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.
Procter & Gamble Hygiene and Health Care has announced the first quarter results of the financial year ended June 2017 (1QFY17). The company's sales rose by 12.5%YoY while net profit rose by 50.1% YoY during the quarter.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407