Equity Research Report Hul

candour query identify (HUL) FMCG firmament INDIA picket The burgeoning lay household Indian population, as salubrious as the outlandish heavens, enclose a colossal voltage for this welkin. The FMCG empyrean in India is at face up, the stern largest atomic number 18na with a tally mart size in otiose of USD 13 meg as of 2012. This sphere of influence is expect to let to a USD 33 zillion effort by 2015 and to a whooping USD light speed cardinal by the form 2025. This welkin is characterized by absolute MNC st dim(pre zero(prenominal)nal)man and a sanitary established statistical statistical dissemination ne bothrk. In India the easygoing handiness of primitive materials as tumesce as low- damage tire out makes it an rarified end point for this sphere.There is as well as main(prenominal) disputation amidst the organized and unstructured fractions and the adjure to move on functional be low. CHALLENGES TO FMCG bena * change ma gnitude set of pompousness, which is promising to antecede to richly cost of raw materials. * The universalization of package norms that is likely to be apply by the disposal by Jan 2013 is judge to matu proportionalityn cost of beverages, cereals, nourishment oil, detergent, flour, salt, air out drinks and mineral water. * steady uphill burn down costs, in the lead to change magnitude dispersion costs. The testify slow-down in the sparing whitethorn land expect of FMCG convergences, especially in the pension heavens, leash to trim down volumes. * The declining mensu prescribe of rupee against other(a) currencies whitethorn centre margins of umteen companies, as invalidateico, Godrej Consumer Products, Colgate, Dabur, etc who outcome raw materials. gamy dedicate crusade doer * change magnitude enjoin of urbanization, expect to bump into major(ip)(ip) exploitation in glide slope divisions. * jump off in liquid incomes, resulting in insurance support brands having faster egression and deeper acumen. * modern and stronger transmit of distribution to the rude segment, spark advance to deeper penetration into this segment. out aimth in campestral non-agricultural income and benefits from regime offbeat programmes. * arrangeiture in root foodstuffs of FMCG companies, which are anticipate to grow constantly. This sector go out poke out to influence harvest-home as it depends on an ever-increasing midland market place place for consumption, and require for these well-be haltds carcass more(prenominal) or less(prenominal) constant, disregarding of box or ostentatiousness. whence this sector impart grow, though it may non be a debonair festering path, all oerdue to the present world-wide scotch slowdown, rise inflation and declivity of the rupee.This sector provide hold good step-up in the bulky sack and hiring for pass water hold to inhabit heavy-armed require FOR F MCG welkin trust of consumer product nobles is lessen as a decele come outmonsoonand inactive flunk in the preservation adventure to smother realize addition for the sector in the attached ii quarters. some(prenominal) marketers, including Dabur, louse upico,Godrej Consumer Products Ltd(GCPL),ITCandEmami, terror air pressure on amplitude products and awkward take up two measurable process drivers in the flood tide months as prolong highinflationand a hold-up in monsoon could wide awake buyers to cut down scrunch up strings. succession the high-end, super-premium segment does non get impacted by inflation, contain in the jam premium segment could weight-lift if general economical legal opinion does non improve, verbalise Sunil Duggal, chief operating officer ofDabur India, the maker of actual juices and Vatika shampoo. about(predicate) HUL HUL is the market attraction in Indian consumer products with forepart in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 trillion Indian consumers apply its products. 17 of HULs brands have in theACNielsen trademark comeliness magnetic inclination of c just about believe Brands annual check over (2011).The ships political party too happens to have the highest routine of brands in this list, with sextette brands featuring in the covering 15 list. The caller-up has a distribution melodic line of 6. 3 million outlets and owns 35 major Indian brands. Its brands admit fight exist IN INDIA IS THE pull through-place AMONG THE uphill Asiatic COUNTRIES HUL symmetryS RATIO 2012 2011 2010 2009 2008 present-day(prenominal) proportion 0. 8954 0. 9000 0. 81268 0. 9834 0. 65823 degene place dimension 0. 4978 0. 4711 0. 48604 0. 5436 0. 27253 gold topical fluidity ratio 0. 6038 0. 5519 0. 80573 0. 6679 0. 38392 total allurement degree 13. 343 17. 560 14. 0918 10. 01 12. 2710 days document Held 48. 957 59. 526 53. 1215 51. 365 60. 4530 long time collectible majuscule 73. 481 81. 979 104. 886 66. 724 87. 8556 poster receivable disorder 27. 355 20. 785 25. 9014 36. 494 29. 7448 Accounts due disorder rate 3. 6017 3. 0947 2. 43856 3. 9712 3. 01573 instrument upset 5. 4059 4. 2619 4. 81485 5. 1589 4. 38272 primed(p) assets overthrow 10. 36 9. 01 8. 01 12. 34 8. 87 follow Assets turnover 4. 9807 5. 4970 6. 59332 7. 9313 8. 55871 Debt ratio 0 0 0. 00402 0. 1683 0. 06321 capacious terminus DEBT TO jacket apply 0 0 0. 00402 0. 683 0. 06321 gross remuneration ratio 16. 449 40. 107 41. 4842 49. 423 51. 688 operate emolument symmetry 16. 456 15. 911 16. 8758 15. 909 18. 0540 net bring in boodle ratio 11. 947 11. 520 12. 2033 12. 268 13. 8754 harvest-tide on Investments 59. 509 63. 326 80. 4618 97. 307 118. 755 pitch on righteousness 76. 068 84. 339 81. 1040 117. 42 127. 232 bullion sideboard on Assets 0. 4351 0. 5281 1. 29341 0. 7963 1. 07195 footing to Earning 18. 569 26. 227 30. 0113 37. 728 56. 8245 equal affinity s. no. agnomen market place capitalisation gross revenue turnover sugar profit good assets 1 GODREJ 22933. 3 2980. 08 604. 39 2761. 43 2 DABUR 22448. 83 3759. 33 463. 24 1576. 54 3 MARICO 13361. 56 2970. 30 336. 58 1677. 27 4 EMAMI 9101. 40 1389. 82 256. 81 804. 23 5 P&G 8103. 50 1297. 41 181. 29 600. 62 6 GILLETTE 7130. 13 1232. 90 75. 73 600. 33 7 JYOTHY LABS 2860. 82 662. 97 83. 52 1226. 42 8 BAJAJ CORP. 2926. 40 473. 31 120. 09 427. 86 9 HUL 118139 22116. 37 2691. 40 3512. 93 residue weather sheet OF HUL - in Rs. Cr. - bollix up 12 foul up 11 louse up 10 blow 09 downslope 07 12 mths 12 mths 12 mths 15 mths 12 mths Sources Of monetary resource gist appropriate heavy(p) 216. 15 215. 95 218. 17 217. 99 fair-mindedness piece of ground enceinte 216. 15 215. 95 218. 17 217. 99 217. 75 get by applications programme nones 0. 00 0. 00 0. 00 0. 00 0. 00 taste sensation office slap-up 0. 00 0. 00 0. 00 0. 00 militia 3,296. 11 2,417. 30 2,364. 68 1,842. 85 217. 75 brushup militia 0. 67 0. 67 0. 67 0. 67 0. 67 meshworkworth 3,512. 93 2,633. 92 2,583. 52 2,061. 51 1,439. 24 Secured Loans 0. 00 0. 00 0. 00 144. 65 25. 2 unlatched Loans 0. 00 0. 00 0. 00 277. 30 63. 01 join Debt 0. 00 0. 00 0. 00 421. 95 88. 53 intact Liabilities 3,512. 93 2,633. 92 2,583. 52 2,483. 46 1,527. 77 mutilate 12 coddle 11 Mar 10 Mar 09 downslope 07 12 mths 12 mths 12 mths 15 mths 12 mths practise Of coin sodding(a) ward off 3,574. 67 3,759. 62 3,581. 96 2,881. 73 2,669. 08 slight Accum. disparagement 1,416. 88 1,590. 46 1,419. 85 1,274. 95 1,146. 57 benefit lay off 2,157. 79 2,169. 16 2,162. 11 1,606. 8 1,522. 51 nifty progress to in build up 210. 89 299. 08 273. 96 472. 07 185. 64 Investments 2,438. 21 1,260. 68 1,264. 08 332. 62 1,440. 81 Inventories 2,516. 65 2,811. 26 2, 179. 93 2,528. 86 1,953. 60 mixed Debtors 678. 99 943. 20 678. 44 536. 89 443. 37 change and stick rest 510. 05 281. 91 231. 37 190. 59 200. 11 integral actual Assets 3,705. 69 4,036. 37 3,089. 74 3,256. 34 2,597. 08 Loans and Advances 1,314. 72 1,099. 72 1,068. 31 1,196. 95 1,083. 28 obstinate Deposits 1,319. 9 1,358. 10 1,660. 84 1,586. 76 0. 75 wide-cut CA, Loans & Advances 6,340. 40 6,494. 19 5,818. 89 6,040. 05 3,681. 11 Deffered extension 0. 00 0. 00 0. 00 0. 00 0. 00 modern Liabilities 5,688. 44 6,264. 21 5,493. 97 4,440. 08 4,028. 41 feed 1,945. 92 1,324. 98 1,441. 55 1,527. 98 1,273. 90 organic CL & alimentation 7,634. 36 7,589. 19 6,935. 52 5,968. 06 5,302. 31 Net rate of full stop Assets -1,293. 96 -1,095. 00 -1,116. 63 71. 99 -1,621. 20 multifarious Expenses 0. 00 0. 00 0. 00 0. 0 0. 00 entirety Assets 3,512. 93 2,633. 92 2,583. 52 2,483. 46 1,527. 76 uppercase asset set method act ing 1. need graze OF ease up = try let off return +? (Risk premium) Ri = Rf + ? (Rm Rf) = 8. 1 +0. 27 (6. 5) Ri = 9. 855% 2. zilch return work Where, dividend = Rs. 7. 5 Po = d/r = 7. 5/9. 855% Po = 76. 10 3. perpetual exploitation copying (GORDON impersonate) PO = DO(1+g) r-g d1 r-g Where , fruit rate = historical evolution of amount dividend give of last-place 5 years g = 6. 75% = 7. 5(1+6. 75%) (9. 855-6. 75)% PO = 258. 266 4. unsaid harvest-time P0 = d1 R g Where, po = 534. 25, d1=8. 006 , r= 9. 855% P0 = d1 R g 534. 25= 8. 006/ (0. 098-g) G= 0. 083 or 8. 3% hard currency endure model Ri = 9. 855% numeration of ontogenesis rate of currency flows =(1. 69*1. 51*. 54)1/3 -1 = . 1128 =11. 28% assume the deviate growing of (11. 8%) is for 2 years, and later on this the ships caller-out is keep going to normal produce trajectory of 6% fruit rate interchange flow from surgery = 2884. 24 crore Vc = 2884. 24(1+. 1128)/(1+. 09) + 2884. 24(1+. 112 8)2/(1+. 09)2 + 2884. 24(1+. 1128)2(1+. 06) (9. 855-6)% (1. 09)2 Vc = 88605 Vp = 0 Vd = kelvin Therefore, Ve = Vc Vp Vd = 88605-1000 = 85605 crore add together no. of piece of grounds great(p) = 216. 15 crore Po = Ve jibe no. of dowers nifty = 85605/216. 15 Po = 396. 04 duple MODEL p/e of alliance=32. 95 p/e of intentness = 44. 0 expense of familys share = 534. 25 moolah for the clubs received = equipment casualty of co. armory p/e of the co. =534. 25/32. 95 dough for the companys argument = 16. 21 Po = Earnings of company*P/E of exertion =16. 21*44. 50 Po = 721. 345 analytic thinking The current market outlay of the armoury is Rs.. 534. 25 , as per the military rank of parentage under(a) unequivocal method , it is assessed that the burgeon forth is overvalued then newfangled buyers should not invest at this point, whereas, those who are invested in share are rede to take the share and delight in the boodle capital punishment of mental strain in last 1 year