Gillette India (earlier Indian Shaving Products) has improved its 1QFY02 bottomline by a marginal 5%. However, its turnover has shown a marked improvement by 72%. These are the consolidated numbers which include Duracell (India) and Wilkinson Sword India's figures.
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
Gillette is a leader in the Rs 5 bn Indian shaving blade market with a share of over 40% (in value terms). Its products are marketed under two main umbrella brands; 7 'O Clock and Gillette. Although these amalgamations (especially with Wilkinson) will help Gillette make inroads into the lower segment of the market, the bottomline and profit margins will remain depressed in the coming quarters since both the amalgamated companies are making marginal profits.
The company's figures have shown a marked decline in bottomline growth since the expenses have been on a consistent uptrend as a result of the amalgamation with Duracell and Wilkinson.
Expenses as a % of sales
Raw material cost
At the current price of Rs 367, the stock is trading at a P/e multiple of 77 times its annualised 1QFY02 earnings, which is the highest among FMCG companies in India. The company has historically got higher valuations based on its global brand name as well as its dominance in the branded shaving product industry of India. Nevertheless the valuations are quite high looking at the short term outlook. In the longer term however, the company might start getting better returns out of its investments.
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