X

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.
Indian Shaving: Expenditure prone - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 3, 2000

    Indian Shaving: Expenditure prone

    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) 3QFY00 3QFY01 Change 9mFY00 9mFY01 Change
    Net Sales 628 731 16.3% 1,648 2,081 26.3%
    Other Income 8 25 216.7% 28 105 269.6%
    Expenditure 520 613 17.9% 1,368 1,826 33.5%
    Operating Profit (EBDIT) 108 118 8.7% 281 256 -8.9%
    Operating Profit Margin (%) 17.2% 16.1%   17.0% 12.3%  
    Interest 8 19 151.3% 29 49 69.0%
    Depreciation 26 32 25.1% 79 85 7.6%
    Profit before Tax 83 91 10.1% 201 227 12.6%
    Tax 35 35 1.4% 68 82 20.3%
    Profit after Tax/(Loss) 48 56 16.4% 133 145 8.6%
    Net profit margin (%) 7.7% 7.7%   8.1% 7.0%  
    No. of Shares (eoy) 12.9 12.9   12.9 12.9  
    Earnings per share* 15.0 17.5   13.8 15.0  
    *(annualised)            
    Current P/e ratio         46.4  

    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

    Marico: Earnings Hit by Lower Volumes and Firming Input Prices (Quarterly Results Update - Detailed)

    Aug 9, 2017

    While GST implementation brought down volumes and profitability in the short run, Marico remains optimistic in the long run.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

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

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    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

    GILLETTE INDIA SHARE PRICE


    Aug 23, 2017 02:08 PM

    TRACK GILLETTE INDIA

    • 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

    MORE ON GILLETTE INDIA

    GILLETTE INDIA 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE GILLETTE INDIA WITH

    MARKET STATS