58 60 57 57 55 55 54 53 53 54 53 54 53 55 53 53
2QFY13
42 40 43 43 45 45 46 47 47 46 47 46 47 45 47 47
1QFY13
100
90
80
70
60
50
40
30
20
10
0
Domestic Business
1QFY13
2QFY15
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY13
3QFY13
2QFY13
1QFY13
4QFY12
3QFY12
4QFY12
3QFY12
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
1,500
INR/metric tonne
71,500
1QFY15
45
4QFY12
Category-wise Performance
3QFY12
Page | 3
Revenue
4,000
25
20
3,000
2,500
15
2,000
10
1,500
1,000
500
0
3,000
2,500
15
2,000
10
1,500
1,000
500
0
Other Geographies
Rs Mn
Revenue
4,000
25
3,500
20
3,000
15
2,000
10
1,500
Rs Mn
4,000
Revenue
%
25
3,500
20
3,000
2,500
15
2,000
10
1,500
1,000
1,000
500
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Revenue
3,500
3,500
2,500
Rs Mn
4,000
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Rs Mn
500
5
0
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Page | 4
Assumptions
Growth (Y-o-Y %)
DOMESTIC Total Revenue
Personal wash (soaps)
Hair colour
Household insecticide
INTERNATIONAL BUSINESS
% Of Sales
COGS (Consol)
A&P (Consol)
FY14
FY15
FY16E
FY17E
FY18E
13.9
6.3
30.5
16.4
24.2
8.6
8.5
12.6
9.4
9.2
10.8
7.0
13.9
12.2
13.0
12.6
6.1
14.2
16.3
16.0
13.4
8.2
14.2
16.3
12.0
46.8
14.6
46.4
14.6
45.6
14.1
45.4
13.8
45.5
13.6
Change In Estimates
Rs Mn
Revenue
EBITDA
EBITDA Margin
PAT
EPS
New
92543
16610
17.9
11380
33.4
FY16E
Old Change (%)
92543
16828
(1.3)
18.2
-20 bps
11070
2.8
32.5
2.8
New
105658
19375
18.3
13349
39.2
FY17E
Old Change (%)
105658
19627
(1.3)
18.6
-20 bps
12933
3.2
38.0
3.2
New
119090
22027
18.5
15207
44.7
FY18E
Old Change (%)
119090
22310
(1.3)
18.7
-20 bps
14901
2.1
43.8
2.1
Page | 5
Peer Valuations
CMP
(Rs)
Asian Paints
859
Berger Paints
221
Colgate
941
Dabur
263
Godrej Consumer 1,255
Gulf Oil Lubricants
488
Hindustan Unilever 800
ITC
358
Marico
387
Pidilite
572
Company
TP
(Rs.)
825
235
938
288
1,342
614
794
377
440
664
Rating
NEU
BUY
NEU
NEU
NEU
BUY
NEU
BUY
BUY
BUY
Mcap
(Rs bn)
822
153
256
462
427
24
1731
2836
250
293
FY15
59.0
57.9
45.9
43.1
46.0
31.3
47.4
30.0
43.5
56.8
P/E( x)
FY16E
47.9
43.3
43.7
36.4
37.5
26.8
41.4
26.9
34.4
42.0
FY17E
42.6
34.7
39.4
32.1
32.0
22.9
38.9
23.6
30.5
31.6
EV/EBITDA(x)
FY15 FY16E FY17E
37.1
30.0
26.3
30.9
24.5
20.1
31.4
28.7
25.5
35.2
29.6
25.4
32.0
26.0
21.7
19.0
15.9
13.6
32.7
29.1
27.3
19.6
17.2
15.0
28.4
22.2
19.1
37.3
26.4
20.0
FY15
31.7
22.3
81.3
35.7
23.0
41.4
104.2
33.6
36.0
24.6
ROE (%)
FY16E
32.5
25.9
69.7
33.3
23.9
42.3
107.1
33.2
34.4
28.2
FY17E
30.0
27.4
66.0
30.0
23.4
39.1
104.3
33.5
30.0
30.9
Page | 6
Income Statement
(Rs mn)
Net Sales
Growth (%)
Material Expenses
Employee Expenses
A&P Expenses
Other Operating Expenses
EBIDTA
EBIDTA (%)
EBIDTA Growth (%)
Other Income
Depreciation
EBIT
Interest
PBT
Tax
Minority Interest & Associate
Core PAT
Core PAT Growth (%)
EO items (net of tax)
RPAT
RPAT Growth (%)
EPS
EPS Growth (%)
Balance Sheet
FY14
76,024
18.5
35,547
7,489
14,959
6,401
11,629
15.3
17.2
646
819
11,456
1,074
10,383
2,104
596
7,683
(1.6)
40
7,723
(3.0)
22.6
(3.0)
FY15
82,764
8.9
38,415
7,696
16,099
6,793
13,760
16.6
18.3
854
908
13,706
1,002
12,705
2,723
693
9,289
20.9
(218)
9,071
17.5
27.3
17.5
(Rs mn)
SOURCES OF FUNDS
Share Capital
Reserves
Total Shareholders Funds
Minority Interest
Long-term Debt
Short-term Debt
Total Debt
Deferred Taxes
Long-term Provisions
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Goodwill
LT Loans & Advances
Investments
Inventories
Trade Receivables
Cash & Equivalents
ST Loans & Advances
Other Current Assets
Current Assets
Other Current Liabilities & Provs
Current Liabilities
Net current Assets
TOTAL APPLICATION OF FUNDS
FY14
FY15
FY16E
FY17E
FY18E
340
37,414
37,754
2,251
6,717
17,012
23,728
(203)
238
63,768
340
42,767
43,107
1,620
20,230
1,467
21,697
(312)
263
66,376
340
51,612
51,953
2,452
20,230
1,467
21,697
(312)
290
76,080
340
340
61,921 73,480
62,262 73,820
3,450
4,648
20,230 20,230
1,467
1,467
21,697 21,697
(312)
(312)
319
351
87,415 1,00,204
15,554
1,671
35,660
1,574
1,363
10,821
7,113
7,048
607
1,588
27,177
321
18,909
7,947
63,768
15,069
2,246
40,441
2,081
343
10,717
8,046
8,942
1,601
1,590
30,896
977
23,724
6,196
66,376
14,348
2,246
40,441
1,041
10,343
12,060
8,533
7,740
2,251
1,468
32,053
950
23,441
7,661
76,080
13,619 12,882
2,246
2,246
40,441 40,441
1,145
1,259
20,343 30,343
13,802 15,542
9,845 11,050
9,123 12,436
2,638
2,993
1,742
1,842
37,150 43,863
921
890
26,607 29,941
9,622 13,032
87,415 1,00,204
Page | 7
Key Ratios
FY14
FY15 FY16E FY17E FY18E
7,723
9,071 11,294 13,349 15,207
297 (3,951)
(16)
15
(148)
7,426 13,023 11,310 13,334 15,355
1,892
1,909
1,941
1,968
1,997
1,693
(975) (1,601)
(652)
(181)
11,011 13,957 11,650 14,650 17,171
(1,329) (1,904)
(200)
(200)
(200)
9,681 12,053 11,450 14,450 16,971
198
342
376
413
455
(4,927) (10,794) (10,000) (10,000) (10,000)
(4,728) (10,452) (9,624) (9,587) (9,545)
(2,713)
2,995
(1,074) (1,002) (1,020) (1,039) (1,060)
(1,991) (2,111) (2,534) (3,040) (3,648)
(5,777)
(118) (3,554) (4,080) (4,708)
356
628
611
600
595
40
(218)
(86)
(428)
1,894 (1,203)
1,384
3,312
7,048
8,942
7,740
9,123 12,436
PROFITABILITY (%)
GPM
EBITDA Margin
EBIT Margin
APAT Margin
RoE
RoIC
RoCE
EFFICIENCY
Tax Rate (%)
Asset Turnover (x)
Inventory (days)
Debtors (days)
Payables (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E
Interest Coverage
PER SHARE DATA
EPS (Rs/sh)
CEPS (Rs/sh)
BV (Rs/sh)
DPS (Rs/sh)
VALUATION
P/E
P/BV
EV/EBITDA
OCF/EV (%)
FCF/EV (%)
FCFE/mkt cap (%)
Dividend Yield (%)
FY14
FY15
FY16E
FY17E
FY18E
53.2
15.3
15.1
10.1
21.7
15.6
16.1
53.6
16.6
16.6
11.2
23.0
17.7
18.0
54.4
17.9
17.9
12.3
23.9
21.3
21.3
54.6
18.3
18.3
12.6
23.4
25.1
24.6
54.5
18.5
18.4
12.8
22.4
29.0
28.0
20.3
1.4
51.1
34.6
100.6
(14.9)
2.0
0.4
10.7
21.4
1.5
47.5
33.4
112.8
(31.8)
1.6
0.3
13.7
21.5
1.6
44.9
32.7
113.4
(35.7)
1.3
0.3
16.2
21.5
1.8
44.7
31.7
105.9
(29.4)
1.1
0.2
18.6
21.5
2.1
45.0
32.0
106.3
(29.3)
1.0
0.1
20.7
22.6
20.0
110.2
5.8
27.3
23.0
127.9
6.2
33.4
28.2
153.9
7.4
39.2
32.9
184.1
8.9
44.7
37.2
218.1
10.7
55.6
11.4
38.2
2.5
2.2
2.3
0.5
46.0
9.8
32.0
3.2
2.7
2.8
0.5
37.5
8.2
26.6
2.6
2.6
2.7
0.6
32.0
6.8
22.7
3.3
3.3
3.4
0.7
28.1
5.8
19.8
3.9
3.9
4.0
0.9
Page | 8
RECOMMENDATION HISTORY
Godrej Consumer
1,600
Date
3-Nov-14
6-Feb-15
29-Apr-15
09-Oct-15
26-Oct-15
TP
1,400
1,200
1,000
CMP
970
1,123
1,098
1,250
1,255
Reco
SELL
SELL
SELL
NEU
NEU
Target
875
1,010
990
1,310
1,342
800
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
600
Rating Definitions
BUY
: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL
: Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
Page | 9
Disclosure:
We, Sachin Bobade, BE, MBA, and Mehernosh Panthaki, CA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately
reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or
view(s) in this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its
Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further
Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest.
Any holding in stock No
Disclaimer:
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Page | 10