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P&G: Margins Go Through the Roof - Views on News from Equitymaster
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P&G: Margins Go Through the Roof
Feb 9, 2016

Procter & Gamble Hygiene and Health Care Ltd. announced its results for the quarter ended December 2015. The company reported an 11% YoY increase in revenues, while profits rose by 62% YoY during the quarter. Here is our analysis of the results.

Performance summary

  • Revenues grow by 11% YoY during the quarter.
  • Operating profits rise by 68% YoY as margins expand to 30.3% from 19.9% in same quarter last year.
  • Net profits rise by 62% YoY led by a strong operating performance.

Financial performance

Rs(m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Income 6,445 7,137 10.7% 12,210 13,123 7.5%
Expenditure 5,163 4,977 -3.6% 10,138 9,994 -1.4%
Operating profit (EBDITA) 1,283 2,161 68.4% 2,073 3,128 50.9%
EBDITA margin (%) 19.9% 30.3%   17.0% 23.8%  
Other income 171 206 20.6% 381 418 9.7%
Interest 5 23 400.0% 16 35 113.0%
Depreciation 159 142 -10.6% 270 269 -0.4%
Profit before tax 1,290 2,202 70.6% 2,167 3,243 49.6%
Tax 384 735 91.5% 646 1,078 67.0%
Profit after tax/(loss) 907 1,467 61.8% 1,522 2,165 42.3%
Net profit margin (%) 14.1% 20.6%   12.5% 16.5%  
No. of shares (m)   32  
Diluted earnings per share (Rs)*   126.5  
Price to earnings ratio (x)*         46.5  
Diluted earnings per share (Rs)*         78.1  
Price to earnings ratio (x)         35.9  

*trailing twelve months

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