indian fmcg industry, september 2012
DESCRIPTION
It is the EIC analysis of FMCG sectorTRANSCRIPT
The Indian FMCG Industry
Dinodia Capital Advisors
September 2012
I. Executive Summary
II. Market Overview
– Industry Overview
– Evolution of the Indian FMCG Sector
– Porter’s Five Forces Model
– SWOT Analysis
III. Industry Analysis
– Key Challenges
– Trends in the Industry
– Growth Drivers
– Government Policies
– Major Segments
IV. Investments in the Sector
– Recent M&A Deals
– Recent Private Equity Deals
V. Major Players
– Major Players
– Common Stock Comparison
1
Index
VI. Profiles of the Major Players
– ITC
– HUL
– Nestle
– Dabur
– Godrej Consumer
– Colgate-Palmolive
– Marico
– GSK Consumer
– Britannia
VII. Corporate Profile (Dinodia Capital Advisors)
2
Index
3
Executive Summary (1/2)
The Fast Moving Consumer Goods (FMCG) sector in India has been growing
at a healthy CAGR of 11% over the last decade
Riding on the back of increasing demand and changing consumer preferences,
thanks to higher disposable incomes and the retail revolution, the sector has
been posting double-digit growth over the past couple of years
The industry is volume driven and is characterized by low margins. The
products are branded and backed by skilled marketing, heavy advertising, slick
packaging and strong distribution networks. Also, raw material prices play an
important role in determining the pricing of the final product
Modern retail formats too have contributed in a major way in pushing the
growth in the FMCG sector. With rising income levels and the spread of
modern retail, the FMCG industry’s future prospects look bright which is
expected to further boost sales
Growth in the sector is led by higher urban and rural demand. Going forward ,
the government’s growing support to agriculture will drive long-term growth in
consumption from the rural sector
In our view, amongst all the FMCG segments, the food segment will
outperform over the coming years
4
Executive Summary (2/2)
The Indian food industry is a significant part of the Indian economy,(food
constitutes about 36% of the consumer wallet)
The Indian food industry is poised to grow by a whopping 63.5% from Rs
788,100crs now to Rs.1,288,900crs in next 5 years and by 137.8% to Rs.
1,874,100crs in next 10 years, throwing up huge opportunities for investments
across the entire value chain1
India faces contrasting problems of having one of the highest malnutrition
cases and also being the diabetes capital of the World.In our view, both of
these are an opportunities for Food companies. The Health foods segment is
likely to see one of the highest growth in the Food segment
To exploit this trend many companies have launched health based products
viz. Britannia launched Nutrichoice biscuits, Danone launching probiotic yogurt,
Dabur introduced a juice with fiber and HUL introduced Soya and multigrain
atta, iodized salt, energy drinks
We believe that the demand for these products is going to outpace the overall
Food Category growth for the years to come
Source: 1 India Food Guide, Edelweiss Feb’12
5
Market Overview
MARKET OVERVIEW Industry Overview Evolution of Indian FMCG Sector Porter’s Five Forces Model SWOT Analysis
Fast Moving Consumer Goods (FMCG) goods, popularly named as consumer
packaged goods, play a vital role as a necessity and as an inelastic product
The Indian FMCG sector is the fourth largest sector the economy with a total
market size of Rs. 167,100crs1
The market is estimated to grow to US$ 100 billion by 2025, according to
market research firm Nielsen
In the last decade the FMCG sector has grown at an average of 11% a year; in
the last five years, annual growth accelerated to 17%
The FMCG Industry is characterized by a well established distribution
network, low penetration levels, low operating cost, lower per capita
consumption and intense competition between the organized and unorganized
segments
FMCGs are slowly and gradually positioning and deeply penetrating in the fast
growing rural market. The Rural mindset is open to consumption of newer,
more contemporary food categories and as a result, drive consistent growth
6
Industry Overview
Source: 1 Dabur Corporate Presentation March’12
CY 10 CY 11
FMCG Industry Rural (in Rs bn)
CY 10 CY 11
FMCG Industry Urban (in Rs bn)
CY 10 CY 11
FMCG Industry Size (in Rs bn)
7
The FMCG sector in India continues
on a strong growth path with both
Urban and Rural India contributing
to its growth. Rural India contributes
one third of FMCG sales in India
Growth driven by increasing
consumption led by rise in incomes,
changing lifestyles and favorable
demographics
1,451
1,671 1,111
960
559
491
Source: 1 Dabur Corporate Presentation March’12
Industry OverviewUrban Vs. Rural
# According to Nielsen, FMCG growth was 10.7% in the rural market and10.8% in the urban market during the quarter ended December 2011; for thequarter ended March 2012, while growth in the urban market improved to16.5%, it rose even higher, to 17.2%, in the rural market*
8
Rural India accounts for more than 700 Million consumers or 70% of the
Indian population and accounts for 40% of the total FMCG market
The Rural market is a large market space with very low organized player
penetration. Across the globe, the Indian rural market is probably the single
largest “unit” of opportunity
Also with changing lifestyle and increasing consumer demand, the Indian
FMCG market is expected to cross $80 billion by 2026 in towns with
population of up to 10 lakh
The sector has a tremendous opportunity for growth in India, with the growing
population, the rising incomes, education and urbanization, the advent of
modern retail, and a consumption-driven society
Source: *Business Standard May’12
Industry Overview
9Source: HSBC Global Research December 2011
Ru
ral
pe
ne
trati
on
(%
)
There is ample room for growth in various categories of FMCG products
100%
90%
Washing pow eders
T oilet soap
Edible oil
Hair oil
80%
Tea Detergent bar
70%
60%
Biscuits
50%
40%
Toothpow der
Vanaspati
Balms
Shampoo
Toothpaste
20%
10%
Milk pow der Health
Coffee
Skin cream
Ice Cream Soft drinks
Talcum Pow der
Utensil clearners
Insencticides
Baby oil Mints Chocolates Noodles T oilet cleaners
0% Deodorants Ketchup
Floor cleaners
Urban penetration (%)
The following matrix shows the room for growth in various categories of the FMCG products:
Industry Overview
10Source: IBEF
# The industry is volume driven and is characterized by low margins
Evolution of the Indian FMCG Sector
11
Porter’s 5 Forces Model
Threat
of Substitutes : High
Bargaining
power of Suppliers: Moderate
Rivalry
among competitors: High
Bargaining
power of consumers: Low
Threat
of new entrants: Moderate• Multiple brands positioned with
narrow product differentiation
• Companies entering a category /
trying to gain market share compete
on pricing which increases product
substitution
•Low regulatory barriers
•High competitive intensity requires
large investments in brand building
which deters small players
• More MNCs entering the country
• Advertising spends continue to
grow and marketing budgets as
well as strategies are becoming
more aggressive
•High brand loyalty for some
products, thereby discouraging
customers’ product shift
•Low switching costs
•Aggressive marketing strategies
induce customers to switch
between products
Overall:
Moderately
Attractive
FMCG
Industry • Prices are generally governed by
international commodity markets,
making most FMCG companies price
takers
• Due to the long term relationships with
suppliers etc., FMCG companies
negotiate better rates during times of
high input cost inflation
12
SWOT Analysis
• Moderate operating costs
• Presence of established distribution networks in both urban and rural areas
• Presence of well-known brands in FMCG sector
• Favorable government policies
Strengths
• Lower scope of investing in technology and achieving economies of scale, especially in small sectors
• Low exports levels
• Counterfeit Products
Weaknesses
• Untapped rural market
• Rising income levels, i.e. increase in purchasing power of consumers
• Large domestic market- a population of over one billion
• Export potential
• High consumer goods spending
Opportunities
• Removal of import restrictions resulting in replacement of domestic brands
• Slowdown in rural demand
• Tax and regulatory structure
Threats
13
Industry Analysis
INDUSTRY ANALYSIS Key Challenges Trends in the Industry Growth Drivers Opportunities in the Sector Government Policies Segment Overview
14
Key Challenges
• Commodity prices fluctuate, which make it difficult to finalize rawmaterial prices, affecting the final price of the product
• Indian consumers are very price-sensitive and value conscious,making it difficult for FMCG firms to pass on the increased costs
Price of inputs
• Private labels serve to lower the consumer’s price points,particularly at the mass level
• Conflicts of interest when a retail chain has its own label whosepackaging looks like category leaders’ and stocks brands ofother manufacturers, (in terms of display space, promotions etc)
Emergence of Private Labels
• These products narrow the scope of FMCG products in rural and semi-urban market
• The spurious pass off products affect large, high quality brandswhich have actually invested money in research anddevelopment to create their products and build brand equity
Counterfeit and Pass-offs
• Power Costs
• Transportation Infrastructure
• Agricultural Infrastructure
Infrastructural Bottlenecks
15
Industry Trends
Companies are now focused on improving their distribution networks
to expand their reach in rural India
Consolidation
Product
innovation
Lifestyle
products
Expanding
horizons
Backward
integration
Expanding
distribution
networks
Indian FMCG companies are consolidating their existing business
portfolios
Several companies have started innovating by launching or
customizing their existing product portfolios for new consumer
segments
Lifestyle and premium range products are the current hot target
product segments among Indian FMCG players
A number of companies are exploring the business potential of
overseas markets and several regional markets
Backward integration is becoming the preferred strategy for increasing
profit margins
16
FMCG players in India are focusing on reducing their carbon footprint.
They generate the required energy from renewable sources and earn
CER credits for the same
Third-party
manufacturing
Rising
importance of
smaller-sized
packs
Increased
hiring from tier
II/III cities
Focus on
enhancing
presence in
Africa
Reducing
carbon
footprint
FMCG players often outsource manufacturing or processing of a
certain range of products to small vendors. This approach has helped
companies focus on front-end marketing
Companies are increasingly introducing smaller stock keeping units at
reduced prices. This helps them sustain margins, maintain volumes
from price-conscious customers and expand their consumer base
Small towns are emerging as significant hiring zones. FMCG
companies are hiring field staff from areas such as Kalpa (Himachal
Pradesh), Mangaliya (Madhya Pradesh), Kota (Rajasthan), and Shirdi
(Maharashtra) to sell diverse products
FMCG companies entering Africa as it helps to be close to
consumption markets within Africa. Such foreign investments are
encouraged by local governments, as they offer incentives to enter
the markets
Industry Trends
17
Growth Drivers
Growth Drivers
Large Market
FDI Support
Increasing per capita income
of urban population
Changing Profile and Mind Set of Consumer
Growing popularity of
organized retail
Rise of rural consumers
Spending Pattern
18
Opportunities in the Sector
The fragmented and untapped
huge rural market, which houses
2/3rd of the total Indian
population, is vital for the growth
of FMCG sector as a whole
In order to reduce the marketing
costs and raise efficiency
through van sales or by creating
rural supermarkets, the FMCG
companies should join forces in
targeting the fragmented and
broken rural market
Untapped Rural Market Food-Processing Industry
Penetration level as well as per
capita consumption in most
product categories like jams,
toothpaste, skin care, hair wash
etc in India is low, indicating the
untapped market potential
With 200 million people
expected to shift to processed
and packaged food, India needs
around US$ 30 billion of
investment in the food-
processing industry
Lack of Infrastructure and
storage facilities
Huge shortage of infrastructurefacilities and storage facilities inrural areas of the country, whichmakes its difficult for FMCGcompanies to market their products
Huge investments in developing
rural infrastructure and efficient
utilization of resources like our
coast line, solar energy and vast
human resources is imperative
for FMCG’s overall growth inIndia
19
Government Policies & Regulatory
Framework
Investment Approval: Automatic investment approval up to 100 per centforeign equity for NRI and overseas corporate bodies. These investments areallowed in food processing segments such as coffee and tea
FDI in organized retail: India currently allows 100 per cent FDI in Cash &Carry segment and 51% in single-brand retail, which is expected to be furtherincreased to 100%. India is also expected to allow 51% FDI in multi-brandretail, which will boost the nascent organized retail market in the country
Priority Sector: The Government of India recognizes food processing andagro industries as priority sectors
Relaxation of license rules: Industrial licenses are not required for almost allfood and agro-processing industries, barring certain items such as beer,potable alcohol and wines, cane sugar, and hydrogenated animal fats and oilsas well as items reserved for exclusive manufacturing in the small-scale sector
Statutory Minimum Price: In October 2009, the government amended theSugarcane Control Order, 1966, and replaced the Statutory Minimum Price(SMP) of sugarcane with Fair and Remunerative Price (FRP) and the State-Advised Price (SAP)
20
Segment Overview
The food and beverages
segment is the highest
contributor to the FMCG
sector
Market Segments
The FMCG market has three major segments
21
Segment OverviewHousehold Care
The detergents segment dominates
the household care segment and has
been growing at an annual growth rate
of 10-11% in the past five years
Local and unorganized players account
for a major share of the total volume of
the detergent market
The Household care segment is
plagued by intense competition and
high level of penetration. With rapid
urbanization, emergence of small pack
sizes and sachets is picking up
In the washing powder segment, HUL
is the leader and other major players
like Nirma, Henkel and Proctor &
Gamble continue to provide stiff
competition/innovation
The Indian personal care segment is set to change significantly in the coming years
as consumption habits, fuelled by rising disposable income and changing lifestyles,
align themselves with global trends. E.g. bath soaps are likely to be replaced by
shower gel or liquid soap variants and there will be growing use of hair conditioners
and electronic tooth brushes22
The Personal care segment includes personal
washing products, hair care products, oral care
products, cosmetics, skin care etc
The hair care market can be segmented into hair
oils, shampoos, hair colorants & conditioners, and
hair gels. The coconut oil market accounts for
72% share in the hair oil market
The skin care market is at a primary stage in
India. With the change in life styles, increase in
disposable incomes, greater product choice and
availability, people are becoming more alert about
personal grooming
The oral care market can be segmented into
toothpaste – 60%; toothpowder – 23%;
toothbrushes – 17%
Segment OverviewPersonal Care
23
The Food and Beverages segment
comprises of the food processing industry,
health beverage industry, bread and
biscuits, chocolates & confectionery, Mineral
Water and ice creams
The three largest consumed categories of
packaged foods are packed tea, biscuits
and soft drinks
The Indian hot beverage market is
dominated by tea and the major share of the
tea market is dominated by unorganized
players
India is one of the fastest growing branded
restaurants markets in the world, where the
organized eating-out market is currently
estimated at US$ 2 billion and growing at a
CAGR of 25%
Sahara India reportedly plans to enter into dairy production business by
opening the world's biggest dairy on April 1, 2013 and could be a serious
threat for Anand based Amul
Segment OverviewFood and Beverages
24
Investments in the Sector
INVESTMENTS IN THE SECTOR Recent M&A Deals Recent Private Equity Deals
Announced
DateTarget Acquirer Details
December 3,
2010
Naturesse
Consumer Care
Products (NC) and
Essence
Consumer Care
Products Ltd (EC)
(GCPL)
GCPL has acquired a 100% stake
in NC and EC for an undisclosed
amount in order to extend its
leadership in the specialty liquid
detergent category
February 19,
2011
International
Consumer
Products
Corporation
Marico bought an 85% stake in
the maker of Vietnam's top male-
grooming brand X-Men in a deal
estimated at US$55-60mn in
order to strengthen the presence
in the male grooming space
March 3,
2011
Soft drink and fruit
based beverages
business along
with
the brand, 'Fruitnik'
from Siva's Soft
Drink Pvt Ltd
Amrutanjan
Health Care
Ltd (AHCL)
With the deal size of US$
5.70mn, AHCL diversified its
business into 2 beverages
business
25
Recent M&A Deals
Announced Date
Target Acquirer Details
March 17,
2011
Jyothy Laboratories acquired a
14.9% stake in Henkel India for
US$ 13.20mn in an all-cash deal
in order to strengthen its urban
distribution network, as Henkel
has a strong presence in the
modern retail formats
March 28,
2011
Sweekar-
Marico Ltd's
brand
With the deal size of US$
13.04mn, for Marico, the move
was in line with its decision to
focus on its flagship brand
'Saffola'
May 6, 2011 Henkel India Jyothy
Laboratories Ltd
Jyothy Laboratories increased its
stake to 50.97% in Henkel
India from Henkel AG & Co for
US$ 25.80mn
26
Recent M&A Deals
Announced
DateTarget Acquirer Details
June 1, 2011 Darling Group
Holdings
Godrej
Consumer
Products Ltd
Godrej Consumer Products Ltd
acquired 51% stake in African hair
care firm Darling Group Holdings
in order to scale up its operations
in the region and to strengthen its
position in the hair care market
June 6, 2011 VVF Ltd-
Aramusk and
Moloy
brands
Wipro Consumer
Care
With the undisclosed deal size,
Wipro’s move was to strengthen
its position in the increasingly
competitive soap market in the
country
September
15, 2011
Blue park sea
foods Pvt. Ltd
Omega Ag-
Seeds Punjab
Ltd
Omega Ag-Seeds (Punjab)
acquired a 15% shareholding in
Blue Park Sea Foods for a total
consideration of US$ 1.63mn
December 1,
2011
Agro Tech
Foods Ltd
ConAgra Foods
Inc
North American food
giant ConAgra Foods Inc acquired
3.66% stake Agro Tech Foods
US$ 11.27mn which increased its
stake in the company to 51.77%27
Recent M&A Deals
Announced
DateTarget Acquirer Details
December
21, 2011
Amrit
Banaspati
Company Ltd
edible
oil business
New York based food company -
Bunge Limited acquired the edible
oils and fats business of Amrit
Banaspati Company Limited for
US$ 78mn
February 16,
2012
Paras
Pharmaceutical
s- personal
care business
Marico Ltd Marico Limited is acquiring
personal care business of Paras
Pharmaceuticals from Reckitt
Benckiser for an undisclosed
amount
June 15,
2012
Henkel India
Ltd
Jyothy
Laboratories Ltd
Consumer goods company Jyothy
Laboratories Ltd is merging
Henkel India Ltd with itself to
consolidate its personal care
products business under a single
umbrella
August 13,
2012
BP Egro Ltd HNI Corporation American Furniture company –
HNI Corp has acquired 95% stake
in office furniture company BP
Egro for~ Rs.200 crores28
Recent M&A Deals
Announced
DateInvestee Investor
%
Stake
Investment
Value (US$ mn)
February 1,
2011
Milk Mantra
Dairy Pvt Ltd
Aavishkaar Venture
Management
services Pvt Ltd
NA 5
March 28,
2011
Hector
Beverages Pvt
Ltd
Catamaran Investment
Pvt Ltd, Footprint
Ventures, and four
angel investors
NA 1.30
April 6, 2011 Bush Foods
Overseas
Standard Chartered PENA 25
June 27, 2011 Prakash
Snacks
Sequoia CapitalNA 30
August 12,
2011
Capital Foods Future Ventures India
Ltd3% NA
August 19,
2011
Manpasand
Beverages Pvt
Ltd
SAIF Partners India
NA 10
October 18,
2011
VVF Ltd Reliance Equity
AdvisorsNA 29.57
29
Recent Private Equity Deals
Announced
DateInvestee Investor
%
Stake
Investment
Value (US$ mn)
November 14,
2011
VKS Farms
Pvt Ltd
Ventureast Life FundNA 5.43
December 6,
2011
Sresta
Natural
Bioproducts
Ltd
Peepul Capital
NA 15
January 23,
2012
Godrej
Consumer
Ltd
Temasek through
Baytree Investments 4.9% 136.45
April 10, 2012 Marico Ltd GIC and Baring Private
Equity Partners India5% 100
April 25, 2012 Adiga's-
fast food
chain
New Silk Route Partners
NA NA
May 24, 2012 STEAMMO (F&B Chain)
IncuCapitalNA 0.07
July 13,2012 Blue Star Ltd Saif Partners NA 8.5730
Recent Private Equity Deals
31
Major Players
MAJOR PLAYERS Strong FMCG Brands Common Stock Comparable Analysis
32
Strong FMCG Brands
33
Common Stock Comparison (Rs. In Crs)
Source: As per research reports available from leading brokers like Goldman Sachs, Citi Group etc.
S no. Company Name
1 ITC (standalone) 31-Mar-12 226.85 781.84 Rs. 177,360.96 (Rs. 2,739.84) Rs. 174,621.12
2 HUL (consolidated) 31-Mar-12 409.90 216.15 88,600.40 (1,978.13) 86,622.27
3 Nestle (Consolidated)* 31-Dec-11 4,602.85 9.64 44,378.71 798.20 45,176.91
4 Dabur (consolidated) 31-Mar-12 106.40 174.21 18,535.95 629.19 19,165.14
5 Godrej (consolidated) 31-Mar-12 479.65 34.03 16,322.37 924.17 17,246.54
6 Colgate (Standalone) 31-Mar-12 1,116.00 13.60 15,176.80 (309.80) 14,867.00
7 Marico (consolidated) 31-Mar-12 174.50 61.49 10,730.61 606.92 11,337.53
8 GSK Consumer* 31-Dec-11 2,541.10 4.21 10,686.73 (1,200.10) 9,486.63
9 Britannia (Consolidated) 31-Mar-12 592.50 11.95 7,077.46 119.57 7,197.03
Financials as
on ….
Share
Price
Shares
Outstandi
ng
March'12
Market Cap Net Debt 2012 EV
S no. Company Name 2012 2013E 2012 2013E 2012 2013E
1 ITC (standalone) Rs. 24,798.00 Rs. 29,183.40 Rs. 8,474.00 Rs. 10,621.80 Rs. 6,162.37 Rs. 7,277.70
2 HUL (consolidated) 22,987.73 25,826.40 3,034.96 3,500.40 2,790.66 3,025.20
3 Nestle (Consolidated)* 9,125.40 11,124.70 1,871.60 2,311.20 1,187.10 1,429.10
4 Dabur (consolidated) 5,305.42 5,960.30 890.17 1,044.90 644.11 759.40
5 Godrej (consolidated) 4,850.94 5,646.10 840.18 1,010.70 726.72 662.00
6 Colgate (Standalone) 2,623.85 3,051.30 509.14 691.30 446.47 514.50
7 Marico (consolidated) 3,996.81 4,850.99 474.09 642.76 317.11 432.01
8 GSK Consumer* 3,118.30 3,643.30 477.90 580.40 413.20 498.50
9 Britannia (Consolidated) 5,460.75 6,355.70 286.25 412.60 199.55 264.60
Sales EBITDA Net Income
34
Common Stock Comparison (Rs. In Crs)
Source: As per research reports available from leading brokers like Goldman Sachs, Citi Group etc.
S no. Company NameEBITDA
Margin
PAT
Margin2012 2013E 2012 2013E 2012 2013E
1 ITC (standalone) 34.17% 24.85% 7.04x 5.98x 20.61x 16.44x 28.78x 24.37x
2 HUL (consolidated) 13.20% 12.14% 3.77 3.35 28.54 24.75 31.75 29.29
3 Nestle (Consolidated)* 20.51% 13.01% 4.95 4.06 24.14 19.55 37.38 31.05
4 Dabur (consolidated) 16.78% 12.14% 3.61 3.22 21.53 18.34 28.78 24.41
5 Godrej (consolidated) 17.32% 14.98% 3.56 3.05 20.53 17.06 22.46 24.66
6 Colgate (Standalone) 19.40% 17.02% 5.67 4.87 29.20 21.51 33.99 29.50
7 Marico (consolidated) 11.86% 7.93% 2.84 2.34 23.91 17.64 33.84 24.84
8 GSK Consumer* 15.33% 13.25% 3.04 2.60 19.85 16.34 25.86 21.44
9 Britannia (Consolidated) 5.24% 3.65% 1.32 1.13 25.14 17.44 35.47 26.75
Mean 17.09% 13.22% 3.98x 3.40x 23.72x 18.79x 30.92x 26.26x
Median 3.61x 3.22x 23.91x 17.64x 31.75x 24.84x
Maximum 7.04x 5.98x 29.20x 24.75x 37.38x 31.05x
Minimum 1.32x 1.13x 19.85x 16.34x 22.46x 21.44x
P/E EV/Sales EV/EBITDA
35
Profiles of the Major Players
PROFILES OF THE MAJOR PLAYERS
36
Indian Tobacco Company Company Profile
Company Snapshot
Incorporation Year 1910
Industry Group FMCG
Main Product Cigarettes
Board of Directors
Chairman Yogesh Chander Deveshwar
Exec. Director N Anand
Exec. Director P V Dhobale
Exec. Director K N Grant
Director A Baijal
ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels,
Paperboards, Packaging and Agri-Exports
It is the leading cigarette manufacturer based out of Kolkata with a 67% share of the
market by volume and 83% by value
The company is rapidly gaining market share even in its nascent businesses of Packaged
Foods & Confectionery, Branded Apparel, Personal Care and Stationery
ITC's Agri-Business is one of India's largest exporters of agricultural products
ITC is one of the eight Indian companies to figure in Forbes A-List for 2004,featuring 400 of "the world's best big companies". Forbes has also namedITC among Asia's'Fab 50' and the World's Most Reputable Companies
Company Overview
37
Products Snapshot
Indian Tobacco Company Product Portfolio
38
Products Snapshot
Indian Tobacco Company Product Portfolio
39
Financial Highlights (Rs. In Crs.)
Financial Summary
Source: Annual Report
* Debt includes Long term and short term borrowings
Indian Tobacco Company Financial Performance
40
Financial Summary
Indian Tobacco Company Financial Performance
41
Hindustan UnileverCompany Profile
Company Snapshot
Incorporation Year 1933
Industry Group Household Care
Main Product Cosmetics,
toiletries, soaps &
detergents
Board of Directors
Chairman Harish Manwani
MD & CEO Nitin Paranjpe
Exec. Director Sridhar Ramamurthy
Exec. Director Gopal Vittal
Exec. Director Pradeep Banerjee
Company Overview
HUL, a 51% subsidiary of Unilever Plc, is the largest Indian FMCG company (excluding
cigarettes) based out of Mumbai
It has a portfolio of over 50 brands across categories such as soaps, detergents, foods,
ice cream and water purifiers
The key strengths of the company are an extensive distribution network (its products
are available in over 6mn outlets), powerful brands (most of its brands are market
leaders and straddle price segments), strong balance sheet, and high-quality
management
42
Company Snapshot
Hindustan UnileverProduct Portfolio
43
Financial Highlights (Rs. In Crs.)
Financial Summary
Source: Annual Report
* Debt includes Long term and short term borrowings
Hindustan UnileverFinancial Performance
44
Financial Summary
Hindustan UnileverFinancial Performance
45
Nestle IndiaCompany Profile
Company Snapshot
Incorporation Year 1959
Industry Group Food &
Bevrages
Main Product Dairy products
Board of Directors
Chairman & MD Antonio Helio Waszyk
Director Shobinder Duggal
Director Christian Schmid
Director Pradeep Baijal
Director Rakesh Mohan
Company Overview
Nestle, a 62.8% subsidiary of its parent Nestlé S.A. of Switzerland, is India’s third largest
consumer goods company after HUL and ITC
Nestlé India manufactures products of truly international quality under internationally
famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE,
MILKMAID and NESTEA
Nestle enjoys leadership position in its core categories such as baby foods, instant
noodles, and instant coffee
It enjoys a distinct advantage over competitors in the F&B space on account of its
strong focus on developing products around the nutrition, health, and wellness platform,
and a culture of renovation and innovation in its offerings, backed by strong parent support
46
Company Snapshot
Category Category
Nestle IndiaProduct Portfolio
47
Financial Highlights (Rs. In Crs.)
Nestle India, a
subsidiary of Nestle
SA, the Swiss major
in food and
beverages, plans to
invest nearly Rs 5
billion in a Maggie
noodles and
confectionery-
manufacturing plant
in Gujarat
Source: Annual Report
* Financial Year Ends in December
Financial Summary
Nestle IndiaFinancial performance
48
Financial Summary
Nestle IndiaFinancial performance
49
DaburCompany Profile
Company Snapshot
Incorporation Year 1975
Industry Group Personal Care
Main Product Diversified
Board of Directors
Chairman Anand Burman (Dr.)
Vice Chairman Amit Burman
Exec. Director Pradip Burman
Exec. Director P D Narang
Director Mohit Burman
Company Overview
Dabur is one of India’s most trusted names and the world’s largest Ayurvedic and
Natural Health Care Company and is the second largest FMCG company in India, in
terms of Product portfolio
Dabur has three divisions in India apart from its international operations : -
o First, The Consumer care division (CCD) offers a wide range of products in hair care,
oral care, health supplements, digestives and candies, and baby and skin care products,
based on ayurveda
o Second, The consumer health division (CHD) includes over‐the‐counter(OTC)
products, Asavs, and branded ethical, and classic products. The CHD division has been
merged with CCD to leverage the companies distribution networks
o The third, Dabur Foods Ltd produces fruit juices, cooking pastes, sauces, and items for
institutional food purchases
50
Company Snapshot
DaburProduct Portfolio
51
Financial Highlights (Rs. In Crs.)
Financial Summary
Source: Annual Report
* Debt includes Long term and short term borrowings
DaburFinancial Performance
52
Financial Summary
DaburFinancial Performance
53
Godrej Consumer ProductsCompany Profile
Company Snapshot
Incorporation Year 2000
Industry Group Personal Care
Main Product Diversified
Board of Directors
Chairman A B Godrej
Director Jamshyd N Godrej
Director Nadir B Godrej
Additional Director Tanya Dubash (Ms.)
Additional Director Nisaba Godrej (Ms.)Company Overview
Godrej Consumer is among the leading FMCG companies in India - second largest
player in soaps and largest in hair color
Godrej Consumer brands, which include Good knight, Cinthol, Godrej No. 1, Expert,
Hit, Jet, Fairglow, Ezee, Protekt and Snuggy, among others, are household names across
the country
Major brands include Godrej Hair Dye (liquid and powder), Godrej Kesh Kala oil and
Nupur hair dyes in the lower end and Renew and Coloursoft in the higher segment
and give stiff competition to foreign brands in the hair colour segment
In June 2009, GCPL completed the acquisition of 49% stake in Godrej Sara Lee
Limited which had several leading brands such as Good Knight, JET, HIT, Brylcreem and
KIWI
The company employs 950 people and has three state-of-the-art manufacturing facilities
at Malanpur (M.P.), Guwahati (Assam) and Baddi (H.P.)
54
Company Snapshot
Source: HSBC Global Research December 2011
Godrej Consumer ProductsProduct Portfolio
55
Financial Highlights (Rs. In Crs.)
Financial Summary
Source: Annual Report
* Debt includes Long term and short term borrowings
Godrej Consumer ProductsFinancial Performance
56
Financial Summary
Godrej Consumer ProductsFinancial Performance
57
Colgate-PalmoliveCompany Profile
Company Snapshot
Incorporation Year 1937
Industry Group Household Care
Main Product Preparations for oral or
dental hygiene
Board of Directors
Chairman D Samuel
Vice Chairman R A Shah
Deputy Chairman P K Ghosh
MD M V Deoras
Director P E Alton
Company Overview
Colgate, 51% owned by Colgate USA, is the largest oral-care company in India.
Supported by a wide distribution network, it derives over 96% revenue from this
category
The company's 51% stake is owned by the foreign promoters (colgate-palmolive group),
around 26% by individuals and around 21% by institutional investors.
Colgate has also driven inorganic growth through acquisitions, namely Hindustan Ciba-
Geigy Ltd, CC Health Care Products Pvt Ltd, Professional Oral Care Products Pvt. Ltd.,
Advanced Oral Care Products and SS Oral Hygiene Prod
Colgate Palmolive is a market leader in the toothpaste segment with a market share
of ~50% in India, but is seeing increasing competition from domestic players
Oral CareToothpastes,
Toothbrushes,
Toothpowder,
Whitening products,
Kid’s products,
And Mouthwashes.
Personal careBody Wash
Liquid Hand Wash
Skin Care
Hair Care Products
Household Care Dish washing pastes
58
Company Snapshot
Product Categories
Further, it provides various dental care products for gingivitis treatment, sensitivity treatment, tooth whitening, fluoride therapy, mouth ulcer treatment, and specialty cleaning
Colgate-PalmoliveProduct Portfolio
59
Financial Highlights (Rs. In Crs.)
Financial Summary
Source: Annual Report
* Debt includes Long term and short term borrowings
Colgate-PalmoliveFinancial Performance
60
Financial Summary
Colgate-PalmoliveFinancial Performance
Marico has evolved into one of the leading Indian FMCG companies from a coconut oil
manufacturer over the past few years
It has positioned itself on the beauty and wellness platform and caters to the hair care,
health care, and skin care segments
The company operates in India, the Middle East, SAARC countries, Egypt, Malaysia,
South Africa, Singapore, and Vietnam and is headquartered in Mumbai, India
Its manufacturing facilities are located at Goa, Kanjikode (Kerala), Jalgaon
(Maharashtra),Saswad(Maharashtra), Pondicherry, Dehradun (UP) and Daman
Marico is present in more than 25 countries across Asia and the African continent
61
MaricoCompany Profile
Company Snapshot
Incorporation Year 1988
Industry Group Household Care
Main Product Oils
Board of Directors
Chairman & MD Harsh Charandas Mariwala
Director Rajeev Bakshi
Director Atul Champaklal Choksey
Director Nikhil Khatau
Director Anand Kripalu
Company Overview
62
Company Snapshot
Category Range
MaricoProduct Portfolio
63
Financial Highlights (Rs. In Crs.)
Financial Summary
Source: Annual Report
* Debt includes Long term and short term borrowings
MaricoFinancial Performance
64
Financial Summary
MaricoFinancial Performance
65
GSK Consumer Healthcare Ltd.Company Profile
Company Snapshot
Incorporation Year 1958
Industry Group Dairy products
Main Product Malted milk foods
Board of Directors
Chairman S J Scarff
MD Zubair Ahmed
Director Kunal Kashyap
Director Mukesh H Butani
Director Naresh Dayal
Company Overview
GSK Consumer Healthcare Ltd., an Indian group company of GSK plc UK (which
holds 43% in GSK), is one of the largest players in the Indian malted food drinks
(MFD) industry
It is India’s leading health food drinks (HFD) manufacturer (69% market share in HFD)
with growing presence in categories such as biscuits, noodles, snacks, sports drinks,
glucose powder etc
The company has manufacturing facilities in Nabha (Punjab), Rajamundry (Andhra
Pradesh) and Sonepat (Haryana) and has a strong marketing and distribution network
in India with direct coverage of over 700,000 retail outlets
Headquartered in the UK, GSK has over 100,000 employees worldwide, including
around 35,000 employees at 85 manufacturing sites in 37 countries
66
Company Snapshot
GSK is the undisputed dominant player in the fast‐growing under‐penetrated
domestic malted health drink segment (~70% market share) with Horlicks, Boost,
Maltova and Viva
GSK Consumer Healthcare Ltd.Product Portfolio
67
Financial Highlights (Rs. In Crs.)
Glaxo Smithkline
Consumer
Healthcare
posted a net
profit of Rs 1.31
billion for the
quarter ended
March 31, 2012
as compared to
Rs 1.10 billion in
the same period
last year
Source: Annual Report
* Financial Year Ends on December
Financial Summary
GSK Consumer Healthcare Ltd.Financial Performance
68
Financial Summary
GSK Consumer Healthcare Ltd.Financial Performance
69
BritanniaCompany Profile
Company Snapshot
Incorporation Year 1918
Industry Group Household Care
Main Product Bisciuts
Board of Directors
Chairman Nusli N Wadia
MD Vinita Bali (Ms.)
Director K K Dadiseth
Director Avijit Deb
Director Anil K HirjeeCompany Overview
Britannia Industries Limited is based in Kolkata and is famous for its Britannia and
Tiger brands of biscuits, which are popular throughout the country
With an estimated market share of ~38%, the company's principal activity is to
manufacture and sell biscuits, bread, rusk, cakes and dairy products
The Britannia brand is the trust of almost one-third of India's one billion population
CRISIL has assigned a credit rating to Britannia Industries’ as AAA rating
The biscuit industry is the largest processed foods segment in India with size
exceeding Rs.11,500crs, growing at 13-14% CAGR
Britannia has enhanced its premium cream portfolio with a launch of severaldifferentiated products including Bourbon Cappuccino, Pure Magic Praline and a newrange of creamy flavours for Treat
70
Category Range
Britannia
BritanniaProduct Portfolio
71
Financial Highlights (Rs. In Crs.)
Britannia
Source: Annual Report
* Debt includes Long term and short term borrowings
BritanniaFinancial Performance
72
Britannia
BritanniaFinancial Performance
73
Dinodia Capital Advisors
CORPORATE PROFILE
74
Dinodia Capital Advisors
Dinodia Capital Advisors
Corporate Profile
Dinodia Capital Advisors is a Financial Consulting firm
based in New Delhi, India. It assists clients across all
industries grow, both organically and inorganically. The
firm helps clients Raise Capital. Execute Mergers &
Acquisitions opportunities. Restructure, Transform and
Turnaround businesses. Resolve challenging problems.
Take advantage of financial and strategic opportunities.
Balance investor expectations. DELIVER VALUE
75
Dinodia Capital Advisors Service Offerings
Dinodia Capital Advisors Advice Clients on :
Mergers and AcquisitionsWe help in conducting a robust scan
of the market and selecting the most
suitable buyer or seller
Capital RaisingWe advice clients on their capital
needs and find them the right
partner who brings more than just
capital
RestructuringWe advise on business
restructurings to help achieve
financial, strategic and operational
efficiency
India Entry StrategyWe help set up and incubate
businesses in India, acting as a
trusted advisors to facilitate the
India entry strategy
Organizational
TransformationWe work with companies to put
systems, processes and
people in place to help take
advantage of both organic and
inorganic synergies
TurnaroundsWe work closely with companies to
help devise and implement a
turnaround strategy by plugging the
deficiencies of management,
technology, capital or partnerships
Dinodia Capital Advisors Private Limited C-37,
Connaught Place , New-Delhi 110001, Website - www.dinodiacapital.com
Tel No: +91 11 2341 7692, 2341 5272, Fax No: +91 11 4151 3666
Email: [email protected]
“We at Dinodia Capital Advisors believe in building long-term relationships based on trust with our clients,providing the highest quality and timely advice, creating an environment of teamwork, developing deep expertisein our areas of operations, hand-holding clients from start to finish and caring deeply for every match that wemake”