P&G Hygiene & Healthcare Limited (P&G), is in a fix. Last quarter (September 2001) the company recorded a 3% decline in topline. But due to increased operating margins it managed to finish with a 6% jump in bottomline. This time around, i.e., in December quarter, the company has reported an improved 8% growth in topline. However, this seems to have come at the cost of margins.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Earnings per share*
Current P/e ratio
Though the company's topline growth is encouraging, it has had to up its expenditure in a bid to boost sales and to crack down on counterfiet products. As a result, its operating margins have declined by a significant 260 basis points to 25.3% during the quarter. As a result of this, its profit before tax and extraordinary income is up by a marginal 4.8% despite a decline in depreciation provisioning.
Had it not been for Rs 73 m it earned from gain on sale of property (Rs 49.5 m), profit on sale of investments (Rs 18.9 m) and additional income from divestiture of Clearasil Business (Rs 4.4 m), the company would have recorded a 12% decline in profits, instead of the 16% growth.
Commenting on the performance Mr. Bharat Patel, chairman, said, "The all around results reflect the outstanding performance in our core categories - Feminine Hygiene and Health care whose sales grew by 18%. In the Feminine Hygiene category, Whisper Ultra continues its unabated growth. In the Health Care category, Vicks particularly Vicks VapoRub has fared well supported by stronger distribution, innovative advertising and the continuing anti-counterfeiting crusade."
At the current price of Rs 460 the stock trades at a P/E of 10x 1HFY02 annualised earnings. Given the company's focus on operational efficiencies, the valuation is on the lower side. This is probably because of the company's two product dependence as well as concerns regarding the parent's 100% subsidiaries. But apart from this, the company is likely to be one of the key players in both anti-cold and feminine hygiene segment. The company's dividend payout is also attractive.
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: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407