FMCG - ITC V/s HUL
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Transcript of FMCG - ITC V/s HUL
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FMCG SectorStock Exchange
Prof. Anita Bobade
Present By :
Name Roll No.
Dinesh Bhatavkar 07Santosh Cholake 13Manoj Chorge 14Rupesh Talawdekar 48
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FMCG stands for Fast Moving Consumer Goods. FMCG Products and Categories. Personal Care, Oral Care, Hair Care, Skin Care, Personal Wash (soaps). Cosmetics and toiletries, deodorants, perfumes, feminine hygiene, paper
products. Household care fabric wash including laundry soaps and synthetic
detergents; household cleaners, such as dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish.
Frequently replaced electronic products, such as audio equipments, digital cameras, Laptops, CTVs; other electronic items such as Refrigerator, washing machines, etc. coming under the category of White Goods in FMCG.
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FMCG is the fourth largest sector of the Indian Economy
Main Characteristics of FMCG Sector :Well established distribution NetworkIntense competitionWide range of products
Presence across value chainAvailability of raw materials Low cost labor
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Hindustan Unilever Ltd. ITC (Indian Tobacco Company) Nestle India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries.
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SWOT ANALYSISStrengths :
Low operational costsPresence of established distribution networks in both
urban and rural areasPresence of well-known brands in FMCG sector
Weaknesses :Lower scope of investing in technology and achieving
economies of scale, especially in small sectorsLow exports levels"Me-too" products, which illegally mimic the labels of the
established brands. These products narrow the scope of FMCG
products in rural and semi-urban market.
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SWOT ANALYSISOpportunities:
Untapped rural marketRising income levels, i.e. increase in purchasing power of
consumersLarge domestic market- a population of over one billion.Export potentialHigh consumer goods spending
Threats:Removal of import restrictions resulting in replacing of
domestic brandsSlowdown in rural demandTax and regulatory structure
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ITC LimitedITC was incorporated on August 24, 1910 under the
name Imperial Tobacco Company of India Limited
In 1970 CO. Name Changed to India Tobacco Company Limited and then to I.T.C. Limited in 1974
Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal Care
Market capitalisation of nearly US $ 18 billion and a turnover of over US $ 5 billion.
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Exemplary Contribution
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ITC - Product Range
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SALES & PBIT MIX
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ITC on Stock Market
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Hindustan Unilever Ltd.Hindustan Unilever Limited (HUL), earlier called
Hindustan Lever Limited (HLL) was established in 1933 as Lever Brothers India Limited.
HUL is India's largest FMCG Company, with a customer base of 2 out of every 3 Indian in the category of Home & Personal Care Products and Foods & Beverages.
The company has combined volumes of about 4 million tonnes and sales of Rs.10, 000 crores.
HUL is also one of the country's largest exporters; the Government of India has recognized HUL as a Golden Super Star Trading House.
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HUL on Stock Market
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Quarterly Performance
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Ratio Analysis of FMCG
COMPANIES EPS Inventory turnover
Debtors turnover
D/E Current
ratio PAT% ROCE% EBIT%
HUL 11.46 9.26 20.95 0.2 0.89 11.4 122.83 13.86Asian paints 37.78 9.8 16.02 0.06 1.03 7.97 49.35 12.39Britannia 75.51 14.54 64.88 0.03 0.84 5.75 25.29 6.08ITC 8.65 5.51 21.32 0.01 1.42 29.18 34.61 28.38Dabur 4.32 10.94 22.63 0.19 1.19 17.19 47.98 17.11Marico 2.33 8.22 37.42 0.84 1.48 7.35 38.8 13.06
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Compare with Sensex
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CONCLUSIONHUL's up-and-running business model is a treat for
investors seeking exposure in the FMCG segment. The company has delivered in the past and has the potential to do better in future. In the small and medium term, ITC's growth story is still evolving.
ITC is eyeing the pie which HUL and other FMCG players currently enjoy. Though risky, the company's business model will pay off in the long run. ITC has proved its expertise in the cigarettes, hotels, paper and agri-businesses. Investors who want to bank on its execution ability in FMCG can consider the stock with a long-term horizon.
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RECOMMENDATIONSAccording to us the companies should continue
with their CSR and also continue with their strategies.
The thing need to be changed is that, ITC should go for more diversification in Non cigarette segment (FMCG)
HUL should come up with the new strategies that could take the new product forward to create a new segment.
A common recommendation for both is that they should focus on rural area more.
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BIBLIOGRAPHY
Web Sites :
Investopedia.com Itcportal.com HUL.co.in Moneycontrol.comArticalesbase.com
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