Professional Documents
Culture Documents
SUBMITTED TO:
Dr. Manipadma Datta
PREFACE
TEACHER
PREFACE
ACKNOWLEDGMENT
INTRODUCTION
EXECUTIVE SUMMARY
HISTORY OF HUL, DABUR & MARICO.
BALANCE SHEET OF HUL
BALANCE SHEET OF DABUR
BALANCE SHEET OF MARICO
RATIO ANALYASIS
MEANING OF RATIO ANALYASIS
OBJECTIVE OF RATIO ANALYSIS
CLASSIFICATION OF RATIO
CURRENT RATIO
DEBT EQUTY RATIO
PRICE EARNING RATIO
IMPORTANCE OF RATIO ANALYSIS
PURPOSE OF RATIO ANALYSIS
INVESTOR PERSPECTIVE
OUR RECOMENDATION
CONCLUSION
INTRODUCTION
EXECUTIVE SUMMARY:
Indias consumer market is riding the crest of the countrys economic boom.
Indias fast moving consumer goods (FMCG) sector is the fourth largest sector
in the economy of India with a total market size in excess of US$ 13.1 billion. If
we go by statistics, roughly around 73% of the Indian population lives in the
rural areas- thats a very large market. Many giant players, both foreign as well
as domestic, are competing in the market with a view to capture it. The growing
consumerism in India shows the rapid increase in Indian consumer purchasing
power, it shows strengths and opportunity that lies in rural Indian markets
especially for FMCG products. As a result of it we have opted to undergo
analyzing the financial statements and on basis of it, we shall do a peer to peer
analysis and compare their market position (HUL DABUR & MARICO)in Indian
FMCG Company having excellent distribution channel and deep rural reach in
India
As the major part of the market is yet to be extracted completely, one needs to
evolve a set of strategies and plans to tap the potential Indian consumer
market.
To capture such a great opportunity, only good product and brand awareness
will not be sufficient but proper distribution channel must be present in
holistic approach. Thereby sufficing the need to assimilate the objectives of
these companies as the objective of financial statements would be to provide
information about the financial position, performance and changes in financial
position of an enterprise that is useful to a wide range of users in making
economic decisions. Financial statements should be understandable, relevant,
reliable and comparable as it gives a correlation about reported assets,
liabilities, equity, income and expenses which are directly related to an
organization's financial position.
HULis also one of the country's largest exporters; it has been recognized as a
Golden Super Star Trading House by the Government of India. The mission
that inspires HUL's over 15,000 employees, including over 1,300 managers, is
to "add vitality to life." HUL meetsevery day needs for nutrition, hygiene, and
personal care with brands that help peoplefeel good, look good and get more
out of life. It is a mission HUL shares with its parentcompany, Unilever, which
holds 52.10% of the equity. The rest of the shareholding isdistributed among
360,675 individual shareholders and financial institutions.
HUL's brands
like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,Sunsilk,
Clinic, Pepsodent, Close
up, Lakme, Brooke Bond, Kissan, Knorr
Annapurna,Kwality Wall's are household names across the country and span
many categories
soaps, detergents, personal products, tea, coffee, branded staples, ice cream
and culinary products. These products are manufactured over 40 factories
across India. The operationsinvolve over 2,000 suppliers and associates. HUL's
distribution network comprises about4,000 redistribution stocks, covering 6.3
million retail outlets reaching the entire urban population, and about 250
million rural consumers
DABUR:
Dabur India Limited is the fourth largest FMCG Company in India and has a
turnover of approximately US$ 750 Million (Rs. 3417.1 Crore FY 2010) &
Market Capitalization of over US$ 3.5 Billion (Rs 15500 Crore), with brands
like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. The
company was started by a doctor Dr. S.K. Burman in 1884. The brand name
Dabur is derived from the words Da for Daktar or Doctor and bur from
Burman. From those humble beginnings, the company has grown into Indias
leading manufacturer of consumer healthcare, personal care and food
products. Over its 125 years of existence, the Dabur brand has stood for
goodness through a natural lifestyle. An umbrella name for a variety of
products, ranging from hair care to honey, Dabur is consistently ranked among
Indias top brands. Its brands are built on the foundation of trust that a Dabur
offering will never cause sdanyone slightest of harm. The trust levels that this
brand enjoys are phenomenally high.
In early 1900s, the next generation of Burmans took a conscious decision to
enter the Ayurvedic medicines market and that led to the commercial start of
Dabur. They set up a R&D center which paved way for the growth. In 1940
Dabur diversified into personal care products with the launch of its Dabur
Amla Hair Oil which was a hit with Indian consumers. In 1949 it launched
Dabur Chyawanprash and by 1970 launched Dabur Lal Dant Manjan. Dabur
shifted its base to Delhi in 1972.
Hajmola was launched in 1978 and the candy version came in 1989 (another
brand Swad had created the new market of digestive candies at that time) and
soon became a huge success. In 1996 it entered processed foods market
with Real Fruit Juice. The brand went on to become the biggest success of the
company and in 1997 the Foods division was created, comprising of Real Fruit
Juice and Homemade cooking pastes to form the core of this divisions product
portfolio.
OVERVIEW OF DABUR
SALES STRATEGY
Accenture proposed that Dabur improve its supply chain management, sales
and distribution capabilities and use IT as a strategic enabler for its business
strategy. From an IT perspective, Accenture recommended a two-pronged
MARICO:
Marico is a leading Indian Group in Consumer Products and Services in the
Global Beauty and Wellness space. Maricos Products and Services in Hair
care, Skin Care and Healthy Foods generated a Turnover of about Rs.13.6
billion (about USD 380 Million) during 2006-07. Marico markets well-known
brands such as Parachute, Saffola, Sweekar, Hair & Care, Nihar, Shanti,
Mediker, Revive, Manjal, Kaya, Sundari, Aromatic, Camelia, Fiancee and
HairCode. Maricos brands and their extensions occupy leadership positions
with significant market shares in most categories- Coconut Oil, Hair Oils,
Post Wash Hair Care, Anti-lice Treatment, Premium Refined Edible Oils,
niche Fabric Care etc. Marico is present in the Skin Care Solutions segment
through Kaya Skin Clinics (31 in India and the Middle East), the Sundari
range of Spa skin care products (in the USA & other countries) and its soap
franchise (in India and Bangladesh).
Marico's branded products are also present in Bangladesh, other SAARC
countries, the Middle East and Egypt. The Overseas Sales franchise of
Maricos Consumer Products (whether as exports from India or as local
operations in a foreign country) is one of the largest amongst Indian
Companies and is entirely in branded products and services. Marico was
selected as one of the eight Indian companies in S & P's list of Challenger
Companies from various nations, compiled globally by Standard & Poor's in
June 2007.
Marico has also won various other Awards such as the following:
3 top Awards instituted by CNBC-TV18, U21 Global and Watson Wyatt
Worldwide, in following categories: Indias Employer of Choice for 2007 ,
Award for HR Excellence & Award for Best Employer in the Consumer
Products and Healthcare Sector.
Gold Effie (2007) for its Corporate campaign and a Bronze Effie (2007) for
Saffola.
Kaya - Best Retailer in the Beauty and Fitness category, India retail
Forum (September 2007)
NDTV Profit - Business Leadership Award, FMCG Personal Hygiene
Category (July 2007).
One of India's 10 best marketers (Business Today September 2006).
Brand Leadership Award at the India Brand Summit 2006 (September
2006).
Kaya - Retailer of The Year Award (for the 2nd consecutive Year) at India
Retail Summit 2006.
Opportunity seeking
Consumer Centric
Excellence
Innovation
Global outlook
Boundary lessness
Marico has a set of articulated values that were created at the inception of
the organization, revisited and modified once in the year 1997 and lately in
2003, through the collective wisdom of Mariconians. The values since then
have been an integral part of the working of all Mariconians.
Our values are preferred practices that are employed in pursuit of our
Business Direction. They sum up the philosophy that will build the culture to
drive business growth.
Why Dabur and Marico has chosen as peers for Financial comparison with
HUL
Dabur and Marico has chosen as their sales revenue is very close to HUL
Financial performance
Financial position.
The commonly used tools for financial statement analysis is: Financial Ratio
Analysis
BALANCE SHEET OF HUL:
RATIO ANALYSIS:
Fundamental Analysis has a very broad scope. One aspect looks at the
general (qualitative) factors of a company. The other side considers tangible and
measurable factors (quantitative). This means crunching and analyzing numbers
from the financial statements. If used in conjunction with other methods,
quantitative analysis can produce excellent results.
Ratio analysis isn't just comparing different numbers from the balance
sheet, income statement, and cash flow statement. It's comparing the number
against previous years, other companies, the industry, or even the economy in
general. Ratios look at the relationships between individual values and relate
them to how a company has performed in the past, and might perform in the
future.
MEANING OF RATIO:
A ratio is one figure express in terms of another figure. It is a mathematical
yardstick that measures the relationship two figures, which are related to each
other and mutually interdependent. Ratio is express by dividing one figure by the
other related figure. Thus a ratio is an expression relating one number to another.
It is simply the quotient of two numbers. It can be expressed as a fraction or as a
decimal or as a pure ratio or in absolute figures as so many times. As
accounting ratio is an expression relating two figures or accounts or two sets of
account heads or group contain in the financial statements.
MEANING OF RATIO ANALYSIS:
at the disposal of an analyst but their group of ratio he would prefer depends on
the purpose and the objective of analysis.
While a detailed explanation of ratio analysis is beyond the scope of this
section, we will focus on a technique, which is easy to use. It can provide you
with a valuable investment analysis tool.
This technique is called cross-sectional analysis. Cross-sectional analysis
compares financial ratios of several companies from the same industry. Ratio
analysis can provide valuable information about a company's financial health. A
financial ratio measures a company's performance in a specific area. For
example, you could use a ratio of a company's debt to its equity to measure a
company's leverage. By comparing the leverage ratios of two companies, you can
determine which company uses greater debt in the conduct of its business.
A company whose leverage ratio is higher than a competitor's has more
debt per equity. You can use this information to make a judgment as to which
company is a better investment risk.
However, you must be careful not to place too much importance on one
ratio. You obtain a better indication of the direction in which a company is
moving when several ratios are taken as a group.
OBJECTIVE OF RATIOS
Ratio is work out to analyze the following aspects of business organizationA) Solvency1) Long term
2) Short term
3) Immediate
B) Stability
C) Profitability
D) Operational efficiency
E) Credit standing
F) Structural analysis
G) Effective utilization of resources
Classification of Ratio
Profitabilit
y
Liqudity
Ratio
Leverage
Ratio
Activity
Ratio
Coverage
Ratio
Gross Profit
Rattio
Current ratio
Debt Equity
Ratio
Stock Turn
Over Ratio
Debentures
Service
Coverage
Ratio
Net Profit
Ratio
Liquid Ratio
Profitability
Ratio
Total Assets
Turn Over
Ratio
Interest
Coverage
Ratio
Return on
Capital
Employed
Ratio
Capital
Gearing
Ratio
Debtors
Ratio
Return on
Shareholder
s Fund
Long Term
Funds to
Fixed
Assets
Creditors
Ratio
Return on
Equity Ratio
Book Value
Per Share
Operating
Ratio
Working
Capital Turn
Over Ratio
Expenses
Ratio
Earning Per
Share Ratio
Dividend
Per Ratio
Prise
Earning
Ratio
CURRENT RATIO: Liquidity refers to the ability of a firm to meet its short-term (usually up to 1 year)
obligations. The ratios, which indicate the liquidity of a company, are Current
ratio, Quick/Acid-Test ratio, and Cash ratio. These ratios are discuss
This ratio compares the current assets with the current liabilities. It is also
known as working capital ratio or solvency ratio. It is expressed in the form of
pure ratio.
Formula:
The current assets of a firm represents those assets which can be, in the
ordinary course of business, converted into cash within a short period time,
normally not exceeding one year. The current liabilities defined as liabilities
which are short term maturing obligations to be met, as originally contemplated,
within a year. Current ratio (CR) is the ratio of total current assets (CA) to total
current liabilities (CL). Current assets include cash and bank balances; inventory
of raw materials, semi-finished and finished goods; marketable securities;
debtors (net of provision for bad and doubtful debts); bills receivable; and
prepaid expenses. Current liabilities consist of trade creditors, bills payable,
bank credit, and provision for taxation, dividends payable and outstanding
expenses. This ratio measures the liquidity of the current assets and the ability
of a company to meet its short-term debt obligation.CR measures the ability of
the company to meet its CL, i.e., CA gets converted into cash in the operating
cycle of the firm and provides the funds needed to pay for CL. The higher the
current ratio, the greater the short-term solvency. This compares assets, which
will become liquid within approximately twelve months with liabilities, which will
be due for payment in the same period and is intended to indicate whether there
are sufficient short-term assets to meet the short- term liabilities. Recommended
current ratio is 2: 1. Any ratio below indicates that the entity may face liquidity
problem but also Ratio over 2: 1 as above indicates over trading, that is the entity
is under utilizing its current assets
DEBT EQUTY RATIO
Formula:
DEBT EQUTY RATIO = TOTAL LONG TERM DEBT
OWNERS FUND
Debt equity ratio is also called as leverage ratio. Leverage means the
process of the increasing the equity shareholders return through the use of debt.
Leverage is also known as gearing or trading on equity. Debt equity ratio
shows the margin of safety for long-term creditors & the balance between debt &
equity.
It saws the relationship between the market price of share and earnings per
share .it significance the price that is currently ruling in the market for each
rupee of earnings being made by company per share. As general rule, the higher
this ratio, the better it is for owners. This ratio is widely used by the analysts to
the value of firms performance as exempted by investor . The higher the P/E
ratio, the better is for owners.
Formula:
Sales
25000
20000
Dabur
HUL
HUL.
And
its
competitors
from
2006-2010
Column1
15000
Marico
Column2
10000
5000
0
2006 2007 2008 2009
2010
Net
Profit
2500
2000
HUL.
And
its
competitors
from
2006-2010
Dabur
1500
HUL
Column1
Marico
1000
Column2
500
0
2006
2007
2008
2009
2010
Share
Capital
HUL.
And
its
competitors
from
2005-2009
250
200
Dabur
150
HUL
Column1
Marico
100
Column2
50
0
2006 2007 2008 2009 2008
500
HUL
400
Column1
300
Marico
Column2
200
100
0
2006
2007
2008
2009
2010
RATIOS DESCRIPTION:
HUL:
------------------- in Rs. Cr. -------------------
Mar '11
Mar '10
Face Value
1.00
1.00
6.50
6.50
12.34
12.82
91.18
81.45
11.04
10.70
60.98
60.36
13.53
15.74
12.25
14.59
12.41
14.70
11.75
12.76
11.75
12.76
11.56
12.29
11.56
12.29
102.47
106.78
Profitability Ratios
Return On Capital
Employed(%)
Return On Net Worth(%)
87.57
85.25
80.67
81.40
12.19
11.84
12.20
11.84
102.47
106.78
Current Ratio
0.86
0.84
Quick Ratio
0.43
0.46
--
--
--
--
11,243.63
395.13
--
--
12,163.75
421.50
10,529.33
342.84
7.91
8.99
24.28
29.24
7.91
8.99
5.63
5.35
8.31
7.66
5.63
5.35
61.54
51.08
35.15
32.05
-20.02
-22.62
53.29
50.67
19.20
18.61
19.35
18.35
7.25
7.31
71.20
75.20
64.98
69.40
22.71
21.25
29.99
27.59
--
--
Mar '11
Mar '10
10.68
10.09
Book Value
12.19
11.84
Expenses as Composition of
Total Sales
Cash Flow Indicator Ratios
DABUR:
Mar
'11
Mar '10
Face Value
1.00
1.00
1.15
2.00
3.59
6.34
33.05
4.02
7.14
93.41
87.10
19.06
19.17
17.76
17.97
17.91
18.06
15.58
15.88
15.58
15.88
14.27
15.03
14.27
15.03
61.62
46.29
58.04
45.21
56.29
5.85
8.60
5.85
8.60
68.96
0.99
0.93
Quick Ratio
0.78
0.68
0.23
0.14
0.01
0.02
56.06
52.35
0.23
0.14
50.47
42.53
41.66
36.46
8.65
11.31
19.67
23.62
8.65
11.31
4.39
4.31
2.46
3.44
4.39
4.31
63.26
52.96
29.32
22.08
26.70
3.76
53.15
48.61
0.93
1.22
14.89
16.55
4.09
4.31
46.86
44.32
43.13
49.40
51.67
54.74
55.64
0.49
0.23
Mar
'11
Mar '10
2.71
4.99
Book Value
6.33
8.64
MARICO:
------------------- in Rs. Cr. -------------------
Mar
'11
Mar '10
Face Value
1.00
1.00
0.66
0.66
5.59
5.47
38.20
32.85
12.52
8.03
90.33
91.08
14.62
16.63
13.30
15.26
13.44
15.37
11.75
13.51
11.75
13.51
13.29
11.65
13.29
11.65
34.07
Profitability Ratios
36.11
41.11
28.77
43.26
14.21
9.38
14.21
9.38
48.71
0.99
1.35
Quick Ratio
1.70
1.23
0.63
0.66
0.14
0.16
18.77
21.49
0.63
0.66
12.30
19.04
12.46
15.22
5.98
6.36
21.99
25.73
5.98
6.36
6.18
7.88
1.70
2.20
6.18
7.88
52.83
69.98
32.20
25.89
105.42
89.85
61.29
54.78
5.26
9.96
14.30
16.18
6.58
7.30
14.96
20.01
13.75
18.07
81.23
80.99
83.09
82.75
1.98
1.38
Mar
'11
Mar '10
5.13
3.86
14.21
9.38
Dabur India
Marico
Mar '11
Mar '11
Mar '11
215.95
174.07
61.44
215.95
174.07
61.44
0.00
0.00
0.00
0.00
0.00
0.00
2,417.30
927.09
811.68
0.67
0.00
0.00
2,633.92
1,101.16
873.12
Secured Loans
0.00
17.57
332.42
Unsecured Loans
0.00
235.78
220.07
Total Debt
0.00
253.35
552.49
2,633.92
1,354.51
1,425.61
HUL
Dabur India
Marico
Mar '11
Mar '11
Sources Of Funds
Reserves
Revaluation Reserves
Networth
Total Liabilities
Mar '11
Application Of Funds
Gross Block
3,759.62
766.88
421.20
1,590.46
269.32
198.74
Net Block
2,169.16
497.56
222.46
299.08
11.92
45.52
Investments
1,260.68
519.23
470.36
Inventories
2,811.26
460.58
454.22
Sundry Debtors
943.20
202.46
118.98
281.91
26.08
13.95
4,036.37
689.12
587.15
1,099.72
461.81
369.93
Fixed Deposits
1,358.10
166.33
4.22
6,494.19
1,317.26
961.30
0.00
0.00
0.00
Current Liabilities
6,264.21
539.05
242.07
Provisions
1,324.98
535.36
31.96
7,589.19
1,074.41
274.03
1,095.00
242.85
687.27
0.00
82.95
0.00
2,633.92
1,354.51
1,425.61
Deffered Credit
Miscellaneous Expenses
Total Assets
Inferences Drawn:
100
90
80
70
60
ROA(%)
50
ROE(%)
40
30
20
10
0
HUL 2010 HUL 2009
Marico
2010
Marico
2009
Dabur
2010
Dabur
2009
Mathematically GPM will always be greater than or equal to NPM as there will
some overhead expenses. Practically, overheads are not zero hence GPM >
NPM.
The lower the difference between NPM and GPM, the better. If the difference is
more that signifies the operational efficiency of the company. This difference is
less in case of HUL as compare to other peers considered relatively. Hence we
can comment on good operational efficiency of HUL with respect to Dabur and
Marico.
LIQUIDITY RATIOS:
Liquidity Ratio:
The higher the current ratio, the more capable the company is of paying its
obligations. In case of HUL the ratio is lying between 0.8 to 0 .9 whereas for
Dabur its .9 to 1.2. At the same time for Marico, it is above 1.2. By looking at
Current ratio only we can say Marico has the highest ability to meet short-term
debt obligations.
However, the current assets also include inventory of a company. Generally
inventories are not readily converted into cash hence we need another ratio
that does not includes inventory in current asset to give a more precise picture
of any firms liquidity. That ratio is quick ratio. For HUL the difference between
quick ratio and current ratio is very significant as compare Marico and Dabur
which implies heavy inventory in HUL. The difference is least in Marico and
then Dabur studied for last two years. Hence we have concluded on liquidity
parameter Marico is on top followed by Dabur and then HUL.
Inventory Turnover Ratio:
Keeping more inventory is not a false behaviour(as in case of HUL), one might
argue having enough inventory can guard you against various un-favourable
situation like in-ability to produce the goods due to any factor, excess demand
due to factors like season, natural calamity etc. The excess inventory gives
enough confidence to firm to act in future. However with no doubt this
inventory should be in rotation i.e. inventory turnover ratio should be good. So
that the same amount of goods will present in ware house but it will keep
rotating. The inventory turn ratio of Dabur is quite high comparatively to
Marico and HUL. In-fact Marico has the lowest inventory ratio. Thus analysing
quick ratio and inventory ratio in single frame, Marico has highest quick ratio
but lowest inventory turn ratio implies Marico maintaining high inventories but
its sitting period of good in inventory is more comparison to HUL and Dabur
which are maintaining low inventory but quickly converting it into revenues.
Apart from Inventory turnover ratio, we will be discussing on fixed asset and
Total Asset turnover ratio to comment on operational efficiency.
Fixed Asset Turnover Ratio
A higher fixed-asset turnover ratio shows that the company has been more
effective in using the investment in fixed assets to generate revenues.
Investments made on Plant, Property and Equipments (PPE). The fixed turnover
ratio is decreasing in case of all the three companies. However the decrease in
ratio is due to investments made in PPE by HUL and Marico where as in case of
Dabur it is disinvestment in fixed asset. To analyse fixed turnover ratio, one
must analyse at least four five years of patterns as investment made on PPE
would yield higher production in significant amount of time. As per our scope
of analysis we have concluded Marico is utilizing its fixed assets in the way
resulting addition to sales revenue to maximum followed by HUL and then
Dabur.
P/E Ratio
In general, a high P/E suggests that investors are expecting higher earnings
growth in the future compared to companies with a lower P/E. If market price
of any firms stock is raising and proportionately dividend is not increasing
resulting increase in P/E ratio, yet as an investor I might be interested as in
the hope the currently market price of share is high and increasing over time
being receiver of low dividend (targeting for long term). P/E ratio noticed high
in last year for HUL, implies higher expectation of earning/willingness to pay to
earn per unit of income. The difference in ratio is not much in the three
companies considered to comment on financial health comparison but P/E
directly affected by market situation also.
D/E Ratio
A high debt/equity ratio generally means that a company has been aggressive
in financing its growth with debt. Higher D/E ratio can facilitate company to
use the benefits of debt financing as Debt is not always bad and Debt is always
cheaper then equity. But very high D/E creates serious troubles in decision
making process and affects the flexibility of top management in any firm. On
the contrary low D/E implies a company is not enough using the debt.
Discussing about D/E of HUL it is zero means it is a no debt company. D/E is
quite high in case of Marico and comparatively very less in Dabur. This implies
the risk factor in HUL is very less and financial leverage is least in comparison
of Dabur and Marico. Also in case of Dabur and Marico, the ratio has
decreased in the last two years indicating lowering of risk.
There is an old saying: You cant keep a good man down. That expression
could just as well describe the HUL stock. Note that when the stock dropped to
its new closing low of 220 in Mar 10, all four technical indicators reached
higher bottoms (marked by blue arrows). The positive divergences signaled the
end of the bear period.
The stock embarked on a fresh bull rally within an upward-sloping channel
that is still intact. From Sep 10 through Jan 11, the stock reached three
closing tops each a little higher than the previous one. This time, the
technical indicators all touched lower tops. The negative divergences led to a
sharp drop below the 200 day EMA, followed by a triple-bottom reversal pattern
from Feb to May 11.
Once again, positive divergences from all four technical indicators that touched
higher bottoms, hinted at a resumption of the rally. The stock reached a new
closing high of 343 in Jun 11 at the upper-end of the upward-sloping channel.
Negative divergences in the technical indicators warned of a correction.
There are two points of interest here. The first is that the stocks price
movements provide long-term trading opportunities, as it swings up and down
within the upward-sloping channel. The second, more important one, is that
between Nov 10 and Sep 11 the stock has gone up to touch new highs, and is
in a bull market - even as the Sensex and Nifty are in clear down trends.
All three EMAs are rising and the stock is trading above them a sign of a bull
market. The strategy should be to use dips towards the lower end of the
upward-sloping channel to add. All four technical indicators MACD, ROC, RSI
and slow stochastic are correcting an overbought situation. The correction from
the new closing high of 353 may continue a bit longer.
Bottomline? The stock chart pattern of Hindustan Unilever is in a bull market,
making steady rather than spectacular progress. Growth and margins are back
on the upswing. Valuations are not cheap, but the stock is worth its weight in
gold. Regular dividends are an added attraction.
FOR DABUR:
Dabur India
The stock investing tip to buy stocks of Dabur India for short term time frame
can be considered as an option. The target price could get achieved in one to
two months. Dabur is one of the good FMCG stock as everyone knows. This tip
is purely based on analytical indications.
Dabur India touched its 52 week high recently at Rs 218.95. 52 week low was
at Rs 121. Current EPS is Rs 4.87 and P/E stands at 41.37. Although P/E
ratio looks high, FMCG stocks have always been considered as safe stocks in
stocks markets and so command a higher P/E.
If you look at the 6 months chart, support line is around Rs. 195 which could
be considered as stop loss. The target once again could be near to its 52 week
high i.e. 218. This level provides moderate amount of returns in short term i.e.
1 - 2 months.
MARICO:
Recently, management of Marico Industries, a good FMCG company, talked
about their stock from investor's perspective. They actually guided the
investors with a warning that investors should not be too optimistic about
Marico stock for may be couple of quarters due to various business reasons.
One of the reason they sight for slow growth/no growth is rise of input cost of
raw
material
at
almost
80%.
Another reason is political unrest in Africa and Middle east where company has
been doing business which is almost zero now. And the third reason is in
anticipation of domestic economic slowdown. With ever rising high inflation,
purchasing power of people is bound to be less and people would be willing to
spend less on FMCG products.
Sighting all three reasons, company management wants it's stock investors to
not to expect high growth from company for next may be 2-3 quarters. It is an
appreciable effort from management compared to most of the managements
who keep misguiding small investors with artificial high growth promises!
As a result, stock has corrected more than 10% in a day. It may slip down up
to 120 range where it could be a good stock to buy for long term.
CONCLUSION
As we have given the project work to compare the three well known FMCG
companies i.e. HUL DABUR and MARICO .We came to know about the financial
condition of the three companies relatively good with HUL being in ideal
condition for investment. They are able to generate customer and these
companies are providing new services and products with latest innovation to
customers. At the end I can say that Hindustan Unilever Ltd. Is in good
financial position and marico & dabur can be titled as the market followers and
can promptly become the challengers in near future.
REFERENCES:
1)
2)
3)
4)
5)
[1]. http://www.investopedia.com
[2]. http://www.investorwords.com
[3]. http://www.hul.co.in
[4]. http://www.marico.com
[5]. http://www.dabur.com
6) http://investmentsfordummieslikeme.blogspot.com