FINANCIAL PERFORMANCE

ANALYSIS OF FMCG
SECTOR IN INDIA

SUBMITTED BY: PRATHAM JAIN

21BCMN017
OVERVIEW OF FMCG SECTOR IN INDIA
The fast moving consumer goods (FMCG) industry or consumer packaged goods (CPG) industry is mainly
responsible for producing, distributing and marketing fast moving consumer goods. The FMCG industry is
the fourth largest sector in the Indian Economy. Household and personal care products accounts for 50% of
the sales in the industry, healthcare accounts for 31-32% and food and beverage accounts for the remaining
18-19%.

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 in revenues in FMCG sector growing from US$31.6 billion to US$52.8 from 2011 to 2017-
2018 respectively. FMCG industry in India is expected to grow at the rate of 27.9% CAGR (Compounded
Annual Growth Rate) to sum to US$103.7 billion by 2020. Additionally, the rural FMCG market is projected
to grow at a CAGR of 14.6% to reach US$100 billion by 2020 and US$220 billion by 2025. The rural setting
accounts for 45% revenue share while the urban setting dominates with 55% revenue share of the total
revenue of the FMCG industry.
Company’s Name Market Share (%)
Most Commonly sold
ITC 30 %
FMCG
HUL 14 %
Nestle 8%
• Toiletries Britania 7%
• Cosmetics Patanjali Ayurved 4%
• Household Products Dabur 2%
• Electronic goods Godrej Group 2%
• Packaged food Marico 2% 2
SWOT ANALYSIS OF ITC
LTD

3
 RATIO ANALYSIS OF ITC
1. Profitability Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
38.97 37.07 39.85 44.24 42.56
Gross Profit Margin (%)

Operating Margin (%) 36.42 34.22 36.51 40.91 39.67

27.38 25.52 27.17 31.54 26.52

Net Profit Margin (%)
27.75 24.4 21.8 23.44 21.29
Return on Net worth / Equity (%)
ROCE (%) 35.81 31.89 28.49 29.8 31.04
Return On Assets (%) 22.34 19.72 17.82 19.78 17.53

2. Liquidity Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Current Ratio 2.89 2.81 3.27 4.13 3.17
Quick Ratio 2.02 1.91 2.29 3.19 2.38

3. Leverage or Solvency Ratio -

Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Debt to Equity 0 0 0 0 0
Interest Coverage Ratios 639.94 571.51 403.54 369.66 422.36

4. Turnover Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Asset Turnover Ratio 0.83 0.76 66.74 63.85 67.34

Inventory Turnover Ratio 1.84 1.57 4.69 5.51 6.09

4
 Profit margins Returns
50 40
44.24 35.81
45 42.56
39.67 40.91 39.85 35 31.89
38.97 31.04
40 36.51 37.07 36.42 29.8
28.49 27.75
34.22 30
35 31.54 24.4
23.44 22.34
27.38 25 21.29 21.8
30 26.52 27.17 19.78 19.72
25.52
20 17.53 17.82
25
20 15

15 10
10 5
5 0
0 Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
Return on Net worth / Equity (%) ROCE (%)
Gross Profit Margin (%) Operating Margin (%) Net Profit Margin (%) Return On Assets (%)

Liquidity ratio Solvency ratio

700 639.94
4.5 4.13
4 600 571.51

3.5 3.17 3.19 3.27

500
2.81 2.89 422.36
3 403.54
400 369.66
2.38 2.29
2.5
1.91 2.02
2 300

1.5 200
1
100
0.5 0 0 0 0 0
0
0 Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23

Debt to Equity Interest Coverage Ratios 5

Current Ratio Quick Ratio
SWOT ANALYSIS OF HUL
LTD
 RATIO ANALYSIS OF HUL
1. Profitability Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
24.2 25 25.59 26.37 23.98
Gross Profit Margin (%)

Operating Margin (%) 22.32 22.92 23.3 23.85 22.55

16.74 16.95 17 16.98 15.41

Net Profit Margin (%)
20.11 18.09 16.77 82 76.95
Return on Net worth / Equity (%)
ROCE (%) 22.14 20.29 19.01 87.58 88.98
Return On Assets (%) 13.84 12.59 11.62 33.48 32.49

2. Liquidity Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Current Ratio 1.41 1.38 1.28 1.32 1.37
Quick Ratio 1.06 1.01 0.96 1.03 1.08

3. Leverage or Solvency Ratio -

Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Debt to Equity 0 0 0 0 0.01
Interest Coverage Ratios 128.61 123.73 93.69 80.43 268.64

4. Turnover Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Asset Turnover Ratio 0.83 0.74 68.39 197.4 211.01

Inventory Turnover Ratio 4.73 4.25 13.14 14.38 15.27

 Profit margins Returns
30 100
88.98 87.58
26.37 90 82
25.59 25
23.98 24.2 76.95
25 23.85 23.3 80
22.55 22.92 22.32
70

20 60
16.98 17 16.95 16.74 50
15.41
15 40 32.49 33.48
30 20.29 22.14
20.11
19.01
16.77 18.09
20 11.62 12.59 13.84
10
10

5 0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23

0 Return on Net worth / Equity (%) ROCE (%)

Mar-19 Mar-20 Mar-21 Mar-22 Mar 23 Return On Assets (%)

Gross Profit Margin (%) Operating Margin (%) Net Profit Margin (%)

Liquidity ratio Solvency ratio

300
1.6 268.64
1.37 1.38 1.41
1.4 1.32 1.28 250
1.2 1.08 1.06
1.03 1.01 200
0.96
1

0.8 150 123.73 128.61

0.6 93.69
100 80.43
0.4
50
0.2
0.01 0 0 0 0
0 0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23 Mar-19 Mar-20 Mar-21 Mar-22 Mar 23

8
Current Ratio Quick Ratio Debt to Equity Interest Coverage Ratios
SWOT ANALYSIS OF
NESTLE

9
 RATIO ANALYSIS OF NESTLE
1. Profitability Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
24.00 22.56 25.23 25.07 25.65
Gross Profit Margin (%)
21.76 20.18 22.58 22.29 22.65
Operating Margin (%)
15.67 14.14 14.58 15.59 15.91
Net Profit Margin (%)
96.95 97.20 102.89 103.12 102.58
Return on Net worth / Equity (%)
ROCE (%) 66.04 57.81 59.24 55.05 56.25
Return On Assets (%) 29.70 26.62 26.12 26.36 27.44

2. Liquidity Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Current Ratio 0.95 1.13 1.05 1.68 1.74
Quick Ratio 0.45 0.51 0.45 1.11 1.16

3. Leverage or Solvency Ratio -

Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
Debt to Equity 0.84 1.08 1.31 1.57 2.76
Interest Coverage Ratios 38.50 24.67 18.45 20.39 21.71

4. Turnover Ratio -
Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
2.01 1.97 1.83 1.77 172.43
Asset Turnover Ratio
Inventory Turnover Ratio 4.24 4.36 4.11 4.11 9.64
10
 Profit margins Returns
30 120
102.58 103.12 102.89
25.65 25.07 25.23 97.2 96.95
24 100
25 22.65 22.29 22.58 22.56 21.76
20.18 80
20 66.04
15.91 56.25 59.24 57.81
15.59 15.67 60 55.05
14.58 14.14
15
40 29.7
27.44 26.36 26.12 26.62
10
20
5
0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
Return on Net worth / Equity (%) ROCE (%)
Return On Assets (%)
Gross Profit Margin (%) Operating Margin (%) Net Profit Margin (%)

Liquidity ratio Solvency ratio

2 45
1.74 38.5
1.8 1.68 40
1.6 35
1.4
1.16 30
1.11 1.13 24.67
1.2 1.05
0.95 25 21.71
1 20.39
18.45
20
0.8
0.51 15
0.6 0.45 0.45
10
0.4
5 2.76 1.57
0.2 1.31 1.08 0.84
0 0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23 Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
11
Current Ratio Quick Ratio Debt to Equity Interest Coverage Ratios
 COMPARATIVE ANALYSIS

• ITC – ITC has highest profit margins among its

competitors it was at its peak in Mar 20 at 31.54
Net Profit margins % but there was a fall in profit margins mainly
35
due to covid but in recent years its remains flat
with 27.38 % in Mar 23.
30

25

20 • HUL – HUL’s profit margins are not that great

15 when compared to its competitors it was 15.41 %
10
in Mar 19 and 16.74 % in Mar 23. Although it
showed a positive growth over years.
5

0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
ITC HUL Nestle • Nestle – Nestle has least profit margins in
comparison to its competitors with almost of
decreasing profit margins over years this can be
due to increased cost of goods sold or pandemic
effect from 15.91 % in Mar 19 to 15.67 % in
Mar 23.
12
 COMPARATIVE ANALYSIS

• ITC – ITC has shown a positive growth in

ROE in comparison to its peers with 21.29 % Return on Equity (ROE)
in Mar 19 to 27.75 % in Mar 23. This is a one 120

of the critical sign for selecting a stock for 100

investing.
80

• HUL – HUL has worst ROE in comparison to 60

its peers from having a sharp fall from 76.95 %

40
in Mar 19 to 20.11 % in Mar 23. This can be
due to falling in net profits over years. 20

0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23
• Nestle – Nestle has the Highest ROE among its
ITC HUL Nestle
peers but there is sharp fall in recent years
from 102.58 % in Mar 19 to 96.95 % in Mar
23. This can be due to falling in net profits
over years.

13
 COMPARATIVE ANALYSIS
• ITC – ITC has the highest current ratio
among its competitors but there is a fall
from 3.17 in Mar 19 to 2.89 in Mar 23
Current ratio but it manages to maintain the ideal
4.5 ratio for current ratio which is 1.5 to 2.
4

3.5
• HUL- HUL has flat current ratio
3
between 1.37 to 1.41 but it still below
2.5
the ideal ratio which is not good for
2
investing point of view.
1.5

1
• Nestle – Nestle has lowest current ratio
0.5
in comparison to its competitors and
0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23 also it is declining from 1.74 in Mar 19
ITC HUL Nestle
to 0.95 in Mar 23. It is not able to
maintain the ideal ratio which is a point
of concern for its existing shareholders.

14
 COMPARATIVE ANALYSIS
• ITC – ITC has the worst inventory turnover
ratio among its peers with a declining ratio
from 6.09 in Mar 19 to 1.84 in Mar 23. This Inventory Turnover Ratio
might be due to increased cost of goods sold 18

over years making it difficult for selling goods. 16

14

12
• HUL – HUL has the best fingers of Inventory
10
Turnover Ratio among its competitors with
almost of doubled of ITC but there had been a 8

constant decline in ratio from 15.27 in Mar 19 6

to 4.73 in Mar 23. This might be due to the 4

increased competition. 2

0
Mar-19 Mar-20 Mar-21 Mar-22 Mar 23

• Nestle – Same as its competitors Nestle has ITC HUL Nestle

also a declining Inventory Turnover Ratio with

declining from 9.64 in Mar 19 to 4.24 in Mar
23 due to the above said reasons.
15
THANK YOU !