Indian Shaving: Expenditure prone - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Indian Shaving: Expenditure prone

Nov 3, 2000

Indian Shaving Products Limited (ISPL), the Indian arm of Gillette, has recorded a 16% growth both in turnover and net profit in the third quarter ended September 30, 2000. The company saw a sharp jump in interest outgo during the period.

(Rs m)3QFY003QFY01Change9mFY009mFY01Change
Net Sales62873116.3%1,6482,08126.3%
Other Income825216.7%28105269.6%
Operating Profit (EBDIT)1081188.7%281256-8.9%
Operating Profit Margin (%)17.2%16.1%17.0%12.3%
Interest 819151.3%294969.0%
Profit before Tax839110.1%20122712.6%
Profit after Tax/(Loss)485616.4%1331458.6%
Net profit margin (%)7.7%7.7%8.1%7.0%
No. of Shares (eoy)12.912.912.912.9
Earnings per share*15.017.513.815.0
Current P/e ratio46.4

ISPL is a significant player in Rs 5 bn Indian shaving blade market. It has over 40% value market share in the shaving products business. Its products are marketed under two main umbrella brands; 7 'O Clock and Gillette.

On a nine month consolidated basis, the company's performance looks grim. Though the company's turnover has shown a remarkable 26% jump in turnover during the period, its bottomline has shown a staid 9% growth. This is largely as a result of a significant jump in ISPL's expenditure. Its advertising and sales promotion expenses shot up by 80% during the nine month period to Rs 259 m. Overall its expenditure surged 34%. The company's interest outgo also saw a 69% jump.

Its amalgamation with Duracell India and Wilkinson Swords will start showing affect from the next quarter onwards. Though these amalgamations (especially wih Wilkinson) will help ISPL make inroads into the lower segment of the market, but the bottomline and profit margins will remain depressed since both the amalgamated companies are making meager profits.

At the current price of Rs 696, ISPL's stock trades at a P/e multiple of 46 times its FY01 annualised earnings. The company's stock tradationally has traded between 60 to 70 times its earnings. Going by its difficult short term outlook, the stock is unlikely to show much re-rating. On the longer term horizon, the company's brand name and business presence augur well for the investors.

Equitymaster requests your view! Post a comment on "Indian Shaving: Expenditure prone". Click here!


More Views on News

GILLETTE INDIA 2019-20 Annual Report Analysis (Annual Result Update)

Oct 27, 2021 | Updated on Oct 27, 2021

Here's an analysis of the annual report of GILLETTE INDIA for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of GILLETTE INDIA. Also includes updates on the valuation of GILLETTE INDIA.

GILLETTE INDIA Announces Quarterly Results (3QFY21); Net Profit Up 15.2% (Quarterly Result Update)

Feb 10, 2021 | Updated on Feb 10, 2021

For the quarter ended December 2020, GILLETTE INDIA has posted a net profit of Rs 819 m (up 15.2% YoY). Sales on the other hand came in at Rs 5 bn (up 13.3% YoY). Read on for a complete analysis of GILLETTE INDIA's quarterly results.

Adani Wilmar IPO to Hit the Market Soon. Should you Apply? (Views On News)

Nov 29, 2021

The parent company of the brand Fortune is set to raise Rs 45 bn from the market.

What Happens if ITC Hives off ITC Infotech? (Views On News)

Nov 20, 2021

The cigarette to hotel conglomerate is reportedly mulling the demerger of its software business at a valuation of around Rs 250 bn.

What Sparked an 8% Rally in ITC Shares Today? (Views On News)

Sep 16, 2021

ITC did not participate in the rally after the second wave and continued to underperform its peers. Is this about to change?

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 3, 2021 (Close)


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