Analysis of Indian Equity

Market: With Taking

Outlook of FMCG Sector
NAME: Navjot Kaur Randhawa
PROGRAM: MBA – 2009
ENROLL. NO: 0701703908
FACULTY GUIDE : Asim Sahore
CONCEPT

Ø Fast Moving Consumer Goods (FMCG) goods are popularly

named as consumer packaged goods. Items in this category
include all consumables (other than groceries/pulses) people
buy at regular intervals.
Ø The volume of money circulated in the economy against
FMCG products is very high, as the number of products the
consumer use is very high.
Ø The Indian FMCG sector with a market size of US$13.1 billion
is the fourth largest sector in the economy.
Ø It has been estimated that FMCG sector will rise from around
Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010.
OBJECTIVES OF STUDY

Ø To study the past track recorded growth in FMCG Sector.

Ø To lay down present positions and plans of FMCG Sector.
Ø To know future perspectives of FMCG Sector.
Ø To list best Companies in this Sector.
Ø To do Equity Analysis of these companies and see the present
position in the Stock Market.
RESEARCH METHODOLOGY

Ø Research Format: Secondary Research

Ø Research Type: Descriptive and Analytical Research
Ø Sampling Design: Quantitative Research
Ø Sample Size: 14 FMCG Companies
Ø Research Instrument: Reports on FMCG Sector (India)
Balance Sheets of Companies ,and
Financial Ratios
Ø Analytical Tool: Percentage and Ratios
DATA ANALYSIS I
Urban and Rural Penetration:
High Penetration Categories > 50% Drive Up
Ø

gradation and Consumption are:-

Rural and
v Fabric Wash (84.9%)
Urban
Population
Profile
(mnUrban Rural
household)
v Personal Wash (92.8%) 2001-02 53 135
v Packet Tea (84.9%)
2009-10 69 153

Ø Low Penetration Categories:- % Distribution 2001-28 72

v Toothpaste (43.5%) 02
v Branded Atta (34.3%) Market 3768 62000
v Dish Wash (24.4%) (Towns/Village)

v Skin Care and Hair Wash (23.3%)

v Coffee, Deodorants, Jams and Ketchups
(5% approx)
Continued……….

Household Income Distribution:-

In 2003 India’s Per Capita Disposal Income was 556 US$ which
will rise to 1150 US$ in 2015
2003 2015
Continued……

Household Consumption Table

Category India % Urban % Rural %

Utensil Cleaner 28 59.9 14.4

Washing Powder 86.1 90.7 87.4

Detergent Bar 88.6 91.4 87.4

Toilet Soap 91.5 97.4 88.9

Continued………

Major Players in Personal Care

Category Market share (In Major Players
billions)
Skin Care 13 HLL

Personal Wash 46 HLL

Hair care 28 Marico

Oral care 23 Colgate

Personal Care Consumption Table

Category India % Urban % Rural %

Deodorants 2.1 5.5 0.6

Toothpaste 48.6 74.9 37.6

Skin Cream 22 31.5 17.8

Shampoos 38 52.1 31.9

 A brief description of the Indian FMCG
industry is given in the table below (2004)
Segment Unit Size Key Players Share of
Market
Leaders (%)
Household Care 62

Fabric Wash Mn Tonnes 50 HUL,P&G, 38

Market Nirma, SPIC
Laundry Soaps/ US$ mn 1102
Bar
Detergent Cakes Mn Tonnes 26

Washing Mn Tonnes 26
Powder
Dish Wash US $ mn 93 HUL 59
 Segment Unit Size Key Players Share of Market
Leaders (%)
Personal Care 58
Soaps and Toiletries Mn Tonnes 60 HUL, Nirma, Godrej

Personal Wash Market US $ mn 989 HUL, Nirma, Godrej

Oral Care US $ mn 537 Colgate Palmolive, 40

HUL
Skincare and US $ mn 274 HUL, Dabur, P&G 58
Cosmetics
Hair care US $ mn 831 Marico, HUL, 54
Cavincare, P&G,
Dabur, Godrej
Feminine Hygiene US $ mn 44 P&G, Johnson and
Johnson
 Segment Unit Size Key Players Share of Market
Leaders (%)
Food and Beverages
Bakery Products Mn Tonnes 30 Britannia, Parle, ITC

Tea 000 Tonnes 870 HUL, Tata Tea 31

Coffee 000 Tonnes 20 Nestle, HUL, Tata Tea 49

Mineral Water Mn Crates 65 Parle Bisleri, Parle

Agro, Coca-Cola,
Pepsi
Soft Drinks Mn Crates 284 Coca-Cola, Pepsi

Branded Atta 000 Tonnes 750 Pillsbury, HUL, Agro 15

Tech, Nature Fresh,
ITC
Health Beverages 000 Tonnes 120 Smithkline Beecham,
Cadbury, Nestle,
Amul
Milk and Dairy US $ mn 653 Amul, Britannia,
Products Nestle
Chocolates US $ mn 174 Cadbury’s, Nestle

Culinary Products US $ mn 326 HUL, Nestle 78

Edible Oil Mn Tonnes 13 Ruchi Soya, Marico, 28

ITC, Agro Tech
DATA ANALYSIS II

Growth Comparison of Companies

Year 2008-09
Average Growth Comparison For past 3 years
10

0
Dividend Track Record Of Year 2008-09
Companies Percentage of Dividend
given on the
value of share
Britannia India Ltd 400

Dabur India Ltd 100

ITCL 370

Marico 36

Nirma 80

Colgate Pamolive India 800

HUL 400

P&G 200
Comparison In Operating Profit Margin

Comparison in OPM
12

10

0
FINDINGS I

Ø The Indian FMCG sector with a market size of US$13.1 billion

is the fourth largest sector in the economy.
Ø Still intense competition is present between Organized and
Unorganized Sector in FMCG.
Ø FMCG Sector is expected to grow by over 60% by 2010.
Ø It has been estimated that FMCG sector will rise from around
Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010.
Ø Hair care, household care, male grooming, female hygiene,
and the chocolates and confectionery categories are
estimated to be the fastest growing segments.
Continued…….

Ø Though the sector witnessed a slower growth in

2002-2004 and 2007-09, it has been able to
make a fine recovery since then and in future.
Ø With the presence of 12.2% of the world
population in the villages of India, the Indian
rural FMCG market is something no one can
overlook.
Ø Increase in the urban population, along with
increase in income levels and the availability of
new categories, would help the urban areas
maintain their position in terms of consumption.
FINDINGS II
Ø With average OPM 19% we can see that
Companies like ITCL 34.6%, P&G 31.78% and
Colgate 20.86% are ahead in Operating Profit
Margin.
Ø Colagate Pamolive 57.2%, HUL 54.7% and P&G
28.8 % are having high Return on Net Worth,
where as Average Return On Net Worth is 28.5%.
Ø Average Sales Growth for year 2008-09 is 23.9%
which is near by the average growth of the past
3 years i.e, 20.1% and only 2 companies HUL
(50%) and Nirma (30%) making it above the
Average Sales growth.
Ø Companies like Cargil, Coca-Cola, H J Heinz and
Pepsi Co who are having a great share in the
FMCG Sector have still not made entry in the
RECOMMENDATIONS
Ø According to the findings of this research project,
more and better scope is seen in the Rural Indian
Sector for FMCG.
Ø Whereas, Urban Sector will maintain high degree
of importance with regard to the quality and
standards of products.
Ø It is also recommended that companies like HUL,
ITC and P&G will have good growth rate in future
and are better Stocks to invest in.
Ø In future with the Stock Market crossing 2100
BSE mark, the FMCG Sector will see as good
investing option.
Ø Companies like Pepsi Co and Coca-Cola will enter
the Indian Equity Market with the objective of
further expansion and growth.
BIBLIOGRAPHY
• Indian Economic Outlook for 2007-08,
PMO
• IBEF ( Indian Brand Equity Foundation)
Report 2002
• FICCI (Federation in Indian Chambers of
Commerce and Industry)
• Hindustan Unilever Ltd
• FMCG Sector Report 2002
• BSE (Bombay Stock Exchange)
• NSE ( National Stock Exchange)
• ORG Marg, AC Nielson, FICCI, India Stat
and HUL
• Statistical Outline of India (2001-02),