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Gillette: Merger blues continue - Views on News from Equitymaster
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  • Jul 31, 2001

    Gillette: Merger blues continue

    Gillette India has posted a net loss of Rs 10 m during its second quarter ended June 30, 2001. The performance is not comparable to its 2QFY01 performance last year, as during that time the company had not amalgamated accounts of Duracell and Wilkinson.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Net Sales 828 1,032 24.6% 1,449 2,101 45.0%
    Other Income 46 19 -58.5% 80 31 -61.8%
    Expenditure 739 946 28.1% 1,312 1,895 44.5%
    Operating Profit (EBDIT) 90 86 -4.2% 138 206 49.7%
    Operating Profit Margin (%) 10.9% 8.3%   9.5% 9.8%  
    Interest 17 33 98.2% 30 58 93.6%
    Depreciation 27 82 207.5% 53 147 178.9%
    Profit before Tax 93 -10 -110.5% 136 33 -75.8%
    Tax 41 0 -100.0% 6 4 -41.7%
    Profit after Tax/(Loss) 51 -10 -118.9% 130 29 -77.4%
    Net profit margin (%) 6.2% -0.9%   8.9% 1.4%  
    No. of Shares (eoy) (m) 32.6 32.6   32.6 32.6  
    Earnings per share* 6.3 -1.2   8.0 1.8  
    Diluted Earnings per share* 6.3 -1.2   8.0 1.8  
    Current P/e ratio         172.7  

    Similarly, the 25% growth in turnover is also misleading. We do not have all the figures to make the two results comparable but as per data available, if we include Duracell's and Wilkinson's accounts in the second quarter last year, then the company had posted a net loss of Rs 38 m during 2QFY01. So in this light, Gillette has improved its performance.

    Gillette India has also reported that domestic sales for the current quarter are lower on account of trade destocking initiatives taken, following the worldwide initiative of the Gillette Company to rationalise trade inventories with resultant improvement in working capital.

    We will post an update once we have more clarity on the figures of 2QFY01.



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