Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Cadbury India: Missing 'Diwali' sweetness - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Nov 1, 2001

    Cadbury India: Missing 'Diwali' sweetness

    Cadbury India seems to have been affected by the difficult market conditions finally. As against an 11% topline growth in the June quarter, the company's sales have grown by only 5% in 3QFY02. The company's bottomline has shown 12% growth (excluding extraordinary items) during the same period.

    (Rs m) 3QFY01 3QFY02 Change 9m FY01 9m FY02 Change
    Net Sales 1,867 1,964 5.2% 4,331 4,648 7.3%
    Other Income 23 25 10.7% 44 66 49.5%
    Expenditure 1,539 1,612 4.7% 3,638 3,870 6.4%
    Operating Profit (EBDIT) 328 352 7.4% 693 779 12.4%
    Operating Profit Margin (%) 17.6% 17.9%   16.0% 16.8%  
    Interest 6 6 -4.7% 22 16 -24.2%
    Depreciation 67 73 9.1% 162 182 12.4%
    Profit before Tax 277 298 7.6% 553 646 16.8%
    Exceptional items 6 -9 - 20 -2 -
    Tax 106 106 0.9% 204 243 19.4%
    Profit after Tax/(Loss) 178 183 2.6% 369 401 8.7%
    Net profit margin (%) 9.5% 9.3%   8.5% 8.6%  
    No. of Shares (eoy) (m) 35.7 35.7   35.7 35.7  
    Diluted Earnings per share* 19.9 20.4   13.8 15.0  
    Current P/e ratio   19.0     25.9  

    The company continues to endeavor to reduce its raw material costs. As a percentage of sales, raw material costs went down by a significant 350 basis points to 38.3% in the first nine months of FY02 (January-September 2001). However, the company's advertising costs went up by 9% during these nine months as against a 7% growth in topline during the period.

    (Rs m) 3QFY01 3QFY02 Change 9m FY01 9m FY02 Change
    Raw material 768 740 -3.6% 1,811 1,778 -1.8%
    Staff 170 180 5.9% 411 461 12.4%
    Advertising/marketing 226 229 1.3% 480 524 9.2%
    Others 375 463 23.4% 1,023 1,177 15.0%
    Total expenditure 1,539 1,612 4.7% 3,724 3,940 5.8%

    As a result of the control on expenses, operating margins improved marginally to 17.9% during 3QFY02. Cadbury has clarified that the festive season sales are only partially covered in 3QFY02 since Diwali will fall in 4QFY02 (last year Diwali sales were included in 3QFY01). Based on this, one can look forward to better topline growth in the December quarter.

    We have projected a 12% growth in Cadbury's topline (Rs 6,308 m) in FY02. Bottomline projection is pegged at Rs 580 m (up 16% YoY). Going by the company's statement that festive season sales have yet to be accounted for and on the premise that the launch of new brand 'Temptations' and relaunch of key brands would provide an impetus to topline, we believe that Cadbury India is likely to meet our FY02 projections. At the current price of Rs 388 the stock trades at a P/E of 24x projected FY02 earnings.



    Equitymaster requests your view! Post a comment on "Cadbury India: Missing 'Diwali' sweetness". Click here!


    More Views on News

    GSK Consumer: On the Recovery Path (Quarterly Results Update - Detailed)

    Jun 20, 2017

    While GSK consumer reported muted revenue growth, volumes are seen to be recovering.

    A Little Gem in the FMCG Sector (Sector Info)

    Jul 18, 2016

    Will investing in Bajaj Corp yield high returns on account of a rural revival in sight?

    Parag Milk Foods Limited (IPO)

    May 4, 2016

    Should you subscribe to Parag Milk Foods' initial public offering?

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    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: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    • Track your investment in CADBURY (I) with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks