Consumer Pulse January 2018 (Budget Edition) Capital_Consumer... · Positive for dairy stocks:...

Consumer Pulse | January 2018

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Consumer Pulse January 2018 (Budget Edition) Monthly Industry Newsletter


2

FY19 Budget – Consumer Sector Key Update

Sector Key Announcements Implication for the sector Impact on Stocks

Dairy

Pashu Sanjivini scheme allocation of INR 500mn

Register & issue health cards to 40 mn milch animals

with UID

Increase milk production by 20% by 2020. Milk

production posted a CAGR of 4% in the last decade and

demand has been rising sharply due to >15% growth in

value-added products

Positive for dairy stocks: Heritage, Parag, Prabhat,

Kwality & Hatsun, as it would ease sharp pricing

pressures due to shortage of high quality milk

Sex-sorted semen technology (1.50mn doses) to

increase availability of high genetic merit heifers to

hike milk production and profitability in dairy

farming

Increase output value of milk by INR 150bn, in line

with government's mission to double farmers’ income

through dairy farming

Positive for all rural centric companies: Hindustan

Unilever, Emami, Dabur, Bajaj Corporation

FMCG

Northeast (NE) Road Sector Development Scheme-

EAP allocated INR 3,342.7mn. Aims to upgrade and

improve 433.7km of road infrastructure in six states in

the NE region

Improved villages and hilly towns road connectivity in

the NE Region will lead to creation of more supply and

distribution centers for consumer companies, especially

foods like dairy, biscuits, snacks which were unable to

service this region due to tough terrain

Positive: Agro Tech Foods, Glaxo Consumer, Britannia,

Dabur, Emami, Hindustan Unilever, ITC

North East Industrial Investment Promotion Scheme

(NEIIP) 2007 as revamped in 2017 with merger of

transport subsidy scheme and freight subsidy scheme

is allocated INR 9,280mn. This will clear outstanding

claims of industrial units set up by March 2017 and

assist 400 newly set up industrial units.

Such initiatives will lead to increased industrial activity

and bolster job creation

Most FMCG companies, which set up new plants

(capex of INR 1.0-3.5bn each) in the NE (Assam) in 2017

as fiscal benefits in terms of excise exemptions, income

tax exemptions, and capital subsidy, among others,

strengthening viability from day one

GST refund allocated at INR 15bn to assist 4,200 units

in the NE region, including Sikkim, J&K, Himachal

Pradesh and Uttarakhand

Increased industrial activity and job creation in these

regions

Positive: all FMCG companies

Basic customs duty increased on refined vegetable

oils – raised to 35% vs. current 20%

Import duty on crude edible vegetable oils raised 30%

vs. current 12.5%

Adverse impact on personal care & food companies Positive for price makers as the hike will be transfered

to the customers

MSP of Kharif crops hiked to 1.5x of cost of produce Spurs disposable income in rural markets leading to

consumption growth

Positive: All FMCG companies

Food Doubling the investment in food processing to INR

14 bn

Promote establishment of specialized agro-processing

financial institutions in this sector

Positive: All Food processing companies


3

FY19 Budget – Consumer Sector Key Update

Sector Key Announcements Implication for the sector Impact on Stocks

Processing Additional allocation of Rs. 500 crore to launch

Operation Greens

Promote Farmer Producers Organizations (FPOs), agri-

logistics & processing facilities to provide basic

vegetables (tomato, onions & potatoes) to consumers all

throughout the year

Positive: Farm producing companies, Food companies

Footwear &

Leather

Special package for employment generation of INR

26bn during 2017-18 to 2019-20

Increase in custom duty on footwear from 10% to 20%

Potential to generate 324,000 jobs in three years and

assist in formalization of 200,000 jobs

Cost increase of imported footwear

Positive for leather and footwear companies: Mirza

International, Relaxo, Liberty Shoes, Bata India Slightly

negative: Mirza International, as it imports sports shoes

from China

Jewellery

Customs duty hiked to 5% on cut & polished

gemstones, diamonds

Increase in cost of imported diamonds Neutral: Titan, PC Jewellers, TBZ as they procure most

diamonds domestically and otherwise pass on higher

cost to consumers

Customs duty on imitation jewellery reduced from

20% to 15%

Increase in competition from imitation jewellery Neutral: Titan, PC Jewellers, TBZ as jewellery firms

cater to a different market segment

Textiles Comprehensive textiles package of INR 71.48bn Boost employment and apparel exports Positive for textiles export companies: Trident,

Welspun, Arvind, Raymond

Market reaction post budget*

Index Agro &

Food Processing

Apparel Breweries

& Distilleries

Building Products

Dairy Durable FMCG Food &

Beverage Footwear

Gems & Jeweller

Hotels & Restaurants

Paints Retail Textiles Nifty 50 S&P BSE

Sensex

Nifty FMCG

% change

▼0.39% ▼4.35% ▼5.27% ▼3.52% ▼4.89% ▼3.37% ▼1.13% ▼2.92% ▼5.12% ▼8.03% ▼5.69% ▼2.53% ▼3.71% ▼5.09% ▼2.33% ▼2.34% ▼0.63%

*Note: The above indices constituents are consistent with the indices mentioned on page 5 of this newsletter, market reaction calculated on the basis of closing price of 1st and 2nd Feb, 2018. Source: Bloomberg, CapIQ


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Slower pace of growth in food prices drove

inflation based on WPI to a 3-month low of

3.58% in December

CPI soared to a 17-month high of 5.21% in

December, due to higher prices of food and

fuel products

In January 2018, monthly index of

consumer sentiments was down 0.74% to

94.89

Monthly index of consumer expectations

was down 0.31% to 93.93

The monthly index of urban consumer

sentiments remained flat at 91.03, as

compared to the previous month

The monthly index of rural consumer

sentiments was down 1.66% to 97.27, as

compared to the previous month

WPI & CPI Inflation

Consumer Sentiments Disposable Income (INR)

2.36%

3.28% 3.28%

3.58%

4.88% 5.21%

1.88%

3.24%

2.60%

3.59% 3.93%

3.58%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

CPI WPI

95.60

94.89

94.22 93.93

92.5

93.0

93.5

94.0

94.5

95.0

95.5

96.0

96.5

97.0

1-J

an

-18

4-J

an

-18

7-J

an

-18

10

-Ja

n-1

8

13

-Ja

n-1

8

16

-Ja

n-1

8

19

-Ja

n-1

8

22

-Ja

n-1

8

25

-Ja

n-1

8

28

-Ja

n-1

8

31

-Ja

n-1

8

Consumer Sentiments Consumer Expectations

1,14,927

1,27,029

1,39,353

1,53,795

0

20,000

40,000

60,000

80,000

1,00,000

1,20,000

1,40,000

1,60,000

1,80,000

1-Jan-14 1-Jan-15 1-Jan-16 1-Jan-17


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Returns of consumer indices vis-à-vis Sensex returns for the month* Returns*

Index 1M 3M YTD 12M

Agro & Food Processing -9% 10% -9% 159%

Apparels -4% 7% -4% 43%

Breweries & Distilleries 4% 25% 4% 93%

Building Products -8% 8% -8% 37%

Dairy -2% 15% -2% 37%

Dureables -3% 17% -3% 72%

FMCG -1% 2% -1% 23%

Food & Beverage -6% 12% -6% 42%

Footwear -11% -10% -11% 42%

Gems & Jeweller 0% 27% 0% 113%

Hotels & Restaurants 11% 28% 11% 72%

Paints -5% -3% -5% 26%

Retail -4% -1% -4% 75%

Textiles -11% -10% -11% -9%

Nifty 50 Index 6% 6% 6% 27%

S&P BSE Sensex Index 6% 7% 6% 28%

Nifty FMCG 2% 4% 2% 21%

* AGRO & FOOD PROCESSING - KRBL, Avanti Feeds, Venky'S (India), LT Foods, DFM Foods, ADF Foods, Apex Foods * APPARELS - Page Industries, Raymond, Kitex Garments, Monte Carlo Fashions, SP Apparels, Ashapura Intimates Fashion, Indian Terrain Fashions, Nandan Denim, Rupa & Company, Lux Industries, Lovable Lingerie, Dollar

Industries * BREWERIES & DISTILLERIES - United Spirits, United Breweries, Radico Khaitan, GM Breweries * BUILDING PRODUCTS - Kajaria Ceramics, Greenply Industries, Somany Ceramics, Greenlam Industries, Cera Sanitaryware, Sheela Foam, HSIL, Shankara Building Products, Pokarna * DAIRY - Hatsun Agro Products, Kwality, Parag Milk Foods, Prabhat Dairy, Umang Dairies, Heritage Foods * DURABLES - Titan co, Havells India, Whirlpool of India, V-Guard Industries, TTK Prestige, Blue Star, Bajaj Electricals, LA Opala RG, IFB Industries, V.I.P. Industries, Hawkins Cooker, Butterfly Gandhimathi Applia, Symphony,

Surya Roshni, LEEL Electricals, Crompton Greaves Consumer EL * FMCG - ITC, Zydus Wellness, Hindustan Unilever, Godrej Consumer Products, Dabur India, Marico, Colgate Palmolive (India), Procter & Gamble Hygiene, Emami, Gillette India, Godfrey Phillips India, Jyothy Laboratories, Bajaj

Corp, VST Industries * FOOD & BEVERAGE - Nestle India, Britannia Industries, Glaxosmithkline Consumer Healthcare, Manpasand Beverages, Tasty Bite Eatables, Agro Tech Foods, Tata Global Beverages, CCL Products (India), Tata Coffee, McLeod

Russel India, Goodricke Group, Vadilal Industries, Jayshree Tea & Industries * FOOTWEAR - Bata India, Relaxo Footwears, Mirza International, Liberty Shoes * GEMS & JEWELER - Rajesh Exports, PC Jeweller, Vaibhav Global, Gitanjali Gems, Renaissance Jewellery, Thanga Mayil Jewellery, Tribhovandas Bhimji Zaveri * HOTELS & RESTAURANTS - Indian Hotels Co, EIH, Hotel Leelaventure, Jubilant Foodworks, Coffee Day Enterprises, Westlife Development, Speciality Restaurants

* PAINTS - Asian Paints, Berger Paints India, Kansai Nerolac Paints, Akzo Nobel India * RETAIL - Avenue Supermarts, Arvind, Future Retail, Aditya Birla Fashion and Ret, Trent, Future Lifestyle Fashions Lt, Shoppers Stop, Vmart Retail, Kewal Kiran Clothing, Future Enterprises, Zodiac Clothing Company * TEXTILES – Trident, Indo Count, Welspun, Himatsiengka

85%

90%

95%

100%

105%

110%

115%

120%

125%

01-Jan-18 07-Jan-18 13-Jan-18 19-Jan-18 25-Jan-18 31-Jan-18

Agro & Food Processing (-9%) Apparels (-4%) Breweries & Distilleries (4%)

Building Products (-8%) Dairy (-2%) Dureables (-3%)

FMCG (-1%) Food & Beverage (-6%) Footwear (-11%)

Gems & Jeweller (0%) Hotels & Restaurants (11%) Paints (-5%)

Retail (-4%) Textiles (-11%)

*Note: 1M – Jan-1st – 31st 2018; 3M – Nov 1st – Jan 31st; 6M – Aug 1st – Jan 31st; 12M Feb 1st, 2017 – Jan 31st, 2018 Source: Bloomberg, CapIQ


6

Deals

Rubberwala Housing and Infrastructure acquires Raj Oil Mills Rubberwala Housing and Infrastructure acquires Raj Oil Mills for a total consideration of

USD 11.75 mn. The proceeds will be used to repay its debts. Mumbai based Rubberwala

Housing and Infrastructure is a real estate development company. Mumbai based Raj Oil

Mills manufactures and markets edible oils under brands such as Cocoraj Coconut Oil, Cocoraj

Cool Ayurvedic Oil and Guinea Groundnut Oil.

Southern Health Foods raises USD 23.97 mn from Morgan Stanley Private Equity Southern Health Foods raises USD 23.97 mn from Morgan Stanley Private Equity Asia for an

undisclosed stake. The proceeds will be used to expand in South India. Chennai based

Southern Health Foods is engaged in manufacturing processed foods such as health products,

flour, cereal & dry fruits under the brand name Manna Foods.

GoodVitamin Foods raises an angel round of funding GoodVitamin Foods raises an angel round of funding from a group of individuals for an

undisclosed stake. The proceeds will be used for product development, marketing &

geographical expansion. Gurgaon based GoodVitamin Foods is a manufacturer of ayurvedic

food products under the brand name Kiva.

DAAKI raises angel funding DAAKI raises angel funding from Rohan Ajila, Managing Partner at Capvent India Advisors

for an undisclosed stake. The proceeds will be used in research and product development to

provide athlete nutrition beyond existing standards. Bengaluru based DAAKI is engaged in

designing, manufacturing, and marketing of sports nutrition products.

Nysaa Retail raises USD 6.5 mn from Carpediem Advisors Nysaa Retail raises USD 6.5 mn funding from Carpediem Advisors for a minority stake. The

proceeds will be used to expand its outlets and warehouse and for technological upgradation,

particularly for CRM and allocation tools. Gurgaon based Nysaa Retail is engaged in

providing the service of apparel retail under the brand name 1-India Family Mart.

Go Fashion India raises USD 15.64 mn from ICICI Venture Funds Go Fashion India raises USD 15.64 mn from ICICI Venture Funds for a 13.8%% stake. The

proceeds will be used to capture market share by ramping up store expansion. Chennai based

Go Fashion India owns and operates retail stores and an online portal “gocolours.co.in” that

sell variety of women bottome wears.

New Horizons Opportunities invests USD 6.26 mn in Fiberweb India New Horizons Opportunities Master Fund invests USD 6.26 mn in Fiberweb India for a

13.44% stake. Mumbai based Fiberweb India is a textile manufacturer and exporter offering

spun bond nonwoven roll goods used in hygiene industry, agriculture crop cover, medical &

industrial clothing.

Global Gourmet raises USD 10 mn from India Agri Business Fund Global Gourmet raises USD 10 mn from India Agri Business Fund (Rabo Private Equity) for a

minority stake. The proceeds will be used to grow its presence into value-added shrimps and

other protein-based products and to further its presence both in India and globally. Vadodara

based Global Gourmet is engaged in manufacturing of packaged foods under the brand of

Ammas Kitchen, Bombay Bites, Farm Fresh, Garvi Gujarat & Masala Craft. Its products include flat

breads, snacks, curries and entrees, regional delicacies & individually quick-frozen

vegetables.

Transaction Target Buyer Industry

Deal Value (USD mn)

Percentage Sought (%)

M&A Raj Oil Mills Rubberwala Housing and Infrastructure Food & Beverage (F&B) 11.75 100%

PE Southern Health Foods Morgan Stanley Private Equity Asia Food & Beverage (F&B) 23.97 N.A.

Angel/Seed GoodVitamin Foods Individuals Food & Beverage (F&B) N.A. N.A.

Angel/Seed DAAKI Individual Food & Beverage (F&B) N.A. N.A.

VC Nysaa Retail Carpediem Advisors Retail 6.5 N.A.

VC Go Fashion India ICICI Venture Funds Management Company Retail 15.64 13.80%

PIPE Fiberweb India New Horizons Opportunities Garments & Textiles 6.26 13.44%

PE Global Gourmet India Agri Business Fund Food & Beverage (F&B) 10 N.A.


7

Industry Picks

Rural economy, monsoons to boost FMCG companies in 2018 According to a consumer sector report by a leading brokerage house, consumer goods

companies expects to see a revival, both in volume and margin terms in the next 12 months,

with an anticipated revival in the rural sector. With the current populist budget, the rural

sector is anticipated to be prime beneficiary. This, coupled with improving macros and good

monsoon after two consecutive droughts, also augur well.

After four quarters of muted growth, the consumer goods sector is likely to clock high single

to low double-digit volume growth in the October-December quarter of 2017. The sector

revenue growth will revive from the second half of the current financial year. With GST pangs

largely behind, volumes of most companies to clock high single to low double-digit growth.

Prices of raw materials like copra, monomers and menthol, among others, have remained

elevated. Prices of other raw materials like sugar, wheat flour and milk have remained flat to

slightly declining. To offset rising raw material cost, companies have not been able to take

required price hikes, resulting in some gross margin compression. With cost rationalisation,

calibrated EBITDA margin expansion can be expected going forward.

Nearly 52 new beer brands and their variants were introduced in 2017 A new beer brand had hit the India market every week in 2017, despite various challenges in

the previous year such as sales bans, shrinking store networks, and stagnant demand. The

Indian beer market, which is currently pegged INR 460 bn, is expected to reach INR 610 bn by

2020. The largest category is strong beer with current market size c.a. INR 380 bn, followed by

Mild (INR 70 bn) & Craft Beer (INR 10 bn) – these categories are expected to reach INR 480 bn,

INR 90 bn & INR 40 bn for strong, mild and craft respectively.

The top 3 beverages categories in India are soft drinks (INR 540 bn) followed by beer (INR 460

bn) & dairy (INR 300 bn). Promising demographics and increasing affluence have been one of

the key drivers for the growth of beer brands in the country.

As many as 52 new beer brands and their variants were introduced last calendar year, more

than double in 2016 (25 brands introduced), according to data available with The Beer Café.

While the top brewers — Heineken-controlled United Breweries and Carlsberg — introduced

half a dozen new brands, several domestic and imported draft beer brands were introduced,

mostly at pubs and restaurants, to ride on the surge of micro-breweries that rose to more than

80 compared to half a dozen 5 years ago. There are about 142 beer brands in India (2017) –

imported bottled cagtegory has 77 brands, followed by domestic bottled (27 brands), draught

domestic (20 brands) & draught imported (18 brands).

There is a major shift in affection from established products to craft which are more inventive

in nature. Consumers worldwide have taken keen interest in exploring bolder flavours of beer.

Indian diamond manufacturers look to set up cutting, polishing units in Russia India's diamond manufacturers are looking at setting up cutting and polishing units in Russia

for easy access of rough diamonds from Alrosa mines as the central government has yet to

come up with a tax structure to enable the country's diamond trade to directly purchase rough

diamonds from the special notified zone (SNZ) at Mumbai's Bharat Diamond Bourse. KGK

Diamonds has announced setting up of cutting and polishing unit in Vladivostok in Russia –

they will be investing 2.8 bn Russian rubles in the Vladivostok unit. The annual installed

manufacturing capacity of the unit is 150,000 carats of diamonds. Two more other leading

diamond companies including M Suresh & Co are looking at opening units in Russia.

At present, diamond manufacturers can view the diamonds from miners such as Rio Tinto, De

Beers, Alrosa and others at the SNZ and bid but they cannot procure it locally. They have to

buy diamonds from Belgium, Dubai, Singapore and Russia despite successful bidding at the

SNZ. Buying rough diamonds on the spot would bring down the transaction cost.

Russian president Vladimir Putin is inviting diamond trade across the globe to set up units in

his country. India, being the leader in cutting and polishing of diamonds, will find it easier to

procure raw material and cut down transaction cost if it starts operating in Russia.

News Pick

Whirlpool India to foray into commercial appliances Whirlpool India is foraying into the commercial appliance segment by launching products

from its European portfolio including dishwashers, ovens and ice makers. The company is

presently targeting 5% market share in the commercial appliance industry. The launch of the

new product range is part of company's aggressive growth plans in order to expand its

presence in new adjacent product categories. Currently, the B2B market size of kitchen

equipment in India is INR 19 bn and laundry equipment is INR 50 bn with growth rate of 10-

12%.

Royal Philips crosses the billion-dollar sales mark in India Dutch healthcare, consumer and lighting products maker Royal Philips crossed the billion-

dollar sales mark in India in FY17 after more than eight decades of setting up operations in the

country. Philips' total sales in the Indian market grew by 11.8% in the fiscal year ended

March-17, despite intense competition in the LED lamp and luminaire segment from Chinese

and local brands and demonetisation impacting sentiments. Philips had demerged the lighting

business last fiscal into a separate entity, Philips Lighting India, as part of a global

restructuring process and Philips India is continuing with the consumer products and

healthcare businesses.

Louis Vuitton India Retail profit jumps 50% in FY17 LVMH Moet Hennessy Louis Vuitton, the world's premier luxury goods company, posted an

over 50% jump in profit in its retail store business in India in FY17, overcoming

demonetisation and a clampdown on black money, which were expected to dampen sentiment


8

in the sector. LVMH, which sells luxury handbags, fashion and other leather goods and

perfumes and cosmetics, reported a profit after tax of over INR 80 mn compared with INR 50

mn in the previous year for Louis Vuitton India Retail.

Malabar Gold to enhance retail presence Malabar Gold and Diamonds is expanding its global footprint by adding another 11 new

showrooms across 6 countries. The opening of new showrooms takes the total retail network

of the company to 208. The rapid expansion of showrooms across geographies is part of the

group's strategy to swiftly expand its global footprint. As part of its global expansion plans,

Malabar Gold will be opening another 50 showrooms this year in different formats in various

countries such as the US, Sri Lanka, Brunei & Bangladesh.

Danone to exit dairy business in India French foods maker Danone is exiting its dairy portfolio in India, seven years after it entered

the category. The market is dominated by Gujarat Cooperative Milk Marketing Federation

(GCMMF) - owned Amul and Mother Dairy, besides Nestle and Britannia. Danone's fresh dairy

portfolio in India included dahi, mishti dahi and flavoured yoghurts & the ultra-high

temperature processing (UHT) portfolio. Danone has decided to rationalise its product

portfolio in India to allow for accelerated investments and a sharper focus on growing its

nutrition portfolio which is more than 90% of the business, and where the company already

enjoys leadership position.

Lotte Confectionery seeks 5% of its global revenues from India After making India its global hub for Lotte Choco Pie, South Korean company Lotte

Confectionery Co hopes for India to contribute 5% to its global revenues from current 2% by

the end of this decade following acquisition of Havmor Ice Cream and introduction of India-

specific products for the mass market. While a new plant could be in the offing after two years,

Lotte would take the Havmor outlet numbers to 500 by 2021 from current 200. Lotte would

eventually introduce its sorbets from South Korean and Japanese markets to the Indian

consumer, and by 2025 the company aims to have 15-20% market share in the organised ice

cream market, currently pegged at INR 50 bn. Havmor currently has 10% market share.

Micromax forays into air cooler segment Consumer electronics maker Micromax announced its foray into the air cooler category with

products priced between INR 5,990 and 16,990. The company will have a full-fledged range of

room air coolers including personal, tower, desert & window. With its foray into the room air

cooler segment, Micromax is all set to reinforce its consumer electronics portfolio and will be

foraying into other categories as well in 2018. The range of coolers will be available at leading

counters across markets from February.

Mondelez bets on India to taste USD 1 bn online sales by 2020 Striving for USD 1 bn in online sales by 2020, Mondelez believes its Indian business will be

crucial for building its global ecommerce sales. Until now, the company has been selling its

products online through marketplaces such as Big Basket and Amazon. Since last year, it has

deepened its relationship with customers by having product customisation and promotions,

exclusive to online. The company also expects additional revenues to come from newer

platforms — it launched its own portal in India, marking its entry into the ecommerce

business, especially to cash in on the premium gifting market.

Patanjali goes online, aims over INR 10 bn sales in 2018 Patanjali Ayurved forayed into e-commerce for its FMCG items, partnering major players in

the space, including Amazon and Flipkart, and targeting over INR 10 bn this year itself. The

company has partnered 8 players including Grofers, Shopclues, BigBasket, 1mg, Paytm Mall &

Netmeds, through which its entire range of products would be available online. Besides,

Patanjali is also expanding its retail network in brick and mortar format and has plans to

introduce more products in the value based small offering targeting rural customers. The

company will expand into new product segments such as bottled water through brand 'Divya

Jal' & apparels and footwear under the brand name 'Paridhan' this year.

Eveready’s first step into FMCG, forays into confectionery business with 'Jollies' Eveready Industries India (EIIL) has entered the INR 90 bn plus confectionery market through

its brand 'Jollies', which will be launched in the INR 4 bn fruit chew segment during the first

phase. It will be priced at INR 1. Eveready will look to leverage its deep distribution network

across urban and rural India even as it follows an asset light model and aims at quick

profitability with entry into this segment. This is the company's first step to scale up its FMCG

portfolio. The company is working on an asset-light model involving outsourcing, and

believes it can add significant turnover and profitability with an entry into the segment.

Britannia enters the chocolate space, to compete with Nestle's Kit Kat Biscuit maker Britannia has entered the chocolate space, extending its Pure Magic biscuit brand

to a format of slabs of chocolate on top of biscuits. This marks the company’s first time entry in

the real chocolate space and it will retail the product accordingly, with the focus on modern

retail and e-commerce. The product was launched in Bengaluru and is now being taken to

pan-India level.

Kamdhenu joins hands with Graphenstone to introduce eco-friendly paints in India Kamdhenu has joined hands with Spanish paint maker Graphenstone to bring safe eco-

friendly paints to India by obtaining exclusive rights to import and market the products. The

move is aimed at tapping the growing demand for high-quality, green paints in the country as

a result of increasing consciousness among consumers for the environment. The Kamdhenu-

Graphenstone range of paint products are non-toxic, free of volatile organic compounds

(VOC) emissions, have no odor and can be tinted to any color with non-toxic tints. They are

produced from fewer than 250 chemical components and more than 98% of these chemicals

are derived from plant sources & minerals.


9

Patanjali plans to overtake HUL by next year; not weighing IPO Ayurvedic products maker Patanjali Ayurved plans to overtake the country's biggest

consumer goods company, Hindustan Unilever (HUL) by next year. Patanjali's FY17 sales

amounted to c.a. INR 106 bn, a third that of the listed HUL, which reported sales of IN 345 bn.

While Patanjali has expanded the ayurveda category and is talking of adding many new

segments to its portfolio, which will help it grow incrementally, HUL has created its business

over decades across branded FMCG. HUL has also been adding muscle to its own ayurveda

range of products to compete with Patanjali. Currently, Patanjali is not considering a

listing, and does want to come under pressure of declaring its financials quarterly.

Adani Group to invest INR 7.5 bn in edible oil refinery Adani Group plans to invest INR 7.5 bn to double the capacity of its edible oil refinery at

Haldia in West Bengal. The group is also keen to invest in port, agri and power sectors, given

the chance to do so. While the refinery capacity is 1,600 tonne per day at present, the fresh

investment to double its capacity will be spread over five years. The capacity of the packaging

unit would also be expanded from 1,200 tonne to 1,800 tonne at the refinery.

Jubilant FoodWorks same store sales up 17.8% Indicating revival in the eating out sector, Jubilant FoodWorks, operator of Domino's Pizza and

Dunkin Donuts reported 17.8% increase in same store growth (SSG) for the third quarter ended

Dec-17. Sales for the quarter at INR 7.95 bn, were up 20.7% over the year-ago quarter. The

company attributed the growth to every day value deals, online ordering which contribute up

to 60% of delivery revenue. Dunkin' Donuts losses continue to reduce with sharper focus on

donuts and beverages and closure of unprofitable stores.

HUL’s Q3 sales surge on demand pickup HUL reported its fastest sales volume growth in six years in the Dec-17 quarter, pointing to a

gradual revival of demand in Asia's third-biggest economy that witnessed major structural

reforms since late 2016. HUL saw net sales rise by 17% and volume grow by 11%. The

company saw average volume growth in the market between 2013 and 2016 of about 3%, with

rural markets growing at a faster clip than urban center. It expects that it would take few more

quarters to see market shares shifting to branded products from unorganized sector

Baidyanath forays into FMCG segment Kolkata-based Ayurvedic firm Baidyanath has forayed into the FMCG segment by launching a

range of natural juices in the market, and has plans to introduce oral healthcare, personal

hygiene & skin care products soon. The company, which has completed its 100 years in 2017,

is eyeing to catch up the growing consumer shift towards natural, organic & ayurvedic

products as well as to cater to growing youth preferences. Seeing the shift in consumer

preferences and growing shift of youth towards natural organic and ayurvedic products, the

company has decided to foray into FMCG market with health benefit products.

Grasim Industries gets approval for INR 25.6 bn expansion project Grasim Industries received green nod for expanding the production of man-made fibre VSF

(Viscose Staple Fibre) at Bharuch, Gujarat that would entail an investment of INR 25.6 bn. The

company has 4 VSF plants in India, of which 2 are in Gujarat, 2 each in Kharach and Vilayat in

Bharuch district. As per the proposal, the company's Grasim Cellulosic Division wants to

expand its Vilayat plant. The company's proposal is to increase the production capacity of VSF

from 1,27,750 tonnes per annum (TPA) to 2,55,500 TPA. It also wants to set up a production

facility of Solvent Spun Cellulosic Fibre with a capacity of 36,500 TPA. The proposed

expansion in VSF production capacity will cater to the increased demand for man-made fibres

in the country.

VLCC forays into men's grooming; eyes INR 1 bn in three years VLCC has entered the men's grooming segment with the launch of 'Ayush Men' and is eyeing

INR 1 bn revenue in three years from the category. The current range, which includes face

wash, face scrub, shaving gel & moisturizer, is available in retail stores across India. The

company aims to tap 10% market share of the men's grooming category in three years. With

men paying more attention to their appearance and skin than ever before, the market for men's

grooming in India is expected to touch INR 101bn by 2020.

Carlsberg sets up new brewery in Mysuru Carlsberg India, the India arm of global beer giant Carlsberg, has established its new brewery

at Mysuru, Karnataka. While Carlsberg India's popular brands, Carlsberg and Tuborg have

already been available in Karnataka, the establishment of the new brewery is an aspirational

step to further strengthen Carlsberg India's growth opportunity in the state. This is also

Carlsberg's 8th brewery in India. It is spread over around 27.1 acres of land in Nanjangud taluk

in Mysuru district. With an annual production capacity of 80 mn litres, the brewery would

manufacture all brands in Carlsberg India's existing product portfolio.

Daikin India eyes USD 1 bn turnover in two years Air conditioner maker Daikin India is aiming to be a USD 1 bn brand in India in next two

years, led by high double-digit growth in domestic markets, addition of new products and

increase in exports. Besides, Daikin is planning to set up another plant in South India in the

next four years to catch up with the growing AC market. It will invest around INR 6 bn in the

plant. The company is aiming to be a billion-dollar company by 2020. The company aims to

sell more than 1 mn units of ACs in 2019 and become a leader in the Indian HVAC (heating,

ventilation, and air conditioning) segment.

Nestle SA forays into pet care market in India Swiss FMCG major Nestle announced its foray into pet care segment in India by launching

premium dog food through its step-down firm Nestle Purina. The company has launched

Purina Supercoat range of dog food, which offers a wholesome combination of high quality

natural ingredients. Pet owners are becoming increasingly aware and focusing on providing

best nutrition to their pets and this has fuelled the demand for high quality specialised pet


10

food. According to the company, India has an estimated 19 mn pets and the pet food industry

in India has huge potential and is expected to double in size in the next five years.

Samar Lifestyle to make, sell Florsheim shoes in India American footwear firm Weyco Group has signed a licensing deal with Samar Lifestyle to

exclusively make and sell its Florsheim brand of shoes in India and some neighbouring markets

such as Pakistan and Bangladesh. Samar Lifestyle, part of Bengaluru-based Sara Group, plans

to open at least 25 flagship Florsheim stores in the next five years. Florsheim will have a

premium positioning with an average pricing of INR 7,500 a pair.

New launches in ayurvedic segment help Colgate deliver double-digit volume growth Colgate-Palmolive saw sales volume growing in double-digits in India, helped by a lower base

that had a demonetisation-induced dip and new launches in the ayurvedic segment. Within

natural or ayurvedic space, Colgate has about 35% share with brands such as Colgate Active

Salt range and Colgate Herbal. With 25% of India's toothpaste market being herbal, Colgate is

on a strong footing with a changing toothpaste portfolio. Although the company's market

share in this sub-segment is low compared to its overall 54% market share, this is still

reasonable and can be expanded further with the rollout of new products.

Amway India enters kids oral care segment Direct selling FMCG firm Amway India has forayed into kid's oral care segment with the

launch of Glister Kids toothpaste. The company is targeting to capture a sizeable pie of the fast

growing kids oral care market in India which is pegged at INR 2.9 bn, growing at a CAGR of

19% over last 5 years from 2011 to 2016. Glister Kids toothpaste has been specially formulated

for children aged 2 years and above and is an anti-cavity sugar free toothpaste in gel format.

Bajaj Corp expects wholesale channel to pick up in Q4 Bajaj Corp expects wholesale channel to gather momentum in Q4FY18 and input cost inflation

to continue. The company plans to tap whitespace opportunities by enhancing its innovative

pipeline. It also plans to focus on enhancing direct distribiution in rurual areas. Going

forward, the company would also improve sales mix further to get profitable volume driven

growths. Q3FY18 delivered an overall growth of 5.9%. The company has a network of 9,321

distributors and 20,328 wholesalers.

PepsiCo to divest distribution of juice portfolio to Ravi Jaipuria PepsiCo is transferring distribution of its juices portfolio to its biggest bottler in South Asia,

Ravi Jaipuria-promoted RJ Corp. This deal is believed to be a precursor to the beverages and

snacks maker divesting its capital-intensive business nationally to franchisees. RJ Corp

currently manages the entire North and East bottling of aerated drinks for PepsiCo in India

and is the American company's second-biggest bottler globally. It operates the bottling

business through a listed entity – Varun Beverages. While PepsiCo had sold the India bottling

operations of its fizzy drinks in the two regions to Jaipuria three years ago, the company had

kept the distribution of juices entirely with itself.

Parag Milk expects dip in revenue growth over next 3 years Parag Milk Foods is expecting a dip in revenue growth to up to 15% per annum over the next

three years. The company's revenue grew by 17% in the last three years to reach INR 17.3 bn in

FY17. The company is India's largest private dairy with a milk processing capacity of 2 mn

litres per day. The future growth will come mainly from traditional products like liquid milk,

ghee, paneer & curd, which are expected to grow by 15%, while modern products like UHT

milk, flavoured milk, cheese & whey powder may grow by 26% by 2020

Juice brand Paper Boat loses steam, sales down 12.5% Ethnic drinks brand Paper Boat seems to be slowing down finally after sailing high for almost 7

years, as health-conscious consumers cut back on sugary products in a slowing economy.

Hector Beverages, maker of Paper Boat, posted a tepid 12.5% growth in sales in the year ended

Mar-17 after doubling its sales in the previous year. Hector Beverages reported sales of INR

690 mn and net loss of INR 780 mn for FY17. Backed by multiple investors such as Sequoia

Capital and China's Hillhouse Capital, Hector Beverages has so far raised nearly INR 3bn.

CybizCorp, Bharti Family Office, TGI Fridays looking to introduce new brands or expand Over two years after it brought in US based burger chain Carl's Jr., CybizCorp is actively

negotiating with a global pizza brand and working on a domestic beverage bar chain, both

scheduled to debut in India in the first quarter of FY19. So are about half a dozen big names

including Bharti Family Office, Zorawar Kalra-promoted Massive Restaurants and TGI

Fridays, which are expanding beyond their core brands as they adapt to a new tax regime and

changing market dynamics. Bharti Family Office's Gourmet Investments, which brought the

UK brand PizzaExpress to India six years ago, is introducing its first domestic seafood brand

Typhoon Shelter, besides Sri Lankan chain Ministry of Crab.

Konica Minolta aims INR 10 bn revenue by 2022 Japanese printing technology major Konica Minolta Business Solutions is betting on its

professional production printing division to achieve its vision of INR 10 bn revenue by 2022.

Started in the year 2010, the company achieved its first milestone of earning INR 5 bn in 2016

and is now aiming at the next milestone as it plans to beef up its professional production

printing business and diversify into providing IT solutions. The company has expanded its

reach to 24 locations in India and is also eager to invest in capacity expansion "based on

market requirements"


11

Market Multiple (as on Feb 15th, 2018) Source: Bloomberg, CapIQ

Consumer Scorecard

Company Name

Stock Price

Market Capitalization

Net Revenues

EBITDA Margin

Net Income Margin EV/Revenues (x) EV/EBITDA (x) P/E (x) ROE ROCE

(INR) (INR mn) (INR mn) (%) (%) TTM FY18E FY19E TTM FY18E FY19E TTM FY18E FY19E LTM LTM

Agro & Food Processing

KRBL 637.5 150,049 32,832 22.8% 13.7% 4.64x 4.65x 4.35x 20.36x 18.84x 16.51x 33.46x 31.84x 27.45x 23.8% 17.8%

Godrej Agrovet 589.0 113,511 50,198 8.9% 5.2% 2.48x 2.40x 2.13x 27.85x 26.82x 22.00x 43.89x 47.12x 36.41x N.A. N.A.

Avanti Feeds 2,411.6 109,523 33,472 20.5% 13.4% 3.10x 3.19x 2.60x 15.10x 22.31x 17.81x 24.45x 36.90x 29.11x 65.5% 51.5%

Venky's (India) 2,832.3 39,899 25,639 14.7% 7.4% 1.66x 1.62x 1.50x 11.26x 12.18x 11.05x 20.98x 24.84x 21.16x 36.2% 21.3%

LT Foods 98.2 31,409 35,122 11.2% 3.8% 1.30x 1.29x 1.17x 11.63x 10.86x 9.97x 23.25x 20.76x 17.58x 20.4% 10.2%

Prataap Snacks 1,236.7 29,004 9,887 7.9% 3.5% 2.82x 2.68x 2.22x 35.54x 31.07x 25.43x 83.04x 65.78x 48.12x N.A. N.A.

Apex Frozen Foods 732.7 22,897 9,596 10.1% 7.0% 2.41x N.A. N.A. 23.95x N.A. N.A. 34.05x N.A. N.A. N.A. N.A.

DFM Foods 1,739.0 17,410 4,196 10.9% 4.6% 4.23x 4.11x 3.48x 38.97x 38.92x 32.95x 96.22x 91.38x 70.28x 24.2% 15.5%

ADF Foods 246.9 5,235 2,039 12.8% 5.4% 2.50x 2.40x 2.20x 19.56x 13.39x 11.09x 47.95x 24.42x 19.83x 6.7% 6.3%

Average

2.79x 2.79x 2.46x 22.69x 21.80x 18.35x 45.25x 42.88x 33.74x

Apparels

Page Industries 22,690.2 253,084 24,419 20.5% 13.1% 10.27x 9.83x 8.02x 50.01x 48.27x 38.58x 79.20x 76.42x 60.65x 46.7% 40.5%

Raymond 975.1 59,852 57,502 6.8% 2.0% 1.32x 1.30x 1.15x 19.49x 18.35x 13.41x 52.28x 62.11x 32.83x 6.7% 3.9%

Lux Industries 1,768.2 44,652 10,757 13.0% 6.5% 4.40x N.A. N.A. 33.87x N.A. N.A. 64.04x N.A. N.A. 26.0% 15.2%

Rupa & Company 461.5 36,697 10,928 12.9% 6.6% 3.42x 3.25x 2.78x 26.56x 24.04x 19.31x 50.79x 42.73x 33.68x 17.9% 15.0%

Dollar Industries 444.3 24,086 9,824 13.1% 6.4% 2.68x 2.72x 2.24x 20.47x 22.47x 16.74x 38.11x 41.13x 26.44x 34.5% 16.9%

Kitex Garments 246.1 16,362 5,459 32.1% 15.3% 2.77x 2.38x 2.03x 8.63x 6.57x 5.59x 19.53x 15.55x 10.90x 20.7% 20.9%

Monte Carlo Fashions 587.0 12,757 6,575 16.7% 9.0% 1.93x 1.88x 1.62x 11.56x 10.30x 8.72x 21.52x 17.37x 14.21x 12.1% 9.0%

Ashapura Intimates Fashion 444.1 11,196 3,112 15.6% 6.5% 3.95x 4.54x 3.88x 25.40x 29.90x 25.81x 55.15x 46.57x 39.27x 17.9% 12.0%

S.P. Apparels 350.4 8,817 6,231 15.3% 8.9% 1.59x 1.42x 1.22x 10.39x 9.89x 7.72x 15.86x 17.67x 13.35x 14.5% 8.4%

Indian Terrain Fashions 200.4 7,602 4,563 10.8% 6.6% 1.64x 1.77x 1.45x 15.19x 15.82x 11.74x 25.20x 25.81x 20.29x 16.6% 13.5%

Nandan Denim 146.4 7,032 15,841 14.1% 3.9% 0.76x 0.77x 0.67x 5.38x 5.06x 4.42x 11.30x 10.98x 9.64x 14.8% 7.6%

Lovable Lingerie 235.6 3,958 1,845 6.5% 3.9% 2.16x N.A. N.A. 33.27x N.A. N.A. 55.47x N.A. N.A. 3.2% 2.5%

Average

3.07x 2.99x 2.51x 21.68x 19.07x 15.20x 40.71x 35.63x 26.13x

;


12


Consumer Scorecard

Company Name

Stock Price


Net Revenues

EBITDA Margin



Breweries & Distilleries

United Spirits 3,214.7 440,232 88,175 11.4% 1.1% 5.45x 5.74x 4.90x 47.91x 44.92x 32.82x N.M. N.M. 57.23x 5.9% 8.7%

United Breweries 1,056.6 279,370 47,292 14.5% 4.9% 6.02x 5.23x 4.63x 41.58x 33.34x 29.83x N.M. 76.14x 63.81x 10.2% 8.4%

Radico Khaitan 359.8 47,964 16,799 12.6% 4.8% 3.29x 3.09x 2.85x 26.11x 20.10x 17.70x 59.43x 41.14x 32.84x 8.0% 5.7%

G.M.Breweries 953.0 13,935 5,892 15.4% 9.9% 2.30x N.A. N.A. 14.90x N.A. N.A. 23.80x N.A. N.A. 26.0% 23.8%

Average

4.27x 4.69x 4.13x 32.62x 32.79x 26.78x 41.62x 58.64x 51.30x

Building Products

Kajaria Ceramics 602.2 95,712 26,813 17.6% 8.9% 3.65x 3.58x 3.09x 20.75x 20.66x 16.92x 39.93x 39.14x 30.51x 20.3% 16.7%

Sheela Foam 1,597.5 77,931 19,129 10.0% 6.1% 4.01x 3.82x 3.30x 40.27x 36.41x 28.53x 66.31x 57.67x 42.71x N.A. N.A.

Greenply Industries 368.3 45,164 16,595 15.0% 7.6% 2.91x 2.81x 2.32x 19.46x 18.93x 15.67x 36.00x 32.13x 30.00x 18.1% 12.1%

Cera Sanitaryware 3,340.3 43,443 10,066 17.4% 9.9% 4.28x 3.67x 3.16x 24.58x 24.24x 19.60x 43.79x 41.08x 32.76x 21.1% 17.0%

Shankara Building Products 1,784.3 40,769 23,882 7.0% 3.0% 1.82x 1.77x 1.56x 25.85x 25.46x 21.25x 56.41x 56.22x 42.22x N.A. N.A.

HSIL 434.7 31,424 20,782 14.1% 4.8% 1.84x 1.63x 1.43x 13.10x 11.47x 9.87x 31.33x 27.54x 20.82x 7.1% 5.2%

Somany Ceramics 693.6 29,394 18,110 10.6% 5.1% 1.72x 1.83x 1.52x 16.18x 18.57x 13.63x 31.58x 40.03x 24.48x 19.6% 13.0%

Greenlam Industries 1,150.3 27,763 10,902 14.4% 5.9% 2.78x 2.94x 2.55x 19.34x 22.46x 18.66x 42.92x 44.93x 33.44x N.A. N.A.

Pokarna 216.5 6,712 3,445 30.7% 13.7% 2.53x N.A. N.A. 8.23x N.A. N.A. 14.22x N.A. N.A. 30.5% 14.3%

Average

2.84x 2.76x 2.37x 20.86x 22.27x 18.02x 40.28x 42.34x 32.12x

Dairy

Hatsun Agro Product 774.8 117,892 44,470 9.1% 2.8% 2.82x 2.63x 2.21x 31.05x 28.01x 22.11x 93.04x 84.21x 55.10x 40.7% 15.7%

Heritage Foods 700.7 32,511 23,368 6.2% 2.4% 1.43x 1.28x 1.10x 22.93x 23.14x 16.21x 57.13x 54.96x 30.82x 15.1% 10.6%

Parag Milk Foods 294.9 24,801 18,650 11.2% 5.2% 1.42x 1.36x 1.20x 12.65x 15.58x 13.15x 25.68x 34.68x 27.35x 14.4% 9.8%

Kwality 90.3 21,489 68,718 6.6% 2.8% 0.54x 0.48x 0.43x 8.15x 7.12x 6.26x 11.07x 9.60x 8.36x 19.7% 10.5%

Prabhat Dairy 184.3 18,002 15,263 8.3% 1.8% 1.30x 1.24x 1.06x 15.61x 14.07x 11.36x 64.52x 37.61x 27.37x 4.1% 5.5%

Umang Dairies 99.7 2,194 2,504 1.8% N.M. 0.98x N.A. N.A. 55.83x N.A. N.A. N.M. N.A. N.A. N.M. 1.4%

Average

1.41x 1.40x 1.20x 24.37x 17.58x 13.82x 50.29x 44.21x 29.80x


13


Consumer Scorecard

Company Name

Stock Price


Net Revenues

EBITDA Margin



Durables

Titan Company 814.3 722,924 152,268 9.7% 6.6% 4.74x 4.64x 3.86x 49.07x 42.42x 33.95x 72.34x 61.03x 48.94x N.A. N.A.

Havells India 515.6 322,428 61,558 13.3% 8.0% 4.95x 3.71x 3.08x 37.34x 29.81x 24.16x 65.20x 47.26x 38.64x 15.3% 13.1%

Whirlpool of India 1,470.5 186,559 45,887 11.8% 7.3% 3.87x 3.70x 3.19x 32.90x 32.59x 26.37x 55.91x 53.87x 42.78x 22.3% 18.6%

CG Consumer Electricals 235.3 147,473 40,801 12.3% 7.5% 3.68x 3.57x 3.09x 29.87x 27.93x 23.09x 48.19x 44.84x 35.21x 64.3% 27.1%

Symphony 1,751.4 122,519 7,680 25.8% 21.6% 15.67x 13.36x 10.98x 60.82x 48.93x 41.03x 73.99x 61.19x 48.76x 42.6% 30.3%

V-Guard Industries 227.7 96,901 23,184 9.1% 6.5% 4.13x 3.99x 3.44x 45.61x 39.65x 31.99x 63.83x 56.58x 44.39x 24.6% 19.7%

TTK Prestige 6,985.7 81,391 18,252 13.1% 15.4% 4.42x 4.44x 3.71x 33.85x 33.10x 26.98x 61.39x 50.34x 41.11x 33.0% 13.1%

Blue Star 733.1 70,333 46,449 5.5% 2.9% 1.53x 1.44x 1.25x 27.74x 25.15x 19.51x 52.03x 45.91x 33.17x 18.5% 11.2%

IFB Industries 1,320.9 53,521 20,882 5.4% 2.8% 2.53x 2.47x 2.02x 46.62x 36.26x 25.93x 90.07x 73.38x 49.77x 12.2% 8.1%

Bajaj Electricals 513.2 52,284 42,617 5.8% 2.4% 1.39x 1.33x 1.17x 23.83x 22.93x 18.09x 51.17x 39.28x 30.31x 12.6% 8.3%

VIP Industries 352.9 49,871 13,737 12.2% 8.0% 3.55x 3.43x 3.03x 28.97x 28.81x 24.67x 45.55x 46.33x 39.04x 26.3% 23.3%

La Opala RG 633.8 35,176 2,862 35.8% 23.5% 11.68x 12.56x 10.50x 32.61x 30.03x 25.18x 52.28x 46.89x 40.21x 19.0% 15.8%

Surya Roshni 473.7 25,774 34,119 6.7% 2.2% 1.01x 0.92x 0.84x 14.90x 14.47x 13.26x 33.96x 35.90x 31.39x 10.2% 6.9%

Hawkins Cookers 2,891.6 15,290 6,069 11.2% 7.8% 2.41x N.A. N.A. 21.48x N.A. N.A. 32.24x N.A. N.A. 56.4% 39.4%

LEEL Electricals 276.1 11,134 33,217 8.3% 2.1% 0.66x N.A. N.A. 7.92x N.A. N.A. 15.91x N.A. N.A. 8.3% 7.2%

Butterfly Gandhimathi 553.0 9,886 5,121 1.7% N.M. 2.15x 2.10x 1.78x N.M. 38.78x 28.61x N.M. N.M. N.M. N.M. N.M.

Average

4.22x 4.51x 3.80x 31.18x 31.46x 25.30x 57.27x 50.98x 40.29x

FMCG

ITC 266.5 3,249,046 428,036 36.0% 24.0% 7.29x 7.35x 6.56x 20.24x 20.00x 17.53x 31.58x 29.74x 26.28x 23.1% 19.9%

HUL 1,350.6 2,923,237 331,620 19.1% 13.5% 8.65x 8.23x 7.28x 45.36x 40.24x 34.39x 65.31x 57.38x 48.87x 67.4% 53.4%

Godrej Consumer Products 1,027.5 700,066 96,790 21.1% 14.5% 7.43x 7.15x 6.28x 35.20x 33.99x 29.49x 49.84x 47.52x 40.33x 28.4% 14.3%

Dabur India 340.8 600,238 75,423 20.6% 17.1% 7.91x 7.46x 6.53x 38.40x 36.83x 31.95x 46.48x 43.69x 37.70x 26.0% 14.6%

Marico 315.4 407,109 61,567 19.1% 13.0% 6.45x 6.16x 5.35x 33.83x 33.68x 28.29x 50.72x 48.55x 40.69x 30.8% 23.7%

P&G Hygiene 9,351.3 303,550 24,385 28.8% 17.4% 12.33x 11.62x 10.01x 42.79x 40.80x 34.61x 71.51x 65.81x 56.74x 34.9% 32.8%

Colgate-Palmolive (India) 1,093.3 297,362 41,373 25.4% 15.2% 7.08x 6.71x 6.00x 27.85x 26.94x 23.66x 47.41x 45.26x 39.30x 42.9% 38.6%

Emami 1,080.0 245,125 24,875 30.9% 13.3% 9.97x 9.51x 8.11x 32.29x 32.70x 27.61x 74.23x 51.63x 39.28x 19.8% 11.0%


14


Consumer Scorecard

Company Name

Stock Price


Net Revenues

EBITDA Margin



Gillette India 6,659.8 217,009 17,480 25.3% 15.3% 12.36x N.A. N.A. 48.91x N.A. N.A. 81.40x N.A. N.A. 34.4% 32.2%

Bajaj Corp 492.7 72,673 7,966 33.2% 27.4% 8.70x 8.21x 7.22x 26.23x 25.72x 22.17x 33.30x 30.89x 26.91x 44.8% 32.4%

Jyothy Laboratories 358.6 65,191 16,753 14.4% 12.9% 4.19x 4.02x 3.51x 29.10x 26.60x 22.66x 30.05x 38.53x 31.90x 21.8% 9.9%

VST Industries 3,289.9 50,802 8,949 31.3% 20.0% 5.42x 4.73x 4.41x 17.33x 15.90x 13.78x 28.43x 26.49x 22.50x 38.4% 32.0%

Godfrey Phillips India 903.0 46,951 22,815 11.3% 6.0% 2.06x N.A. N.A. 18.28x N.A. N.A. 34.21x N.A. N.A. 8.5% 5.7%

Zydus Wellness 1,182.3 46,193 4,851 24.2% 26.3% 8.57x 8.25x 7.22x 35.42x 36.82x 31.68x 36.27x 37.76x 32.05x 22.1% 11.5%

Average

7.74x 7.45x 6.54x 32.23x 30.85x 26.48x 48.63x 43.60x 36.88x

Food & Beverage

Nestlé India 7,260.1 699,988 96,868 19.5% 10.7% 7.00x 5.97x 5.25x 35.92x 27.41x 23.58x 67.70x 46.09x 39.26x 31.5% 29.1%

Britannia Industries 4,759.3 571,398 95,497 14.7% 10.0% 5.92x 5.65x 4.91x 40.15x 37.87x 31.28x 60.05x 56.36x 46.59x 37.0% 29.5%

GSK Consumer Healthcare 6,421.3 270,051 42,372 20.2% 15.7% 5.58x 5.50x 4.93x 27.64x 27.05x 23.90x 40.66x 39.10x 33.79x 22.5% 16.7%

Tata Global Beverages 282.1 178,010 68,006 12.8% 6.9% 2.67x 2.60x 2.42x 20.84x 19.36x 17.21x 38.08x 32.79x 28.81x 7.4% 5.8%

Manpasand Beverages 415.4 47,542 8,309 19.3% 10.6% 5.51x 4.88x 3.54x 28.48x 24.80x 17.45x 53.91x 46.92x 33.54x 9.5% 4.9%

CCL Products (India) 291.7 38,804 11,093 21.5% 12.3% 3.65x 3.49x 3.09x 17.00x 16.38x 13.27x 28.48x 25.91x 20.97x 22.3% 15.6%

Tata Coffee 141.1 26,344 15,288 21.9% 9.5% 2.39x N.A. N.A. 10.91x N.A. N.A. 18.06x N.A. N.A. 14.1% 8.2%

Tasty Bite Eatables 8,140.1 20,887 2,696 17.5% 10.3% 7.92x 6.88x 5.93x 45.27x 38.43x 32.78x 80.09x 81.34x 69.12x 35.6% 17.9%

McLeod Russel India 171.5 18,766 18,708 5.8% 3.1% 1.49x 1.36x 1.22x 25.50x 16.74x 18.17x 32.04x 27.28x 22.01x 3.0% 0.2%

Agro Tech Foods 652.5 15,901 8,043 7.5% 3.6% 1.99x 1.93x 1.78x 26.43x 23.07x 19.02x 54.25x 45.95x 37.07x 8.4% 7.2%

Goodricke Group 406.5 8,780 7,078 8.3% 4.5% 1.27x 1.11x 0.96x 15.36x 6.94x 6.11x 27.78x 11.07x 9.66x 9.3% 7.3%

Vadilal Industries 915.8 6,583 5,208 10.0% 2.7% 1.37x N.A. N.A. 13.62x N.A. N.A. 46.16x N.A. N.A. N.A. N.A.

Jay Shree Tea & Industries 107.0 3,090 7,516 9.0% 0.1% 0.96x N.A. N.A. 10.61x N.A. N.A. N.M. N.A. N.A. 0.3% 3.8%

Average

3.67x 3.94x 3.40x 24.44x 23.81x 20.28x 45.21x 41.28x 34.08x

Footwear

Bata India 718.2 92,308 24,743 11.5% 6.4% 3.52x 3.32x 2.91x 30.62x 24.90x 21.51x 58.07x 41.33x 35.88x 12.5% 10.8%

Relaxo Footwears 601.5 72,393 19,787 13.9% 7.2% 3.73x 3.71x 3.23x 26.93x 25.76x 21.34x 50.87x 47.21x 38.83x 23.6% 18.2%

Mirza International 137.6 16,548 9,257 18.0% 8.0% 2.00x 1.87x 1.61x 11.11x 10.50x 8.90x 22.27x 20.94x 16.65x 14.5% 12.3%

Liberty Shoes 237.4 4,045 4,959 7.9% 1.3% 1.09x N.A. N.A. 13.71x N.A. N.A. 63.30x N.A. N.A. 4.0% 5.5%


15


Consumer Scorecard

Company Name

Stock Price


Net Revenues

EBITDA Margin



Average

2.58x 2.97x 2.58x 20.59x 20.39x 17.25x 48.63x 36.49x 30.45x

Gems & Jeweller

Rajesh Exports 819.8 242,039 1,981,136 0.9% 0.6% 0.11x 0.09x 0.08x 12.24x 10.20x 9.36x 19.74x 17.87x 16.48x 20.6% 8.5%

PC Jeweller 376.4 148,435 84,744 8.9% 5.0% 1.73x 1.46x 1.21x 19.35x 13.99x 11.53x 35.26x 25.82x 21.06x 15.2% 12.2%

Vaibhav Global 690.0 22,486 15,187 8.0% 6.1% 1.49x 1.47x 1.36x 18.50x 17.44x 15.54x 24.17x 28.04x 24.26x 21.8% 13.5%

Thangamayil Jewellery 566.1 7,767 13,824 4.2% 1.7% 0.66x 0.63x 0.57x 15.87x 16.69x 15.31x 33.15x 43.65x 36.17x 15.3% 10.8%

Tribhovandas Bhimji Zaveri 115.6 7,714 16,998 4.1% 0.9% 0.76x 0.73x 0.60x 18.52x 17.19x 13.93x 52.33x 39.86x 22.47x 3.3% 3.7%

Gitanjali Gems 58.6 6,951 182,952 3.8% 1.1% 0.44x 0.42x 0.37x 11.47x 8.42x 7.67x 3.54x 3.24x 2.70x 3.0% 2.7%

Renaissance Jewellery 347.4 6,558 17,758 4.2% 3.5% 0.50x 0.51x 0.44x 11.95x 8.42x 7.14x 10.67x 10.41x 8.59x 12.1% 4.3%

Average

0.81x 0.76x 0.66x 15.41x 13.19x 11.50x 25.55x 24.13x 18.82x

Hotels & Restaurants

The Indian Hotels Company 134.9 160,431 40,020 16.2% 1.6% 4.94x 4.87x 4.37x 30.40x 30.56x 22.55x N.M. N.M. 63.33x N.A. N.A.

Jubilant FoodWorks 2,042.4 134,767 25,834 9.2% 2.2% 5.17x 4.51x 3.93x 55.88x 32.01x 24.92x N.M. 75.22x 52.84x 7.4% 7.1%

EIH 183.0 104,597 15,268 21.5% 6.9% 7.02x 6.55x 5.29x 32.64x 34.47x 24.58x 98.61x 96.32x 61.00x 3.8% 4.0%

Coffee Day Enterprises 331.4 70,009 35,514 17.2% 2.8% 2.72x 2.60x 2.32x 15.77x 15.73x 12.91x 70.36x 84.96x 46.53x 3.9% 3.8%

Westlife Development 340.7 52,999 10,622 6.8% 0.2% 5.06x 4.88x 4.09x N.M. N.M. N.M. N.M. N.M. N.M. 0.4% 0.5%

Hotel Leelaventure 22.7 14,314 6,999 16.1% N.M. 7.96x N.A. N.A. 49.47x N.A. N.A. N.M. N.A. N.A. N.M. N.M.

Speciality Restaurants 152.3 7,152 3,152 N.M. N.M. 2.05x N.A. N.A. N.M. N.A. N.A. N.M. N.M. N.M. N.M. N.M.

Average

4.99x 4.68x 4.00x 36.83x 28.19x 21.24x 84.49x 85.50x 55.92x

Paints

Asian Paints 1,139.2 1,092,670 162,881 19.1% 12.4% 6.65x 6.34x 5.46x 34.91x 33.02x 27.99x 54.09x 52.46x 44.16x 26.7% 20.9%

Kansai Nerolac Paints 508.8 274,175 40,526 18.2% 12.6% 6.53x 5.74x 4.97x 35.89x 32.02x 27.49x 53.88x 50.17x 43.47x 19.1% 15.4%

Berger Paints India 247.5 240,282 49,804 15.2% 9.2% 4.87x 4.64x 4.02x 31.98x 30.08x 25.46x 52.22x 51.12x 41.96x 25.6% 17.1%

Akzo Nobel India 1,803.3 86,484 28,249 12.4% 8.7% 2.96x 2.76x 2.49x 23.95x 25.26x 20.71x 35.01x 39.10x 30.83x 22.7% 16.8%

Average

5.25x 4.87x 4.24x 31.68x 30.09x 25.41x 48.80x 48.21x 40.10x

Retail

Avenue Supermarts 1,198.0 747,653 118,977 8.4% 4.0% 6.25x 4.89x 3.80x N.M. 53.94x 40.71x N.M. N.M. 76.50x 17.9% 13.5%


16


Consumer Scorecard

Company Name

Stock Price


Net Revenues

EBITDA Margin



Future Retail 526.9 264,491 182,926 4.5% 3.3% 1.51x 1.43x 1.17x 33.69x 31.72x 23.61x 43.59x 40.50x 28.79x 24.9% 11.9%

Aditya Birla Fashion & Retail 157.4 121,424 70,339 4.5% 0.4% 1.99x 1.91x 1.64x 44.28x 29.09x 21.50x N.M. N.M. 65.74x 2.8% 3.5%

Trent 316.5 105,178 18,339 7.0% 4.6% 5.88x 4.91x 4.08x N.M. 50.72x 39.69x N.M. 74.18x 51.32x 3.9% 2.9%

Arvind 396.7 102,580 98,806 8.7% 3.0% 1.39x 1.29x 1.15x 15.91x 14.09x 11.21x 34.99x 31.66x 21.33x 9.1% 5.2%

Future Lifestyle Fashions 374.1 71,234 38,771 9.8% 1.2% 2.00x 1.69x 1.42x 20.34x 17.57x 14.46x N.M. 60.38x 41.55x 2.5% 4.6%

Shoppers Stop 534.7 47,027 49,399 3.3% 3.8% 1.13x 1.06x 1.23x 34.53x 21.58x 16.99x 25.24x N.A. N.A. N.A. N.A.

V-Mart Retail 1,601.9 28,989 11,769 10.3% 5.4% 2.49x 2.39x 1.86x 24.21x 23.26x 19.54x 45.40x 42.90x 38.17x 24.0% 19.3%

Future Enterprises 44.9 22,137 44,855 23.0% 0.8% 1.64x N.A. N.A. 7.14x N.A. N.A. 63.25x N.A. N.A. 1.0% 2.7%

Kewal Kiran Clothing 1,580.0 19,474 4,924 20.2% 17.3% 3.77x 3.86x 3.47x 18.68x 18.05x 15.66x 22.84x 22.90x 19.43x 26.0% 16.3%

Zodiac Clothing Company 193.7 3,781 2,851 N.M. 2.2% 1.47x N.A. N.A. N.M. N.A. N.A. 61.56x N.A. N.A. 2.3% N.M.

Average

2.68x 2.60x 2.20x 24.85x 28.89x 22.60x 42.41x 45.42x 42.86x

Textiles

Welspun India 67.9 68,221 54,288 24.7% 8.3% 1.75x 1.51x 1.29x 7.09x 7.33x 5.83x 15.09x 13.31x 9.74x 20.0% 8.3%

Trident 77.3 39,392 46,944 19.0% 7.2% 1.42x 1.40x 1.25x 7.46x 6.97x 5.86x 11.68x 13.10x 8.45x 13.0% 5.2%

Himatsingka Seide 365.9 36,025 22,699 18.6% 8.7% 2.39x 2.36x 2.16x 12.86x 11.82x 9.21x 18.30x 17.86x 13.55x N.A. N.A.

Indo Count Industries 106.6 21,033 21,528 15.1% 10.8% 1.11x 1.14x 1.05x 7.39x 7.26x 6.32x 9.06x 11.89x 9.62x 31.5% 16.5%

Average

1.67x 1.60x 1.44x 8.70x 8.34x 6.81x 13.53x 14.04x 10.34x

About Elara Capital: Elara Capital is a full service investment bank with global presence across India, London, Dubai, Singapore and New York,

offering innovative solutions in established and emerging markets. We are the market leaders in advising Indian Companies for global fund raising

and cross border M&A, having consummated over 75 transactions worth more than US$ 4.5 billion in the short span since our inception.

Meticulous planning and market understanding allows us to operate transactions seamlessly with a constant focus on maximizing client value

irrespective of transaction size. We aim to differentiate ourselves through impeccable service across all our industry groups. Our specialist focus

with regard to transaction nature is in the distribution of Indian equity to domestic/onshore investors and the consummation of cross-border

transactions.


17

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information purpose and does not construe to be investment recommendation/advice. Neither Elara Capital (India) Private Limited or its affiliates, its directors, employees, agent, representatives shall be liable for any

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Elara Capital (India) Private Limited

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Elphinstone Road, Senapati Bapat Marg,

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