21 september 2020 hsie consumer conference hsie consumer
Post on 21-Dec-2021
8 Views
Preview:
TRANSCRIPT
21 September 2020 HSIE Consumer Conference
HSIE Consumer Conference
HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
We hosted a Consumer Conference-2020 and invited senior management of
various FMCG and Appliance companies. Most companies have witnessed a
sequential recovery in July, Aug, and Sep and are confident on sustaining
healthy growth in the coming months, provided there are no further
lockdowns. Category leaders are gaining market share by capitalising the
situation. A quick resumption of production, smoother supply chain, rapid
new launches, and trade-friendly strategies have supported the big players.
FMCG companies have continued to enjoy traction on packaged foods, health
and hygiene. At the same time, Appliance companies are seeing traction
across B-C products and gradual improvement in B-B. Our thesis seems to
play out for most companies, and it gives us confidence in our earnings
estimates.
Following is the participant list and conference takeaways:
Companies Participants
ITC
Supratim Datta
Abhijeet Roy
Karthik Bhanu
Dabur
Lalit Mallik
Gagan Ahluwalia
Ankit Joshi
Marico Ruby Ritolia
Vami Doshi
Havells Manish Kaushik
Prashant Saraswat
Voltas Manish Desai
Crompton Consumer Sandeep Batra
Yeshwant Rege
TTK Prestige Chandru Kalro
K. Shankaran
Radico
Dilip Banthiya
Mukesh Agarwal
Saket Somani
Symphony
Nrupesh Shah
Bhadresh Mehta
Milind Kotecha
Varun Lohchab
varun.lohchab@hdfcsec.com
+91-22-6171-7334
Naveen Trivedi
naveen.trivedi@hdfcsec.com
+91-22-6171-7324
Aditya Sane
aditya.sane@hdfcsec.com
+91-22-6171-7336
Page | 2
HSIE Consumer Conference: Key Takeaways
ITC
FMCG marches on
ITC continues to witness good traction in its FMCG portfolio and company is capitalising
on rising demand for packaged food, health and hygiene categories. Several brand
extensions are happening (particularly under Savlon brand) and company is confident on
achieving strong growth, even if there is moderation in demand from the current elevated
levels once the situation normalises. Cig recovery was healthy in June up to mid-July but
thereafter localised lockdowns impacted the pace. Of late, some progressive recovery is
being witnessed and hopefully business will move towards a steady-state in 2HFY21.
Key Takeaways:
Recovery trend in cigarettes continued for the first 10 days of July. However, following
that, due to sporadic and localised restrictions, recovery has been hampered.
ITC has not been able to perceive any significant downtrading on cigarette product mix.
The company has gained share in Q1.
The company has progressively developed the capacity to manufacture 100% of its
capsule requirement. Currently about 80-85% of total capsule requirements are
manufactured in-house. ITC has a 60%+ market share in capsules; overall share is >75%.
Higher demand for packaged food, health and hygiene categories have been giving
opportunity for the company to capitalize on its wide product portfolio.
Savlon has seen exponential growth, and several brand extensions have better
addressability of the market opportunity.
The company's frozen food range witnessed good traction as the lockdown and higher
home consumption has provided strong impetus to the category.
For packaged food, the company has been focusing on reducing the distance to market.
Many sub-segments of FMCG brands have competitive margins. Company is committed
to sustaining margin expansion going forward; the segment has been witnessing strong
margin expansion over the last 3 years.
The recent acquisition of Sunrise is to allow the company to have a sizeable presence in a
large category which is driven by regional brands. Spices are the fourth largest category in
FMCG, and the company will focus on gaining share in the newer markets for Sunrise.
In terms of capital allocation, major capex in Hotels & FMCG has already been done.
The dividend payout policy has already been revised (payout ratio will be 80-85%).
Acquisitions will always be on the radar but it has to fit on all aspects in terms of value
creation for the company.
Page | 3
HSIE Consumer Conference: Key Takeaways
Dabur India
On the cusp of recovery
Dabur has witnessed healthy recovery as restrictions have been lifted. Initially, categories
like OTC FMCG, Hygiene and Oral Care saw strong traction. However, recovery is now
visible across the board. The recovery has been faster in rural markets than urban, and the
company’s strong rural presence has helped it capitalise on the trend. Dabur has managed
to keep channel inventory low, and it has focused on improving supply chain efficiency by
eliminating 25% of tail SKUs. International markets like Turkey, Egypt and Bangladesh
have posted strong cc growth. However, MENA and Nepal have continued to struggle.
While gross margins continue to remain under pressure owing to raw material inflation,
cuts in discretionary cost are expected to help the company maintain its margins in FY21.
Key Takeaways:
▪ Recovery is healthy across the products, ease in localised lockdown further supporting the
demand. Macros are still not favourable (high unemployment rate, etc.) and not sure
consumer sentiments and income growth will impact the demand in the medium term.
▪ Festive demand is expected to be strong, with pent-up demand supporting the festive
season offtake.
▪ OTC, health and hygiene products have continued to witness strong traction.
▪ Juices have continued to struggle as out of home consumption has remained low. Juices
have been dragged primarily by LUPs, while the 1 Ltr pack has witnessed growth in
2QFY21 due to higher at-home consumption.
▪ Dabur has launched several new variants within Juices in select markets, which have been
received well.
▪ The company is also looking for strategic product expansions, and it has forayed into
edible oil with the launch of mustard oil. Edible oil is Rs 20bn category, with mustard oil
forming 10% of that. Unorganised players dominate most of this market. Hence, Dabur is
well-positioned to capture market share.
▪ Rural growth has remained ahead of urban, and the company expects this trend to
continue owing to a strong monsoon and government incentives. Dabur is poised well to
capture this growth as the company has grown its village coverage to 54,500.
▪ Recovery in International markets has remained mixed. Turkey, Egypt, North America
and Bangladesh have posted robust cc growth. However, Nepal and MENA have
continued to struggle, and the recovery has been gradual.
▪ Gross margin has been impacted by inflation in raw materials (amla). However, the
company is looking into cutting back on discretionary expenditure. The savings will be
invested in A&P to establish better brand presence and improve market share.
▪ The company intends to maintain its EBITDA margins at the FY20 level.
Page | 4
HSIE Consumer Conference: Key Takeaways
Marico
High focus on new launches and market share gain
Marico has witnessed a gradual recovery in its portfolio as discretionary expenditure
increased slightly, and lockdown restrictions were lifted. Recovery has been driven by the
strong growth in Saffola and recovery in PCNO. Premium VAHO remained weak due to
weak discretionary spend. While mid and economy segments of VAHO have recovered
well and has been seeing YoY growth. The company is trying to capitalise the spur in rural
demand. Marico’s International portfolio has performed better than domestic as
Bangladesh continued to grow in double digits, and Indonesia also started showing
recovery trends. Copra is still seeing inflation but will see a moderation in 2HFY21.
Company has increased consumer offers on PCNO to gain market share. Company is not
focusing on gross margin expansion but expects EBITDA margin will be strong at 20% in
FY21 (similar to FY20). The company is confident of achieving strong traction on new
launches, and aggressive launches will continue.
Key Takeaways:
▪ Saffola portfolio is sustaining healthy growth momentum, as consumers remain focused
on health. The company expects that consumer trend on health and hygiene will remain
strong even in the medium term. Increase in home cooking has also driving Saffola as
consumers have flocked to trusted brands.
▪ PNCO has seen healthy recovery; production constraints for unorganised manufacturers
have aided PCNO as the company witnessed an accelerated shift from loose to packaged
oil. The focus remains on gaining market share. Marico enjoys a 60% market share in
PCNO in urban markets while market share in rural markets is 40%.
▪ The company has also taken initiatives for ensuring last-mile delivery in urban areas
through partnerships with Swiggy, Zomato, Dunzo and directly.
▪ Discretionary categories have continued to remain under pressure and recovery in VAHO
has been gradual. However, while the premium segment has continued to struggle,
VAHO has seen traction at the bottom of the pyramid. The company has seen growth
returning from May in the value segment. Even the mid-segment is on the growth
trajectory now.
▪ Haircare and other premium portfolios like beauty products have witnessed gradual
recovery. Although these categories have not returned to growth yet, recovery is visible,
MoM.
▪ The company’s presence in 58,000 villages has supported recovery as rural demand has
been stronger than urban.
▪ Copra is still seeing inflation, but management expects that prices will be soft in FY21.
Company has increased consumer offers for PNCO to gain market share. The company is
focused on gaining market share and not focusing on expanding gross margin. Cost
savings in A&P and other discretionary expenses will support EBITDA margin.
▪ The company has set a cost-saving target of Rs 1.5bn in FY21. The company aims to
achieve a 20% EBITDA margin in FY21.
Page | 5
HSIE Consumer Conference: Key Takeaways
Havells
B-C leads the way; confident on Lloyd recovery
Havells has witnessed strong recovery across its B-C portfolio since states began lifting
restrictions. The recovery has been aided by increased demand for consumer durables due
to WFH as well as the company’s strong retail footprint. Lloyd has received positive
feedback, and extended summer in the north region resulted in strong demand for its RAC.
Initiatives like an online-to-offline platform and expanding rural reach have helped the
company recover quicker than its peers and gaining market share. B-B demand has been
improving slower than B-C, impacted by lower government expenditure and delay in
Capex by private entities.
Key Takeaways:
▪ The B-C portfolio has witnessed broad-based recovery for Havells. While recovery began
with categories like personal grooming, fans and RAC in May, it has been uniform since
June. Supply constraints for unorganised players have also aided market share gain.
▪ B-C lighting has seen prices stabilise, which has helped maintain margins for the
company.
▪ Dealer buying was also led by demand, and inventory levels have normalised.
▪ However, the company expects higher demand as dealers begin stocking up for the festive
season.
▪ B-B revenue has continued to be weak for Havells despite restrictions being lifted across
the country. Due to private entities deferring Capex and low government expenditure.
▪ Distribution expansion has also been supporting the recovery phase. Consumers remain
unwilling to venture far from their homes, and the strong retail presence has driven
recovery for Havells.
▪ Additionally, the company is also focusing on expanding its rural presence. It has
established a distribution network in 2,000 towns and expects it to grow to 3,000 towns in
the near term.
▪ Rural revenue mix is expected to grow gradually as electrical goods are dependent on
infrastructure, which is still being developed.
▪ RAC has performed well in 2QFY21 despite it being an off-season quarter, and Lloyd has
been able to capitalise on the demand in Northern markets.
▪ Havells has focused on driving Lloyd’s recovery by expanding into new categories. The
company has launched a full range of refrigerators, and it intends to expand the Washing
Machine line-up.
▪ Beginning production in the new factory for Lloyd has allowed Havells to control the
entire supply chain providing Lloyd with stability and allowing it to meet market
demand.
▪ Company is not focusing on the TV panel business until it finds differentiated consumer
offering. TV panel will support Lloyd as portfolio play.
▪ Paying suppliers on time had stretched the working capital, but it ensures the smooth
supply once the production begins. It gave competitive advantage by quick filling the
trade channel.
▪ Havells was always a manufacturing-focused company; therefore, Make-in-India and
Aatmanirbhar Bharat do not require any further acceleration in its Capex plan.
Page | 6
HSIE Consumer Conference: Key Takeaways
Voltas
Confident of gaining market share across the portfolio
Extended summer in the north region and market share gain, continues to help in lowering
down the trade inventory for Voltas. Onam was below expected, but Volt-Beko has seen
strong growth. The company remains optimistic about the upcoming festive season. Voltas
has continued to gain market share in RAC, and it has extended the market share gap from
the second player (LG) to 14.2%. The company is now focusing on scaling Volt-Beko and
expects it to be one of the key growth triggers going forward. EMPS execution remains
slow, although labour challenges have reduced. High provisioning and slow execution will
keep the pressure on margin for the next 2 quarters.
Key Takeaways:
▪ Although the RAC industry had seen weak consumer offtake, Voltas has continued to
dominate the category and gain market share. The company is the market leader across all
markets within the country, with a 14.2% gap in market share from its nearest competitor
(LG).
▪ Voltas believes that the market share gain has been a result of multiple factors, i.e. product
range, competitive pricing and distribution expansion.
▪ Extended summer in July in the north region lower down the trade inventory; however, it
is still higher by 15-20 days owing to weak sales during the summer.
▪ Inventory levels are lower in North and South; they remain elevated in the West and East.
▪ Voltas is hopeful of strong demand during the second summer in October.
▪ The company will enjoy an advantage in the South markets due to its new manufacturing
plant, which will help optimise supply chain and improve Voltas’ presence in the region.
▪ Voltas is focused on scaling Volt-Beko by expanding the product range and distribution
reach. The company intends to follow similar strategies as its RAC business in order to
gain market share in other appliance categories.
▪ Voltas has a presence in 19,000 touchpoints around the country, which provides Volt Beko
with a robust platform to reach consumers.
▪ E-commerce salience for the industry is 5-6%. Voltas enjoys a similar market share in the
online channel as the offline channels. E-commerce contribute 7% for Voltas
▪ Voltas is not focusing on exports opportunity; the company sees lots of growth
opportunities in India. Exports can be long term growth driver but not in the medium
term.
▪ Inventory in Air Coolers is ~40% of last year’s sales, similar to Symphony.
▪ EMPS has continued to struggle as labour constraints, and regulatory challenges have led
to slower execution and slow revenue recognition. Additionally, liquidity constraints have
caused higher provisioning, and hence, the company expects EMPS margins to remain
under pressure.
▪ New order inflow will also be muted owing to lower Capex and government expenditure.
Page | 7
HSIE Consumer Conference: Key Takeaways
Crompton Consumer
Encouraging recovery
Crompton’s recovery has been encouraging and a higher mix of B-C, resulting in a
sustainable recovery. The growth has been broad-based across company’s B-C portfolio. A
stable supply chain has also supported growth as most of the company’s vendors and
channel partners are in good financial health. B-C lighting has seen good recovery with
pricing supporting the margin. B-B lighting (10-12% of total revenue) is seeing slower
recovery. The company continues to focus on distribution strengthening and traction on
new launches. Company will capitalise strong brand recall and distribution by entering
into newer categories.
Key Takeaways:
▪ Crompton’s recovery is better and quicker than expected by management and revenue
returned to pre-COVID level in September. B-C business has seen recovery across
products. B-B lighting (10-12% of revenue) remained weak due to low Capex and
government expenditure. Barring any further disruptions, Crompton is expected to return
to pre-COVID growth once normalcy resumes.
▪ Price hike in B-C lighting is supporting lighting margin, while the company still aims to
achieve high single to low double-digit EBIT margin (mid-single-digit currently).
▪ Fan energy rating change is due in 15-16 months, which will be a big game-changer as it
would require high technology to upgrade. It will impact smaller/regional players a lot.
Crompton will not take any price hike but expect to gain market share.
▪ Management admits that many consumer brands are under-indexed and Crompton will
scale new launches along with entry into newer categories.
▪ Although WFH has not supported growth in premium fans, no downtrading has been
visible.
▪ Agri pumps led the growth while consumer appliances and water heaters saw similar
traction as last year.
▪ Crompton’s channel partners have remained in good financial health as the company’s
initiatives to support them during the lockdown paid dividends. Collections have been
healthy and overdue payments have reduced YoY.
▪ The company has also worked on gaining visibility of secondary sales by collaborating
with its distributors. It has gained visibility on 70% of the distributors so far, and recovery
in secondary sales has mirrored primary in 2QFY21.
▪ Crompton has been working towards reducing its dependence on imports from China.
Three years ago, the company relied entirely on imports for table/pedestal/wall fans. Since
March, the company has commissioned a facility in Goa to produce those fans.
▪ Imports have dropped to 1/3rd of earlier level and will continue to drop further. However,
the company does not expect to be able to eliminate its reliance on Chinese imports for
LED chips, as it does not have any viable alternatives.
▪ Fan is Rs 75bn category; Crompton is a market leader with a 26% share. Unorganised and
regional players combined contribute around 15-18%. Fan industry has witnessed high
single-digit CAGR in the last 3 years.
Page | 8
HSIE Consumer Conference: Key Takeaways
▪ Pump market is divided into the residential pump, agri pump and others. The residential
pump is <Rs 30bn category wherein Crompton has a 26-27% market share. Agri pump is
around Rs 30bn category with several regional players mix (30-40% mix). Crompton has a
7% market share; the brand is relatively new in the agri pump market, and it will take a
few more years to be a critical player in this space. Pump overall has seen mid-high single-
digit volume growth in the last 3 years.
▪ B-C lighting is close to Rs 60bn market, highly competitive category. Crompton has 9%
market share. Top 3-4 players combined contribute 55% market share.
▪ B-B lighting is Rs 120-130bn market size, Crompton has 9% market share. It is less
fragmented market than B-C. Crompton is Number 2 or 3 player in this segment (close to
Havells).
▪ Geyser is Rs 18-19bn market, Crompton is number 4 player with 11% market share. Top 4
players combined contribute 60%. Regional and smaller players contribute 30% share. The
category saw double-digit growth in the last 5 year.
▪ Air Cooler is Rs 20-25bn in size; Symphony is the market leader. Top 3 players combined
contribute 55-60% market share. Crompton has 5-6% market share. The market is shifting
to organised, which is 30-35% in volume. The overall market has had double-digit growth
in the past 5 years.
Page | 9
HSIE Consumer Conference: Key Takeaways
TTK Prestige
Strong recovery visible, all eyes on festive demand
TTK Prestige has witnessed a strong recovery in its revenue in 2QFY21 as WFH and home
cooking have boosted demand for kitchen appliances. The company has clocked recovery
across all its segments in 2QFY21, and certain segments like cleaning solutions have
clocked growth YTD, despite missing out on sales in April. Growth has been led by strong
demand, product innovation, as well as TTK’s presence across online channels. E-commerce
revenue has doubled while GT and PSK have clocked double-digit growth. Additionally,
migration of labour & capital and the ease in restrictions are leading to healthy rural
growth (ahead of urban growth). The company expects this trend to sustain in the near
term. The company expects the recovery to continue in 2HFY21 and demand to be strong in
the upcoming festive season.
Key Takeaways:
▪ Demand for kitchen appliances has witnessed strong growth as a result of WFH. Most
markets are now at a normal level. Recovery is broad-based across products, price
segments and markets. Big distributors like Reliance and Vijay Sales channel are growing
for TTK.
▪ Rural markets have grown faster than urban with the migration of labour and capital and
lower restrictions on the movement of people. The Rural with MFI channel was stuck until
August but is improving now.
▪ TTK’s growth has also been aided by strong product innovation; it launched 50+ products
in 2QFY21. The company also has several new launches in the pipeline for the upcoming
festive season.
▪ Demand is expected to remain strong in the festive season as indicated by the growth
during Onam.
▪ Cleaning solutions has been the best performer for TTK as a higher focus around hygiene
has led to exponential growth in demand. The category has clocked YTD growth despite
missing out on sales in April.
▪ E-commerce has been the most popular channel during the lockdown as consumers
avoided venturing out. The channel saw sales double for TTK in 2QFY21. Additionally,
GT and Prestige Exclusive have also clocked double-digit growth, which has helped
overcome the loss of sales in MT.
▪ TTK has continued to face supply constraints as its vendors are facing severe labour
challenges.
▪ Localised restrictions and sporadic lockdowns have kept labour mobility low, and hence,
vendors have been unable to reach full capacity utilisation.
▪ Additionally, despite TTK achieving 100% capacity utilisation, the company is facing
challenges meeting the demand as it was unable to build up inventory in 1QFY21.
▪ Cooker as a category can still do well, where premiumisation is very much possible.
▪ The company expects Rs 500mn business from the recently launched casserole; if it gets
success, it will enter other table products (culinary)
▪ The total addressable market is Rs 120-130bn in size and growing in low double-digit.
▪ Government is focusing on less use of LPG to avoid import pressure. It will boost to
electrical goods.
▪ The company plans to launch a new rice cooker, which will remove starch from rice (low
carbs).
▪ Company is not only focusing on revenue growth, but profit growth is equally important.
Page | 10
HSIE Consumer Conference: Key Takeaways
Radico Khaitan
Outperformance to the industry continues
Radico Khaitan continued to outperform the industry as revenue returned to the pre-
COVID level in July-August. Growth has been led by North and South regions, where
almost 100% of liquor shops are now open. P&A volumes have shown strong traction as
pubs/bars remaining closed has driven consumers towards hard liquor, and Radico’s
market share in P&A has grown to 8.5% (5% a few years back). Growth has been strongest
in states that took moderate tax hikes on liquor during the lockdown as sharp hikes have
discouraged consumption. The liquor industry has declined by ~10% in 2Q (51% decline in
1Q). Benign raw material prices have also supporting gross margins, along with a
favourable product and state mix for Radico. Gross margin is expected to be in 50-52% in
FY21.
Key Takeaways:
▪ Radico has clocked recovery faster than earlier expected as revenue has returned to pre-
COVID levels for the company in 2QFY21. Recovery has been a result of almost 100%
liquor shops reopening in North and South, although only 80-85% shops have reopened in
East and West.
▪ The liquor industry has declined by ~10% in 2Q (51% decline in 1Q). The industry is
expected to be flat in 3Q, in which situation, Radico will grow on a YoY basis.
▪ Magic Moment (MM) and Morpheus are giving good growth traction. Vodka is a small
market in India, and MM is the market leader (~50% share), so category expansion is
important for the brand.
▪ 8PM Black is expected to reach 1mn mark this year. Tiger Shroff is the brand ambassador.
Lots of digital activities are happing around the brand.
▪ Rampur and Jaisalmer brand continue to see strong demand.
▪ No price hike is taken except in Telengana (10-12%).
▪ Company’s Rampur and Aurangabad plants are operational at 100%
▪ P&A volumes have remained strong in 2QFY21, and the company has not observed any
significant downtrading. Premium brands like 8PM Premium Black, Rampur, Jaisalmer,
1965 have posted strong growth for the company, and its market share in P&A in the
country has grown to 8.5% from 5.6% 3 years ago.
▪ The quick recovery for Radico has been aided by the company’s strategic focus on states
with high liquor consumption and favourable pricing environment. Radico has focused on
states like UP, Karnataka, Telangana, and Himachal, which has provided the company
with a strong platform for market share gains.
▪ Raw material pricing has been benign, and ENA prices have fallen 6-7% from its peak in
December. RM inflation is expected to remain benign owing to a strong monsoon and
lower demand in FY21. Margins have also been supported by favourable product and
state mix as the recovery in P&A has been robust.
▪ The company has also focused on reducing outstanding receivables from AP, which
stands at Rs 1bn currently.
▪ Additionally, the company does not expect states to take sharp tax hikes as they have
discouraged consumption leading to lower revenue for the states.
Page | 11
HSIE Consumer Conference: Key Takeaways
Symphony
Near-term challenges persist
Symphony’s revenue continues to be under pressure as the channel inventory remains
high. Liquidation of this inventory will be a key monitorable for the company in FY21, and
2Q & 3Q performance will remain weak. Over the last 7 years, the company has gained
significant market share from the unorganised sector, and that trend is expected to
continue. Despite increasing competition within air coolers, Symphony has continued to
remain the market leader with 50% of the organised market share. An expanding retailer
footprint and strong e-commerce presence will aid the company’s growth once normalcy
resumes. Cross-selling opportunities via subsidiaries in Australia, USA, Mexico and China
provide Symphony with another growth lever.
Key Takeaways:
▪ Revenue remained under pressure due to high channel inventory. Inventory stood at 40%
of last year’s sales in June. It will continue to impact 2Q and 3Q. Loss of sales during peak
summer has hurt the channel and distributors are wary about stocking up.
▪ Although summer 2020 was weak, the company still expects that air cooler category can
grow at a strong pace.
▪ Symphony has expanded its market share exponentially over the last 7 years. The growth
has been led by expansion in air coolers (double-digit CAGR) and a shift from
unorganised to organised.
▪ The volume split between organised/unorganised is currently 25/75% vs 15/85% 7 years
ago. As the market leader, Symphony is well-positioned to continue to capitalise on this
trend.
▪ Company does not see the entry of a new player as a threat to business; the branded
market is tiny as compared to the unorganised market. Thereby, it is better if more big
players join the air cooler market.
▪ The company has instituted an online-to-offline platform to help reduce the inventory
with its channel partners.
▪ The company is also focusing on maximising on cross-selling opportunities with its
subsidiaries.
▪ Company is confident about achieving healthy traction on industrial and commercial air
cooling in the medium term. Several initiatives have played out over the last 3 years to set
up the infrastructure.
▪ Symphony had seen gross margin pressure in 1QFY21 (45% margin) led by higher sales
spares than air cooler. Management expects 50% gross margins is sustainable in the
business.
▪ The company is focused on reducing discretionary expenditure and securing favourable
deals from OEMs to boost margins.
▪ Additionally, CT is also expected to improve its margin profile over the next few years,
which will support margin expansion for Symphony.
Page | 12
HSIE Consumer Conference: Key Takeaways
Valuation Summary
Companies CMP (Rs) Mkt Cap
(Rs bn) Rating
EPS (Rs) P/E (x)
FY21E FY22E FY23E FY21E FY22E FY23E
HUL 2,099 4,931 REDUCE 35.4 39.4 43.0 59.2 53.3 48.8
ITC 179 2,204 BUY 11.5 13.0 13.9 15.6 13.8 12.9
Nestle 16,087 1,551 REDUCE 230.5 263.3 300.8 69.8 61.1 53.5
Britannia 3,798 914 REDUCE 79.4 84.9 93.1 47.8 44.7 40.8
Dabur 508 898 REDUCE 9.1 10.1 10.8 55.7 50.2 46.8
GCPL 714 730 REDUCE 15.6 17.4 19.6 45.7 41.0 36.4
Marico 363 468 REDUCE 8.4 9.7 10.8 43.3 37.4 33.6
UNSP 544 395 ADD 6.4 12.4 14.7 84.4 43.7 37.1
Colgate 1,373 373 ADD 31.6 36.0 39.9 43.5 38.1 34.4
Jubilant 2,361 312 REDUCE 18.9 36.3 41.8 125.1 65.0 56.5
Emami 370 165 REDUCE 11.6 12.7 13.5 32.0 29.2 27.5
Radico 452 60 ADD 17.7 22.7 26.4 25.5 19.9 17.1
Havells 674 422 ADD 10.2 14.3 17.1 66.0 47.3 39.4
Voltas 680 225 ADD 13.3 20.3 23.1 51.2 33.5 29.4
Crompton 280 176 ADD 6.0 7.5 8.8 46.6 37.4 31.9
V-Guard 173 74 REDUCE 3.9 5.0 5.7 43.8 34.6 30.1
Symphony 910 64 REDUCE 17.3 25.5 30.6 52.7 35.6 29.7
TTK Prestige 6,305 87 ADD 128.5 163.1 187.6 49.1 38.6 33.6
Page | 13
HSIE Consumer Conference: Key Takeaways
Rating Criteria
BUY: >+15% return potential
ADD: +5% to +15% return potential
REDUCE: -10% to +5% return potential
SELL: > 10% Downside return potential
Disclosure:
We, Varun Lohchab, PGDM, Naveen Trivedi, MBA & Aditya Sane, CA authors and the names subscribed to this report, hereby certify that all of the views expressed in
this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of
this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC
Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication
of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest.
Any holding in stock –NO
HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.
Disclaimer:
This report has been prepared by HDFC Securities Ltd and is solely for information of the recipient only. The report must not be used as a singular basis of any investment
decision. The views herein are of a general nature and do not consider the risk appetite or the particular circumstances of an individual investor; readers are requested to
take professional advice before investing. Nothing in this document should be construed as investment advice. Each recipient of this document should make such
investigations as they deem necessary to arrive at an independent evaluation of an investment in securities of the companies referred to in this document (including merits
and risks) and should consult their own advisors to determine merits and risks of such investment. The information and opinions contained herein have been compiled or
arrived at, based upon information obtained in good faith from sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without
notice. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete. HSL is not obliged to update this report for such
changes. HSL has the right to make changes and modifications at any time.
This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen or resident
or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation
or what would subject HSL or its affiliates to any registration or licensing requirement within such jurisdiction.
If this report is inadvertently sent or has reached any person in such country, especially, United States of America, the same should be ignored and brought to the attention
of the sender. This document may not be reproduced, distributed or published in whole or in part, directly or indirectly, for any purposes or in any manner.
Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or price, or
the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk.
It should not be considered to be taken as an offer to sell or a solicitation to buy any security.
This document is not, and should not, be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. This report should not
be construed as an invitation or solicitation to do business with HSL. HSL may from time to time solicit from, or perform broking, or other services for, any company
mentioned in this mail and/or its attachments.
HSL and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the
company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in
the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.
HSL, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any
action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs,
reduction in the dividend or income, etc.
HSL and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the
report, or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this
report.
HSL or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for
any other assignment in the past twelve months.
HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from t date of this
report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other
advisory service in a merger or specific transaction in the normal course of business.
HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the
research report. Accordingly, neither HSL nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our
Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HSL may have issued other reports that are
inconsistent with and reach different conclusion from the information presented in this report.
Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject
company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report.
HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East),
Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Compliance Officer: Binkle R. Oza Email: complianceofficer@hdfcsec.com Phone: (022) 3045 3600
HDFC Securities Limited, SEBI Reg. No.: NSE, BSE, MSEI, MCX: INZ000186937; AMFI Reg. No. ARN: 13549; PFRDA Reg. No. POP: 11092018; IRDA Corporate Agent
License No.: CA0062; SEBI Research Analyst Reg. No.: INH000002475; SEBI Investment Adviser Reg. No.: INA000011538; CIN - U67120MH2000PLC152193
HDFC securities
Institutional Equities
Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park,
Senapati Bapat Marg, Lower Parel, Mumbai - 400 013
Board: +91-22-6171-7330 www.hdfcsec.com
top related