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P&G Research Report snapshot

Jan 14, 2004

P&G Hygiene & Healthcare (PGHH) is a 65% subsidiary of the FMCG major, P&G USA (contributes to 0.3% of global revenues and 0.4% of net profits). In India, PGHH is a focused two-product company. P&G Hygiene dominates both the segments backed by strong brands, namely 'Vicks' in the anti-cold segment and 'Whisper' in feminine care segment. These two segments form 70% of its revenues. P&G Hygiene recommended a bonus issue in the ratio of 1:2 recently. Reasons to BUY

Growth potential: As per estimates, only 20-25% of urban women in India use sanitary napkins. The ratio is much lesser in other smaller towns and rural regions. Going forward, as living standards improve, the usage of the same is likely to increase which would be largely beneficial to companies like P&G Hygiene in particular.

Brand leadership: P&G Hygiene has a dominant presence in the anti-cold segment and the feminine care category through its brands 'Vicks' and 'Whisper'. While the 'Vicks' brand addresses all segments in the anti-cold segment (Vicks Action 500 tablets, Vaporub, Inhaler and cough drops), 'Whisper' is considered a pioneer in the fast growing Indian feminine care (sanitary napkins) category. Infact, Whisper accounts for over 40% share in the Rs 3 bn sanitary napkin market.

Reasons not to BUY

Limited portfolio: P&G is largely a two-product company. Most of the parent's worldwide product folio like hair care (Head and Shoulders, Pantene) as well as detergents (Ariel and Tide) have been introduced through the parent's two 100% subsidiaries. The P&G Hygiene shareholders do not get a share of these businesses.

At Rs 456, the P&G Hygiene stock trades at 17.7x our projected FY04 earnings and market cap to sales of 3x. To view the full Research Report on P&G Hygiene please click here.

Our View on P&G Hygiene.

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P&G HYGIENE 2019-20 Annual Report Analysis (Annual Result Update)

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