A fundamental Analysis on Three Indian FMCG Companies

A fundamental Analysis on Three FMCG Companies

0

LIST OF CONTENTS CHAPTER

1

2

3

4

TITLE

INTRODUCTION

PAGE NO.

1

1.1

Introduction to the Study

2

1.2

Industry Profile

3

1.3

Company Profile

14

1.4

Research Problem

26

1.5

Objectives of the Study

28

1.6

Research Methodology

30

1.7

Scope of the Study

35

1.8

Limitations of the Study

37

REVIEW OF LITERATURE

39

2.1

Fundamental Analysis

40

2.2

Authors Review

42

DATA ANALYSIS

45

3.1

Economy Analysis

46

3.2

Industry Analysis

49

3.3

Company Analysis

52

FINDINGS, SUGGESTIONS AND CONCLUSION

75

ANNEXURE

86

BIBLIOGRAPHY

93

School of Management Studies Vatakara, University of Calicut


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LIST OF TABLES TABLE

TITLE

PAGE NO.

1

Economy Analysis

47

2

Operating Profit Margin

53

3

Net Profit Margin

55

4

Earnings Per Share (Basic)

57

5

Earnings Per Share (Diluted)

59

6

Dividend Per Share

61

7

Dividend Payout Ratio

63

8

Return on Equity

65

9

Earning Yield Ratio

67

10

Price to Book value Ratio

69

11

Price to Earnings Ratio

71

12

Intrinsic Value

73



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LIST OF CHARTS CHART

TITLE

PAGE NO.

1

Operating Profit Margin

53

2

Net Profit Margin

55

3

Earnings Per Share (Basic)

57

4

Earnings Per Share (Diluted)

59

5

Dividend Per Share

61

6

Dividend Payout Ratio

63

7

Return on Equity

65

8

Earning Yield Ratio

67

9

Price to Book value Ratio

69

10

Price to Earnings Ratio

71

11

Intrinsic Value

73



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CHAPTER I

INTRODUCTION


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1.1. INTRODUTION TO THE STUDY Investment decision is a part of our economic life. Everybody takes such decision at different context. Investment decisions are to be made in a systematic manner with two approaches such as technical and fundamental analysis. The present study aims to analyze the fundamental analysis of BSE listed FMCG companies in India with a sample size of six companies for a period from 2006-07 to 2011-12. The objectives of the study are to conduct Fundamental analysis for BSE listed FMCG companies and the SWOT analysis for the FMCG industry. The Economic, Industry and company analysis have been made to attain the objectives of the study. From the Economic analysis, it is found that Gross National Product, Inflation, Interest rates, Exchange rate, Foreign exchange reserves, Agricultural production, Government Receipts and Expenditure has a positive growth rate during the study period. Gross Domestic Product, Gross Domestic Capital Formation, Gross Domestic Savings and Balance of Payments have a negative growth rate during the study period. The industry analysis found that India’s FMCG sector is the 4th largest sector with the total market size of US$ 13 billion during the year 2012. This sector is expected to grow to US$ 33.1 billion by 2015. Hence, it has great potential in rural as well as urban market and it provides more employment opportunities. Motilal Oswal Financial Services Ltd. is a depository participant which is dealing with share trading, commodity trading, mutual funds and portfolio management. It is one of the leading stock broking firm in India which is providing online trading facilities to its customers. The firm has a separate research wing which helps investors by giving suggestions to buy or sell the scrip. The study cover fundamental analysis on selected three companies from the Indian FMCG sector on the basis of share volume and market capitalization. The study was carried on for a period of 21 days.


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1.2. INDUSTRY PROFILE


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1.2.1. STOCK MARKET A stock market is a market for the trading of shares, debentures, derivatives and other instruments of different companies listed on different stock exchanges. Although common, the term ‘the stock market is a somewhat abstract concept for the mechanism that enables the trading of company stocks. It is also used to describe the totality of all stocks, especially within a country, for example in the phrase ‘the stock market was up today’, or in the term ‘stock market bubble’ It is distinct from a stock exchange, which is in an entity (a corporation or a mutual organization) in the business of bringing buyers and sellers of stocks together.

FUNCTIONS OF STOCK MARKET The stock market occupies a pivotal position in the financial system. It performs several economic functions and renders valuable services to the economy as a whole. They may be summarized as below: 1. Liquidity and marketability 2. Safety of funds 3. Supply of long term funds 4. Flow of capital to profitable ventures 5. Motivation for improved performance 6. Promotion of investments 7. Marketing of new issues

HISTORY OF STOCK EXCHANGES IN INDIA The first organized stock exchange in India was started in 1875 at Bombay and it is stated to be the oldest in Asia. In 1894 the Ahmedabad Stock Exchange was started to facilitate dealings in the shares of textile mills there. The Calcutta stock exchange was started in 1908 to provide a market for shares of plantations and jute mills. Then the madras stock exchange was started in 1920. At present there are 24 stock exchanges in the country, 21 of them being regional ones with allotted areas. Two others set up in School of Management Studies Vatakara, University of Calicut

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the reform era, viz., the National Stock Exchange (NSE) and Over the Counter Exchange of India (OICEI), have mandate to have nation-wise trading. They are located at Ahmedabad, Vadodara, Bangalore, Bhubaneswar, Mumbai, Kolkata, Kochi, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur’ Kanpur, Ludhiana, Chennai Mangalore, Meerut, Patna, Pune, Rajkot. The Stock Exchanges are being administered by their governing boards and executive chiefs. Policies relating to their regulation and control are laid down by the Ministry of Finance. Government also Constituted Securities and Exchange Board of India (SEBI) in April 1988 for orderly development and regulation of securities industry and stock exchanges.

MAJOR PARTICIPANTS IN THE INDIAN STOCK MARKET There are 23 stock exchanges in India. Among them two are national level stock exchanges namely Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE). The rest 21 are Regional Stock Exchange (RSE). Even though there are 23 stock exchanges in India, increase in turnover took place mostly in the large exchanges at the expense of smaller ones. BOMBAY STOCK EXCHANGE Type

: Stock exchange

Location

: Mumbai, Maharashtra, India

Founded

: 1875

Owner

: BSE Limited

Key people

: Ashishkumar Chauhan (MD & CEO)

Currency

: Indian rupee (₹)

Market cap

: US$ 1.7 trillion (23 Jan 2015)

Volume

: US$ 93 billion (June 2014)

Indices

: BSE SENSEX BSE Small Cap BSE Mid-Cap BSE 500

Website

: www.bseindia.com


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The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to 1855, when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as "The Native Share & Stock Brokers Association". On 31 August 1957, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. In 1980, the exchange moved to the Phiroze Jeejeebhoy Towers at Dalal Street, Fort area. In 1986, it developed the BSE SENSEX index, giving the BSE a means to measure overall performance of the exchange. In 2000, the BSE used this index to open its derivatives market, trading SENSEX futures contracts. The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system developed by CMC Ltd in 1995. It took the exchange only fifty days to make this transition. This automated, screen-based trading platform called BSE On-line trading (BOLT) had a capacity of 8 million orders per day. The BSE has also introduced a centralized exchange-based internet trading system, BSEWEBx.co.in to enable investors anywhere in the world to trade on the BSE platform. The BSE is also a Partner Exchange of the United Nations Sustainable Stock Exchange initiative, joining in September 2012. NATIONAL STOCK EXCHANGE Type

: Stock exchange

Location

: Mumbai,, India

Founded

: 1992

Owner

: National Stock Exchange of India Limited

Key people

: Chitra Ramkrishna (MD&CEO)

Currency



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Currency


No. of listings : 1,696 Market cap

: US$1.65 trillion (23 Jan 2015)

Volume

: US$442 billion (June 2014)

Indices

: CNX Nifty CNX Nifty Junior CNX 500

Website

: www.nseindia.com

The National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, located in Mumbai. NSE was established in 1992 as the first demutualized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facility to the investors spread across the length and breadth of the country. NSE has a market capitalization of more than US$1.65 trillion, making it the world’s 12th-largest stock exchange as of 23 January 2015. NSE's flagship index, the CNX Nifty, the 50 stock index, is used extensively by investors in India and around the world as a barometer of the Indian capital markets. NSE was set up by a group of leading Indian financial institutions at the behest of the Government of India to bring transparency to the Indian capital market. Based on the recommendations laid out by the Govt. committee, NSE has been established with a diversified shareholding comprising domestic and global investors. The key domestic investors include Life Insurance Corporation of India, State Bank of India, IFCI Limited IDFC Limited and Stock Holding Corporation of India Limited. And the key global investors are Gagil FDI Limited, GS Strategic Investments Limited, SAIF II SE Investments Mauritius Limited, Aranda Investments (Mauritius) Pte Limited and PI Opportunities Fund I. NSE offers trading, clearing and settlement services in equity, equity derivatives, debt and currency derivatives segments. It is the first exchange in India to introduce electronic trading facility thus connecting together the investor base of the entire School of Management Studies Vatakara, University of Calicut

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country. NSE has 2500 VSATs and 3000 leased lines spread over more than 2000 cities across India. The exchange was incorporated in 1992 as a tax-paying company and was recognized as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the Prime Minister of India and Manmohan Singh was the Finance Minister. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The capital market (equities) segment of the NSE commenced operations in November 1994, while operations in the derivatives segment commenced in June 2000. REGIONAL STOCK EXCHANGES (RSE) 1. Ahmedabad Stock Exchange 2. Bangalore Stock Exchange 3. Bhubaneshwar Stock Exchange 4. Calcutta Stock Exchange 5. Cochin Stock Exchange 6. Coimbatore Stock Exchange 7. Delhi Stock Exchange 8. Guwahati Stock Exchange 9. Hyderabad Stock Exchange 10. Jaipur Stock Exchange 11. Kanara Stock Exchange 12. Ludhiana Stock Exchange 13. Madras Stock Exchange 14. Madhya Pradesh Exchange 15. Magadh Stock Exchange 16. Meerut Stock Exchange 17. OTC Exchange of India 18. Pune Stock Exchange 19. Saurashtra Kutch Stock Exchange School of Management Studies Vatakara, University of Calicut

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20. Uttar Pradesh Exchange 21. Vadodara Stock Exchange The Regional Stock Exchanges started clustering from the year 1894, when the first RSE, the Ahmedabad Stock Exchange (ASE) was established. In the year 1908, the second in the series, Culcutta Stock Exchange (CSE) came into existence. During the early sixties, there were only few recognized RSE in India namely Culcutta, Madras, Ahmedabad, Delhi, Hyderabad, and Indore. The number remained unchanged for the next two decades. 1980s was the turning point and many RSEs were incorporated. The latest is Coimbatore Stock Exchange and Meerut Stock Exchange.

1.2.2. FMCG INDUSTRY Fast Moving Consumer Goods (FMCG) Industry in India is one of the fastest developing sectors in the Indian economy. At present the FMCG Industry is worth US$ 13.1 billion and it is the 4th largest in the Indian Economy. These products have very fast turnaround rate, i.e. the time from production to the revenue from the sell of the product is very less. In the present economic scenario, time is regarded as money, so the FMCG companies have to be very fast in manufacturing and supplying these goods. The Fast Moving Consumer Goods (FMCG) Industry in India include segments like cosmetics, toiletries, glassware, batteries, bulbs, pharmaceuticals, packaged food products, white goods, house care products, plastic goods, consumer non-durables, etc. The FMCG market is highly concentrated in the urban areas as the rise in the income of the middle-income group is one of the major factors for the growth of the Indian FMCG market.

The penetration in the rural areas in India is not high as yet and the opportunity of growth in these areas is huge by means of enhanced penetration in to the rural market and conducting awareness programs in these areas. The scopes for the growth of the FMCG industry are high as the per capita consumption of the FMCG products in India is low in comparison to the other developed countries. The manufacturing of the FMCG School of Management Studies Vatakara, University of Calicut

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goods is concentrated in the western and southern belt of the country. There are other pockets of FMCG manufacturing hubs.

SCOPE OF FMCG INDUSTRY IN INDIA The FMCG (Fast Moving Consumer Goods) companies have faced tough competition among themselves over the years which is continuously increasing. This is due to the increase in per capita income among individuals and also various developments in rural economy. The FMCG sector has changed its strategies and has opted for a more wellplanned marketing of the products to penetrate both the rural and urban markets. To execute these tasks, the FMCG companies are hiring more and more people which has led to an increase in the job prospects in this sector. Thus, FMCG sector is creating massive employment with good career prospects. Marketing, retail, sales, services and supply are the key areas which generates maximum career scopes in FMCG Industry in India. FMCG sector in the Indian rural market is one of the most booming sectors in Indian economy. The villages of India account for 12.2% of the world's population. The farm sector has been one of the significant sectors which boosted the rural economy resulting in the higher consumption of FMCG products. The consumers in both rural and urban sectors can afford high-priced branded products nowadays with the high disposable income. The FMCG sector in India has grown significantly in the year 2007 and this gave rise to huge prospects in the sector. The rural and urban sectors fared equally well in the processed food items in the year 2007. The rural market separately performed well in the personal care, fabric care, and hot beverages while the urban market did well in home care, personal care, bakery, dairy products, and the like.

COMPETITION IN THE FMCG SECTOR India's huge population has always been a significant factor for the growth of FMCG sector in the country. Between 1950 and 1980, the consumption of FMCG products were relatively low due to the low per capita income. The post-liberalization era in India has witnessed a massive growth in the selling of products in the domestic market. The Indian market also imported loads of products from overseas markets which made School of Management Studies Vatakara, University of Calicut

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increased the competition between the organized and the unorganized sector.

The easing of the trade barriers encouraged the MNCs to invest in the Indian market to cater to the needs of the consumers. The living standards rose in the urban sector due to high disposable income along with the rise in the purchasing power of the rural families which increased the sales volume of various manufacturers of the FMCG products in India. The large-scale companies such as HLL, Godrej Consumer, Marico, Henkel, Reckitt Benckiser and Colgate have targeted the rural consumers and have also expanded their retail chain in the mid-sized towns and villages. On the contrary to this, Nestle has always targeted the market of urban India and focuses largely upon the value added products for the elite class or upper middle class population.

MNCs IN FMCG SECTOR MNCs in FMCG Sector in India are doing very good business. The major FMCG companies in India are mostly Multi-National Companies (MNC), such as Nike, Reebok, Puma, Pepsi Co, L'Oreal, etc. The experts believe that in the future the MNCs would dominate the FMCG sector India. The FMCG market consists of products such as personal care products, toiletries products, cosmetics products, house care products, white goods, etc. The market is expected to witness the emergence of large players. TOP 10 COMPANIES According to the study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the balance by Indian companies. Fifteen companies own these 62 brands, and 27 of these are owned by Hindustan Unilever. The top ten India FMCG brands are: 1. Hindustan Unilever Ltd. 2. ITC (Indian Tobacco Company) 3. Nestlé India 4. GCMMF (AMUL)


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5. Asian Paints (India) 6. Cadbury India 7. Britannia Industries 8. Dabur India 9. Procter & Gamble Hygiene and Health Care 10. Marico Industries

GROWTH OF FMCG SECTOR IN INDIA There is stiff Competition in the FMCG sector in India and the competition is expected to increase in the coming years. FMCG sector in India is most likely to witness more than 50% growth in the semi-urban and rural areas in India by the year 2010 according to the reports of the Associated Chambers of Commerce and Industry of India (Assocham) of July 2005. The sector is estimated to grow by 10% per year and reach a market size of ` 100,000 crores by 2010 from 48,000 crores in 2005. The people of both rural and urban regions in India are consuming high volume of fast moving consumer goods these days due to the higher disposable income. This has led to a surge in the setting up of a number of FMCG companies in India to meet the rising demand of the consumers. The rural market has grown significantly over the years. The FMCG companies which have grown significantly in India in the last few years are Nirma, HLL, Dabur, ITC, Godrej, Britannia, Coca-Cola, and Pepsi.

RECENT DEVELOPMENTS  Finance Minister, Mr. P. Chidambaram declared several tax sops for the FMCG sector in India along with putting due emphasis on the infrastructure developments in the same.  The usual growth drivers such as penetration, per capita consumption, population, and household income were quite strong in 2007 and also the consumption of the FMCG products has been increased outstandingly in 2007.  Biscuits worth ₹ 50 per kilogram are fully exempted from excise duty, customs duty School of Management Studies Vatakara, University of Calicut

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on food processing machineries were reduced from 7.5% to 5%, excise duties on food mixes were reduced from 16% to 8%, and taxes were reduced on edible oils. ITC, Dabur, HUL and Marico were directly benefited from these.  The consumption of health and personal care products in FMCG sector has increased in the recent past with rise in disposable income especially among the youth group in India.


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1.3. COMPANY PROFILE


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1.3.1. COMPANY OVERVIEW

Name

: Motilal Oswal Financial Services Limited

Type

: Financial services

Industry

: Finance

Founded

: Mumbai, India, 1987

Headquarters

: Motilal Oswal Tower, Prabhadevi, Mumbai

Key people

: Motilal Oswal, Raamdeo Agrawal

Services

: Wealth Management, Retail Broking & Distribution, : : : : : : : : : Commodity Broking, Asset Management, Institutional Broking, : Private Equity & Investment Banking Services.

Parent

: Motilal Oswal Financial Services Ltd

Subsidiaries

: Motilal Oswal Securities Ltd, Motilal Oswal Investment Services, Motilal Oswal Investment Advisors Pvt. Ltd, Motilal Oswal Private Equity Advisors Pvt. Ltd, Motilal Oswal Asset Management Co. Ltd, Aspire Home Finance Corporation Ltd.

Website

: www.motilaloswal.com

Motilal Oswal Financial Services is a well-diversified financial services group having businesses in securities, commodities, investment banking and venture capital. With 1300 business locations and more than 3,85,000 customers in over 425 cities, Motilal Oswal is well suited to handle all your wealth creation and wealth management needs. The company has in the last year placed 9.48% with two leading private equity investors - New Vernon Private Equity Limited and Bessemer Venture Partners at post money company valuation of Rs.1345 corer. (Rs.13.45 billion). o Motilal Oswal Financial Services Ltd (MOFSL) offers diversified financial services, including retail broking & distribution, institutional broking, private School of Management Studies Vatakara, University of Calicut

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equity, wealth management, asset management, investment banking and housing finance. o Enabling wealth creation for all its customers, such as institutional clients, HNWIs and retail customers. o MOFS has more than 800,000 total customers, which includes over 700,000 retail clients and over 500 institutions. o Focused on ‘Solid Research Solid Advice’ and ‘Knowledge First’ mantras to project itself as a research-driven organization. o Pan-India network is spread over 1,700 locations across 500 cities, including franchisee outlets and own branches. o Shares listed on the Bombay Stock Exchange and National Stock Exchange in Mumbai.

GROUP STRUCTURE MOTILAL OSWAL FINANCIAL SERVICES LTD.

MOTILAL OSWAL SECURITIES LTD.

MOTILAL OSWAL INVESTMENT ADVISORS PVT. LTD.

Institutional Equities Broking & Distribution

Investment Banking

MOPE INVESTMENT ADVISORS PVT LTD.

Private Equity Real Estate

MOTILAL OSWAL WEALTH MANAGEMENT LTD.

Financial Strategy Wealth Management

MOTILAL OSWAL ASSET MANAGEMENT CO. LTD. PMS Mutual Funds Offshore Funds

ASPIRE HOME FINANCE CORPORATION LTD.

Housing Finance

MOTILAL OSWAL COMMODITIES BROKER PRIVATE LTD.

Commodity Broking

GROWTH OF THE COMPANY In March 2006, AQ Research, a firm that analyses the accuracy of a broker’s research call, declared Motilal Oswal Securities the best research house for Indian stocks. Research is the solid foundation on which Motilal Oswal Securities advice is based. School of Management Studies Vatakara, University of Calicut

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Almost 10% of revenue is invested on equity research and we hire and train the best resources to become advisors. At present we have 24 equity analysts researching over 26 sectors. From a fundamental, technical and derivatives research perspective; Motilal Oswal's research reports have received wide coverage in the media (over a 1000 mentions last year). Motilal Oswal Securities has witnessed rapid organic growth due to favorable market conditions as well as efforts put in by the company itself. FY05 and FY06 saw the company grow inorganically through acquisition of three significant regional broking firms from Karnataka, Kerala and UP. Over a period of time many more regional broking firms may be acquired to gain solid footing in various regions of India. The company has also established a base in the UAE to address the needs of the overseas audience. Motilal Oswal Securities Limited (MOST) has established itself as the Most Independent Research - Local Brokerage (Asia Money Brokers’ Poll 2006). Its Institutional Equities Division combines the efforts of our Research and Sales & Trading departments to best serve clients' needs. It believes it is its unflinching commitment to providing superior client service that makes us stand out. They have a dedicated research team, which is engaged in analyzing the Indian economy and corporate sectors to identify equity investment ideas. They staunchly practice the valueinvesting philosophy and advise investors to take a long-term view of equity investments. Consistent delivery of high quality advice on individual stocks, sector trends and investment strategy has established us as a reliable research unit amongst leading Indian as well as international investors. Our sales & trading team comprising top equity professionals, translates the research findings into actionable advice for clients, based on their specific needs. Each of our sales personnel has significant experience in equity research. Sophisticated computerized tools are used to understand client investment profile and objectives, which ensures proactive and timely service.

COMPANY CORE PURPOSE To be a well-respected and preferred global financial services organization enabling wealth creation for all our customers.


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VALUES FOLLOWING  Integrity A company honoring commitment with highest ethical and business practices.  Team Work Attaining goals collectively and collaboratively.  Meritocracy Performance gets differentiated, recognized and rewarded in an apolitical environment.  Passion & Attitude High energy and self-motivated with a “Do It” attitude and entrepreneurial spirit.  Excellence in Execution Time bound results within the framework of the company’s value system.

PRODUCT/SOURCE OF INCOME Product Name

Sales

Sales Value

Qty.

(In million)

Interest

0.00

657.44

51.08

Dividend

0.00

437.44

34.01

Profit on Sale of NonCurrent Investment Rent Income

0.00

106.69

8.29

0.00

81.90

6.36

Other Operating Revenue

0.00

3.35

0.26


% of STO

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MANAGEMENT TEAM

Murli Krishnan Iyer

_

(Company Secretary)

Vivek Paranjpe

Raamdeo Agarawal

(NonExecutive Independent Director)

(Joint Managing Director)

Motilal Oswal (Chairman & MD) Praveen Tripathi

Navin Agarwal

(NonExecutive Independent Director)

(Non-Executive NonIndependent Director)

Sharda Agarwal (NonExecutive Independent Director)

CORPORATE GOVERNANCE  BOARD & COMMITTEES MOFSL is committed to ensuring compliance with the best practices in corporate governance. ● Composition of MOFSL’s Board of Directors: o The Board currently consists of 7 Directors with more than 50% composition of Independent Directors (4 Independent Directors and 3 Non Independent


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Directors) ● MOFSL has some major Board level Committees: o Audit Committee o Stakeholders Relationship Committee o Nomination and Remuneration/Compensation Committee o Corporate Social Responsibility Committee; o Risk Management Committee o Asset Liability Management Committee o ESOP Committee o Debenture Committee  INDEPENDENT DIRECTORS o Mr Balkumar Agarwal is a retired IAS officer (1967 batch). He has served as Additional Chief Secretary, Secretary (Housing), Secretary (Transport), and Secretary (Industries) to the Government of Maharashtra, and as the MD at Maharashtra State Warehousing Corp, Maharashtra State Financial Corp etc. o Mr Praveen Tripathi is the CEO of Magic9 Media & Consumer Knowledge Pvt Ltd. He is the Chairman of the National Consumer Classification System Committee and has also worked with Pidilite, Hansa Consulting, Zenithmedia, Starcom/Leo Burnett etc. o Mr Vivek Paranjpe is a consultant in HR and strategic management with companies like Reliance Industries, Blackstone etc. Prior to this, he was the Director, HR Operations at HP Singapore, and has also worked with Hotel Corp, Johnson & Johnson, and Hindustan Lever etc. o Ms Sharda Agarwal co-founded a strategy marketing consulting firm in 2005 where she consulted 100+ companies in ~175 assignments. She also set up a consulting oriented market research firm ‘Market Gate Dimensions’ in 2011. Prior to this, she worked with Johnson and Coca Cola. School of Management Studies Vatakara, University of Calicut

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1.3.2. SCRIP PROFILE


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1.3.2.1. HINDUSTAN UNILIVER LIMITED (HUL) COMPANY OVERVIEW : Public : BSE: 500696 BSE SENSEX Constituent : Consumer goods : 1932 : Mumbai, Maharashtra, India : Harish Manwani (Chairman), Sanjiv Mehta (CEO and MD) : Foods, beverages, cleaning agents, personal care products and Water purifiers. Revenue : ₹ 30,170 crores (2014-15) Net income : ₹ 4,315 crores (2014-15) Number of employees : 18,000 (2014) Parent : Unilever Plc (67%) Website : www.hul.co.in Type Traded as Industry Founded Headquarters Key people Products

Hindustan Unilever Limited (HUL) is an Indian consumer goods company based in Mumbai, Maharashtra. It is owned by Anglo-Dutch company Unilever which owns a 67% controlling share in HUL as of March 2015 and is the holding company of HUL. HUL's products include foods, beverages, cleaning agents, personal care products and water purifiers. HUL was established in 1933 as Lever Brothers and, in 1956, became known as Hindustan Lever Limited, as a result of a merger between Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and employs over 16,000 workers, whilst also indirectly helping to facilitate the employment of over 65,000 people. The company was renamed in June 2007 as "Hindustan Unilever Limited”. Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products.

PRODUCTS 

Food


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

Homecare



Personal Care



Water Purifier

MAJOR BRANDS Lux

Surf Excel

Clinic Plus

Rin

Close up

Pond's

Pepsodent

Fair & Lovely

Dove

Sunsilk

Vim

Wheel

Vaseline

Pears

Lakme

Lifebuoy

1.3.2.2. ITC LIMITED COMPANY OVERVIEW : Public : BSE: 500875 NSE: ITC BSE SENSEX Constituent CNX Nifty Constituent Industry : Conglomerate Predecessor : W.D. & H.O. Wills Founded : August 24, 1910 (as Imperial Tobacco Company of India) Headquarters : Kolkata, West Bengal, India Key people : Y C Deveshwar, (Chairman) Products : Tobacco, hotels, paperboards &specialtypapers,packaging, agri- business, packaged foods &confectionery, IT, branded a apparels, personal care, stationery, safety matches and other F FMCG proudcts. Revenue : ₹ 51,932 Crores (US$ 8.31 billion) (2013-14) Operating income : ₹ 13,051.89 Crores (US$ 2.11 billion) (2013-14) Net income : ₹ 8,990.62 Crores (US$ 1.45 billion) (2013-14) Total assets : ₹ 39,929 Crores (US$ 6.47 billion) (Mar 2014) Total equity : ₹ 26,262.02 Crores (US$ 4.27 billion) (Mar 2014) Number of employees : 25,959 (Mar 2013) Divisions : ITC Infotech, Surya Nepal Pvt. Ltd. Website : www.itcportal.com Type Traded as

ITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal. Its

diversified

business

includes

five

segments: Fast

Moving

Consumer

Goods (FMCG), Hotels, Paperboards & Packaging, Agri Business & Information Technology. Established in 1910 as the Imperial Tobacco Company of India Limited, School of Management Studies Vatakara, University of Calicut

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The company was renamed as the Indian Tobacco Company Limited in 1970 and further to I.T.C. Limited in 1974. The periods in the name were removed in September 2001 for the company to be renamed as ITC Ltd. The company completed 100 years in 2010 and as of 2012-13, had an annual turnover of US$8.31 billion and a market capitalization of US$45 billion. It employs over 25,000 people at more than 60 locations across India and is part of Forbes 2000 list.

PRODUCTS 

Cigarettes



Food



Lifestyle apparel



Personal care



Stationary



Safety matches and Agarbattis



Hotels



Paperboard



Packaging and Printing



Information Technology

MAJOR BRANDS Ashirvad

Yippee!

John Players

Mint-o

Will Lifestyle

Classmates

Vivel

Superia

B natural

Fiama Di Wills

Sufeast

Bingo!

Gum-o

Gold Flake Kings

Candyman

Aim

Mangaldeep

Engage

WelcomHotel

Wills Navy Cut


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1.3.2.3. MARICO LIMITED COMPANY OVERVIEW Type Industry Founded Headquarters Key people Products Revenue Number of employees Website

: Public company (BSE: 531642) : Consumer goods : 1987 : Santacruz, Mumbai, India : Saugata Gupta[1] : Edible Oil, Hair Oils, Skin Care, Fabric Care, etc. : ₹ 5733.3 crore(US$870 million) : 3230 (2015) : www.marico.com

Marico is an Indian consumer goods company providing consumer products and services in the areas of Health and Beauty based out of Mumbai. During 2009–10, the company generated a turnover of about ₹ 2,660 crore (USD 600 million). Marico's own manufacturing facili ties are located at Goa, Kanjikode, Jalgaon, Pondicherry, Dehradun, Baddi, Paonta Sahib, Perundurai and Daman. In Bangladesh, Marico operates through Marico Bangladesh Limited, a wholly owned subsi diary. Its manufacturing facility is located at Shirirchala, near Gazipur.

PRODUCTS 

Edible Oils



Hair Oils



Skin Care



Fabric Care

MAJOR BRANDS Parachute

Saffola

Hair & Care

Kaya Skin Clinic

Livon

Eclipse

X-men

Hercules

Revive

Caivil

Code 78

Manjal


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1.4. RESEARCH PROBLEM


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1.4. RESEARCH PROBLEM Any person who invests his hard earned money in shares and security must possess adequate knowledge about securities market and securities price. Investors should be very careful and should exercise his skills, knowledge and experience for choosing investment opportunity. Otherwise the whole of the investment may go waste. They must identify the underpriced and overpriced securities. The mispricing of securities provides an opportunity to the investor to acquire the share or dispose of the share profitably. Therefore the study of the securities market and reasons for the movement of securities is essential for any investors who invest his money in shares. In this context, the present study becomes highly essential on the following grounds. 

Is the investment in listed FMCG companies is more rewarding or not?



Are FMCGs shares floating steadily?


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1.5. OBJECTIVES OF THE STUDY


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1.5. OBJECTIVES OF THE STUDY 

Primary Objectives To conduct Fundamental analysis for stock market listed FMCG companies and SWOT analysis for the FMCG industry.



Secondary Objectives 1. To select the best performing company among the selected three companies. 2. To know about the FMCG sector in India. 3. To check whether fundamental analysis alone can evaluate investment opportunities in the share. 4. To forecast the future performance of the selected companies. 5. To recognize the suitability of the shares for investment in long term.


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1.6. RESEARCH METHODOLOGY


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1.6. RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may understood as a science of studying how research is done scientifically. It is the description, explanation and justification of various methods of conducting research. In it we understand the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them.

1.6.1. SAMPLE SELECTION CRITERIA The FMCG companies which satisfied the following criteria have been selected. The criteria are: o FMCG companies listed in security market. o Availability of data for a period of three years. o Accounting year must be from April to March. Companies that satisfy the above conditions are:  Hindustan Unilever Limited  ITC Limited  Marico Limited

1.6.2. SOURCE OF DATA The study is based on the secondary data. The audited financial statements of the companies are the main source of data. The major data sources used in this study are: o

Annual Reports of Companies

o

Websites

o

Journals

o

Magazines

o

Reference Books

1.6.3. PERIOD OF STUDY This study is based on analytical nature and covers period of three years from 2012-13 School of Management Studies Vatakara, University of Calicut

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to 2014-15.

1.6.4. TOOLS USED FOR ANALYSIS 1. RATIOS a) Operating Profit Margin (OPM) The operating profit margin indicates the profit of the company after depreciation, but before interest and taxes are deducted from the earnings. Operating profit margin = Operating profit / Revenue = EBIT / Revenue x 100 b) Net Profit Margin (NPM) Net profit margin measures the amount of profits available to shareholders after depreciation, interest and taxes are deducted from the earnings. Net profit margin = Net profit / Revenue x 100 c) Earnings per Share (EPS) This ratio indicates the profits available to equity share holders per share, this helps to determine the market price of equity shares. Earnings per Share = Profit after Tax / No. of equity shares. d) Dividend per Share (DPS) The amount of profits distributed to shareholders per share is known as DPS and may be calculated as follows: Dividend per Share = Amount declared as dividend / No. of equity shares. e) Dividend Payout Ratio (DP Ratio) The DP ratio is the ratio between the DPS and EPS of the firm, i.e., it refers to the proportion of the EPS which has been distributed by the company as dividends. Dividend payout ratio may be calculated as follows: Dividend Payout Ratio = DPS / EPS x 100


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f) Price to Earnings Ratio (PE Ratio) The PE Ratio indicates the expectations of the equity investors about the earnings of the firm. The PE ratio is one of the most widely used measures of financial analysis in practice and is calculated as follows. Price to Earnings ratio = Market Price per Share /Earnings per Share. g) Return on Equity (RoE) The RoE examines profitability from the perspective of the equity investors by relating profits available for the equity share holders with the book value of the equity investment. Return on Equity = Net Income/Shareholder's fund h) Earning Yield Ratio The yield is defined as the rate of return on the amount invested. With the reference to equity shares, the yield may be defined as the rate of return on the market piece of equity shares. Earnings Yield Ratio = Earnings per share / Market price per share. i) Price to Book Value Ratio The book value of a share provides a floor below which the market price of a share is not expected to fall. Shares which have lower PB Ratio may be considered as a ‘safer’ investment and vice versa. Price to Book Ratio = Market price per share/Book value per share. 2. INTRINSIC VALUE The actual value of a company or an asset based on an underlying perception of its true value including all aspects of business in terms of both tangible and intangible factors. The value may or may not be same as the current market value. The true economic worth of the share is its intrinsic value. The fundamental analyst finds out intrinsic value of a share by using the formula: Intrinsic Value = Earnings per share x Price to Earnings ratio. School of Management Studies Vatakara, University of Calicut

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3. SWOT ANALYSIS

SWOT Analysis is the analysis of strength, weakness, opportunity, and threats of the organization. The company’s success is mainly depending on the accurate managing of SWOT. Strength is to be maximized, weakness is to be reduced and should concentrated on opportunities and avoid threats. 1.6.5. TOOLS USED FOR PRESENTATION 1. Bar diagram 2. Tabular presentation


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1.7. SCOPE OF THE STUDY


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1.7. SCOPE OF THE STUDY This study provides a precise presentation of data and guidelines that will help a fresh investor as well as a venture investor to know vital aspects of investing. This study helps to the investors to choose a safe investment and to identify the growth opportunities in the future. FMCG industry is one of the major and important industries in the world. Large numbers of foreign investors are coming and investing in Indian FMCG sector due to its large potential growth in future. The scope of the study is limited to analyzing the financial statements and periodical reports published by the company and the information from the journals and websites.


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1.8. LIMITATIONS OF THE STUDY


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1.8. LIMITATIONS OF THE STUDY o The study is confined only to the listed FMCG companies o External factors may adversely affect the industry as well as its share price. E.g. o Government policies, competition, tax imposition, global market, FDI/FII etc. Hence, the movement of stock price is not 100 per cent predictable. o The present study uses ratios as an important tool of analysis which itself has a number of limitations on its applicability.


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CHAPTER II

REVIEW OF LITERATURE


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2.1. FUNDAMENTAL ANALYSIS Fundamental analysis is the study of economic, industry, and company conditions in an effort to determine the value of a company’s share. Fundamental analysis typically focuses on key statistics in a company’s financial statements to determine if the stock price is correctly valued. After determining the condition and outlook of the economy, the industry, and the company, the fundamental analyst determines if the company’s stock is overvalued, undervalued or correctly valued. Fundamental analysis covers various financial and non-financial aspects such as evaluation of the economy and industry scenario, company management and company financial position and so on.

FUNDAMENTAL ANALAYSIS

ECONOMY ANALYSYIS

GNP GDP INFLATION RATE INTEREST RATE EXCHANGE RATE FOREX RESERVES GOVT. RECEIPTS GOVT. EXPENDITURE

INDUSTRY ANALYSYIS

GROWTH RATE AND SWOT ANALYSIS


COMPANAY ANALYSYIS

GPM, NPM, OPM EPS, DPS, DP RATIO, PE RATIO, ROE EARNINGS YIELD RATIO DIVIDEND YIELD RATIO PRICE TO BOOKVALUE RATIO INTRINSIC VALUE

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Three phase of the fundamental analysis are: o Understanding of the Macro Economic environment and developments (Economic analysis) o Analyzing the prospectus of the industry to which the firm belongs (Industry analysis) o Assessing the performance of the company (Company analysis)

2.1.1. ECONOMY ANALYASIS Economic analysis deals with the analysis of operating in the overall economy. In security analysis, the expected course of the economy must be inquired into because overall economic conditions and economic activities affect corporate profits and investors’ expectations and thereby affect the security prices in decisions. Investors consider those variables of the economy, which affect the performance of the company in which they tend to invest. The economic variables used in this study such are:      

Gross National Product (GNP) Gross Domestic Product (GDP) Inflation Rates Interest Rates Foreign Exchange Reserves Government Receipts and Expenditure

2.1.2. INDUSTRY ANALYSIS An industry described as a homogeneous group of companies. It may be defined as a group of firms producing reasonably similar products that serve the same need of a common set of buyers. The profitability of an industry depends upon its stage of growth. These externalities depend on the availabilities of inputs power and interrelations between the economy and industry. In India, companies like HUL, ITC, Marico have been a dominant force in the FMCG sector well supported by relatively less competition and high entry barriers (import duty was high). The industry analysis moves from macroeconomic analysis to microeconomic analysis. The process normally includes conducting thorough study of its three sub-heads, namely structural framework, School of Management Studies Vatakara, University of Calicut

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industry lifecycle and competitive environment. In this study the growth of consumer goods industry is analyzed by comparing sales volume, expenditure, profit and income of the industry. A SWOT analysis of the FMCG industry also done in this study.

2.1.3. COMPANY ANALYSIS The investor should identify the leading competitive companies in each industry since this is where good investment values will be found. Company analysis attempts to study the various factors affecting and indicating the performance of a company, such as, competitive position of the company, quality of management, technology, product analysis, brand image and market share, marketing strategy, etc. Company financial analysis is the process of identifying the financial strengths and weaknesses of a company by properly establishing the relationship between the items of balance sheet, profit and loss account and other financial statements. The most powerful tools of financial analysis is ratio analysis. This study used the different ratios and intrinsic valuation model.

2.2. AUTHORS REVIEW A brief review of literature would help the researcher, reader and other research scholars in gaining an insight into the studies, which were made in areas related to the subject of this study. The findings of some of the studies are briefly summarized as follows. 1. SANDIP MUKHERJI, MANJEET, AND KIM (1997) Fundamental Analysis of Korean Stock Returns” in their article examined about the relation between stock return and fundamental variables in Korean firms annual stock returns during the period of 1982-83. The study found that stock returns are positively related to book-market ratio, sales-price ratio and debt-equity ratio. It is also found that return is negatively related to firm size and not significantly related to earnings price ratio. They suggested that book-market and sales-price ratios are more efficient School of Management Studies Vatakara, University of Calicut

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indicators than the earnings-price and the debt-equity ratio. 2. JIANG XIA (2000) “Fundamental Analysis of Price on Chinese Steel Products” in his paper considered five fundamental factors such as price index of steel product, Gross National Product, exchange rates, interest rates, imports and exports are influencing over the price of steel products. A hedonic function model was applied which reflects the relation between prices of varieties of heterogeneous goods and empirical tests applied by using Chinese annual data for the year 1978. Study found that the above said variables are influencing at 62 per cent over the steel price. The price index and Gross Domestic Product have positive significant relation which depicts that higher the price index and Gross Domestic Product, higher the steel price. The exchange rate have negative impact over the steel price, the interest rate does not have influence over the steel price and finally it is found that import and export influence the steel price of the product. 3. MEHMET SARAC (2007) “Does Fundamental Analysis Matter for Foreign Investors? An Empirical Analysis of Foreign Investment in the Istanbul Stock Exchange” The paper analyzed about the buy and sell decisions of foreign investors are related to financial indicators of the firms listed on the Istanbul Stock Exchange. Based on the monthly data from January 2000 to April 2006, the study found that the operating leverage, profitability and solvency are the most important factors while investing in the manufacturing stocks. Foreign investors consider solvency is a major factor whereas, local investors considers the profitability of a firm. 4. JEFFERY ABARBANELL AND BRAIN BUSHEE (1977) “Fundamental Analysis, Future Earnings and Stock Prices”, in their study examined the relationship between accounting based fundamental signals and future earnings of security prices. They applied multiple regression analysis to analyze the data. The study found that investors are not completely relying on the information given by the analyst. They also found that the variables such as Gross Domestic Product, inflation, firm School of Management Studies Vatakara, University of Calicut

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specific variables are prior earnings, expected earnings growth, relation between fundamental signal and future earnings, revisions and forecast errors are most influencing factors in fundamental analysis. 5. VIYYANNA RAO AND NIRMALA DAITA (2012) “Fundamental Factors Influencing Investments in Mutual Funds the EIC Approach: A Case Study of RCAMI” the study focused on fundamental analysis of mutual funds in India. The macro economic variables taken for this study, viz., RBI Bank Rate, Domestic savings, Gross Domestic Capital Formation, Money Supply, Gross National Product, Wholesale Price Index, and

Forex Reserves. Descriptive Statistics,

Correlation, Regression, Augmented Dickey Fuller test and Granger test has been applied. The economic analysis results found that all the variables were positively correlated with each other except bank rate and Wholesale price index. The industry analysis shows that Reliance, HDFC, ICICI Prudential, UTI and Birla Sun Life stood in the top five positions and its contribution as 57.02 per cent of the total assets. The remaining 33 players shared the rest of the 42.98 per cent of the industry. The company analysis results reveal that price earnings ratio and price to book ratio, fund size, market capitalization and Net assets value were found to be having a significant influence on the return of the funds.


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CHAPTER III

DATA ANALYSIS


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3.1. ECONOMY ANALYSIS


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4.8

6.8

7.4

5.1

6.9

7.3

Year

2013

2014

2015

6.4

10.9

9.3

Inflation (%)

6.75

8.00

7.25

Interest Rates (%)

Source: rbi.org.in, data.worldbank.org, and other internet sources

GNP (%)

GDP (%)

66.16

62.83

61.83

Exchange Rate (₹ / $)

Economy Analysis

Table 1

352365.7

319997.5

295503.6

Forex Reserve ($ Million)

2314849.00

2324512.97

2030378.25

Govt. Receipts (₹ Cr)

3152934.00

2647312.19

2332765.74

Govt. Expenditures (₹ Cr)


0

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INTERPRETATION The Table 1 represents the major economic indicators of our country which helps to the investors to make economic analysis towards investments. Gross Domestic Product indicates the rate of growth of the economy. The GDP of India during the period of 2013 to 2015 is increasing, which means the economy is growing. The highest growth rate of GDP is more favorable to the stock market. Gross National Product represents the aggregate value of goods and a service produced in a country which shows an increasing trend at the growth rate of 4.8% in 2013, 6.8% in 2014 and 7.4% in 2015, it represents the economic condition of a country which is going upward. During the year 2010 inflation rate shows as 10.9 per cent which was increased due to the shortfall of domestic production vis-à-vis demand and hardening of international prices, prices of primary commodities, especially rise in prices of food products. However, in 2015 the inflation rate is reduced to 6.4 per cent. The Interest rate is increased which helps to encourage the saving habit of an individual. Interest rates on deposits rate was highest in 2014 among the study period, it was 8 per cent. Interest rate suddenly downed to 6.75 in 2015.

The exchange rate indicates the stability of economic growth of a country. The exchange rate shows fluctuating trend from 61.83 to 66.16. It’s clearly shows that the value of rupee is decreasing when comparing to the US dollar. Foreign exchange reserve helps to preserve currency stability and reduce economic distresses. Foreign exchange reserve shows high trend during the period of 2013-15. The government expenditure exceeds over the receipts, the receipts and there is a small difference in between these two; in future it can be controllable due to effective money to develop our infrastructural activities economic policy. The government spent more because; once the infrastructure is developed it leads to potential economic growth.


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3.2. INDUSTRY ANALYSIS


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GROWTH OF FMCG INDUSTRY IN INDIA India’s FMCG sector reported steady sales Compound Annual Growth Rate of 11.2 per cent over the financial year 2000-11 on the back of strong annual volume growth of 8.5 per cent. Growth is being driven by increasing consumption led by a rise in incomes, changing lifestyles and favorable demographics. The industry is poised to grow at Compound Annual Growth Rate between 10 to 12 per cent annually. The annual profit of FMCG sector $14.74 billion. Total market size in excess of US $30 billion in the year 2011. The market growth rate of FMCG industry in rural and urban areas is 40 per cent and 25 per cent, respectively. Average Indian spending on groceries and personal care is 48 per cent. (Groceries 40 per cent and personal care 8 per cent). According to FICCI-Techno-park report, the implementation of the proposed GST and opening of FDI is expected to fuel growth of industry size to $47 billion (₹2,25,000 Crore) by 2013 and $95 billion (₹4,56,000 Crore) by 201814. The growth of the FMCG sector is presented in the Table 2 represents the total income, expenditure, sales and Profit earned after tax. Sales and Profit indicate the growth of the sector. FMCG industry shows that total income and sales has increased over the years except during the last year. The profit after tax is also showing an increasing trend which represents the industry has attained maximum profit during the study period. Hence, the FMCG sector has high potential growth; the investors have also attained a high rate of return on their investments.

SWOT ANALYSIS OF FMCG INDUSTRY  Strengths 1. Lower operational costs. 2. Existence of recognized distribution networks in both urban and rural areas. 3. Existence of eminent brands in FMCG sector. 4. Favorable Government policy and Foreign. 5. Direct Investment is permitted.  Weaknesses 1. Lower scope of investing in technology of small scale sectors. School of Management Studies Vatakara, University of Calicut

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2. Low export levels. 3. Illegal duplicate labels of the established brands of FMCG product reduced the scope in rural and semi-urban market.  Opportunities 1. Untapped rural market. 2. Increasing income levels which lead to increase in purchasing power of consumers. 3. Huge domestic market - a population of over one billion. 4. Export potential. 5. High consumer goods spending. 6. Lower price and smaller packs which increases the trading volume.  Threats 1. Removal of import restrictions resulting in replacing of domestic brands. 2. Slowdown in rural demand and mostly depends upon monsoon. 3. Tax and regulatory structure.


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3.3. COMPANY ANALYSIS


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Table 2

OPERATING PROFIT MARGIN (OPM) OF THREE COMPANIES Operating profit margin = EBIT / Revenue x 100 COMPANY

2013

2014

2015

HUL Ltd.

18.8

17.5

19.6

ITC Ltd.

34.6

36.8

36.9

MARICO Ltd.

11.9

14.6

14.2

Source: Profit & Loss statements of companies

Chart 1

OPERATING PROFIT MARGIN OF THREE COMPANIES 40

36.9

36.8 34.6

35 30 25 20

19.6

18.8

17.5 14.6

15

14.2

11.9

10 5 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. The profit of the Hindustan Unilever Ltd. after depreciation, but before the deduction of interest and tax is keeping a steady position between the ratio of 15.0 and 20.0. It’s at the highest position in 2015. It shows that the company have a tendency of profitability increment or to have the ability to keep a balanced state.  ITC Ltd. The above table and graphical presentation shows that the operating profit margin of the ITC Ltd. is very higher when comparing with other two companies. It is double than them in every year. In the period of study, company keeping its operating profit ratio above 30.00. In 2013 it is 34.6, in following year it’s increasing and reached at 36.9 in 2015.  Marico Ltd. When analyzing the operating profit margin of the Marico Ltd. it shows that the company reached at its highest operating profit in 2014. In 2015 it gained 14.2 of operating profit. It reveals that the company is on its way to achieve the shareholders objectives.


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Table 3

NET PROFIT MARGIN (NPM) OF THREE COMPANIES Net profit margin = Net profit / Revenue x 100 COMPANY

2013

2014

2015

HUL Ltd.

14.37

13.50

13.73

ITC Ltd.

24.05

25.58

25.25

MARICO Ltd.

8.54

10.23

9.90


Chart 2

NET PROFIT MARGIN OF THREE COMPANIES 30 25.58

25.25

24.05

25 20 15

14.37

13.73

13.5 10.23

10

9.9

8.54

5 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. The net profit margin of the Hindustan Unilever is remaining at constant position in the given period. The company keeping a good net profit margin in the given years. However it shows a slight decrease in 2014 from 14.37 to 13.5.  ITC Ltd. As the operating profit margin, also the net profit margin of the ITC Ltd. is highest among the studying companies. In 2013 it was 24.05. In the following years it’s keeping a balanced state around 25.00. It shows that the management’s profit earning efficiency is very higher.  Marico Ltd. In the case of Marico Ltd. the net profit margin indicates a fluctuating trend. The company has a sharp decline in the last year when compared to the previous year.


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Table 4

EARNING PER SHARE - EPS (BASIC) OF THREE COMPANIES Earnings per Share = Profit after Tax / No. of equity shares COMPANY 2013 2014

2015

HUL Ltd.

17.56

17.88

19.95

ITC Ltd.

9.45

11.09

12.05

MARICO Ltd.

6.18

7.53

8.89


Chart 3

EARNING PER SHARE - EPS (BASIC) OF THREE COMPANIES 25 20

19.95 17.88

17.56

15 12.05

11.09

10

9.45

8.89 7.53 6.18

5 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. In the shareholders point of view the profitability of the company is shows an increasing trend. Basic earnings per share of the Hindustan Unilever is increased from 17.56 to 19.95.  ITC Ltd. Basic earnings per share of the ITC Ltd. also increasing in year to year. If the EPS of a company is higher the market value of the share will also be higher in the stock market. The increasing trend of the EPS of ITC Ltd. is good to rise the demand for the share in the stock market.  Marico Ltd. When compared to the Earnings per share of the other companies it had a low EPS in the period. However, Marico also shows the increasing trend in their earning per share. It will be a hope to their shareholders.


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Table 5

EARNING PER SHARE - EPS (DILUTED) OF THREE COMPANIES Earnings per Share = Profit after Tax / No. of equity shares + Other Convertible Instruments COMPANY

2013

2014

2015

HUL Ltd.

17.55

17.87

19.94

ITC Ltd.

9.33

10.96

11.93

MARICO Ltd.

6.17

7.53

8.89


Chart 4

EARNING PER SHARE - EPS (DILUTED) OF THREE COMPANIES 25

20

19.94 17.87

17.55

15 11.93

10.96

10

9.33

8.89 7.53 6.17

5 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. When all convertible securities are exercised there is a slight change can be found in the earnings per share of the Hindustan Unilever Ltd. It’s only the 0.01in each year.  ITC Ltd. Diluted Earnings per share of the ITC Ltd. showing that the company have more convertible securities. There is a greater change when compared to other companies. The greater fluctuations in the basic and diluted EPS hint that the convertible securities will be more.  Marico Ltd. There is no fluctuations in the basic earnings per share of the Marico Ltd. in the recent two years. That’s means there was no convertible securities in the firm during the years. In the first year Marico had a slight different in the basic and diluted earnings per share of the company.


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Table 6

DIVIDEND PER SHARE (DPS) OF THREE COMPANIES Dividend per Share = Amount declared as dividend / No. of equity shares. COMPANY

2013

2014

2015

HUL Ltd.

18.50#

13.00

15.00

ITC Ltd.

5.25

6.00

6.25

MARICO Ltd.

1.00

4.00

2.50

Source: Annual Reports, http://moneycontrol.com # including special dividends

Chart 5

DIVIDEND PER SHARE (DPS) OF THREE COMPANIES 20

18.5

18 16

15

14

13

12 10 8

6

6.25

6

5.25

4

4

2.5

2

1

0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. The dividend paid to the equity shareholders of the Hindustan Unilever is very high when compared to other companies. It was at peak in 2013. In the 2014 it shows a tremendous decline in the dividend paid to the shareholders.  ITC Ltd. The above table and graph shows that the dividend per share of the ITC Ltd. is little increasing in all the years. When considering the all the three years we can say that the company is keeping a stable rate. Which is beneficial to the investors of the company.  Marico Ltd. In 2013 DPS of the company was very low. In the following years it shows a rapid increase in the dividend paid to the shareholders. But in the 2015 it again fallen.


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Table 7

DIVIDEND PAYOUT RATIO OF THREE COMPANIES Dividend Payout Ratio = DPS / EPS x 100 COMPANY

2013

2014

2015

HUL Ltd.

105.71

72.71

75.19

ITC Ltd.

55.55

54.10

51.87

MARICO Ltd.

16.18

53.12

28.12

Source: Profit & Loss statements of companies, Annual Reports

Chart 6

DIVIDEND PAYOUT RATIO OF THREE COMPANIES 120 105.71

100 80 60

75.19

72.71 55.55

54.1

53.12

51.87

40 28.12 16.18

20 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. In the year 2013 Hindustan Unilever Ltd. distributed greater proportion of earnings per share of the company to its investors. Above table and graph shows that after the 2013 it is rapidly declined. It’s not a good for the investors of the company.  ITC Ltd. ITC Ltd. was kept a stability in the distribution of dividend to its shareholders during this period. A stable DPR is favorable to the short term investors.  Marico Ltd. DPR of the Marico indicates a greater fluctuations in the amount dividend distributed to the shareholders during this period. This fluctuations is not good for the investors.


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Table 8

RETURN ON EQUITY (RoE) OF THREE COMPANIES Return on Equity = Net Income/Shareholders fund COMPANY

2013

2014

2015

HUL Ltd.

1.43

1.18

1.16

ITC Ltd.

0.33

0.33

0.31

MARICO Ltd.

0.20

0.36

0.31

Source: Profit & Loss statements of companies, Balance Sheet of Companies

Chart 7

RETURN ON EQUITY (RoI) OF THREE COMPANIES 1.6 1.43

1.4 1.18

1.2

1.16

1 0.8 0.6 0.4

0.33

0.33

0.36

0.31

0.31

0.2

0.2 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. From the perspective of equity shareholders HUL is more favorable to them. Because, the company have a higher return on equity in this period. In the year 2014 it was slightly changed. However it kept a stability in the following years.  ITC Ltd. A stable RoE is good for the shareholders. The ITC Ltd. offer a stable return on equity in these years. But it slightly declined in the last year.  Marico Ltd. The return on equity of Marico was faced a rapid growth in the 2014. But it was declined in the next year. This fluctuating RoE is not favorable to the shareholders.


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Table 9

EARNING YIELD RATIO OF THREE COMPANIES Earnings Yield Ratio = Earnings per share / Market price per share. COMPANY

2013

2014

2015

HUL Ltd.

0.0257

0.0218

0.0207

ITC Ltd.

0.0256

0.0284

0.0302

MARICO Ltd.

0.0258

0.0227

0.0193

Source: Profit & Loss statements of companies, http://nseindia.com, http://bseindia.com, http://monecontrol.com Note: Market prices of shares are highest in the year.

Chart 8

EARNING YIELD RATIO OF THREE COMPANIES 0.035 0.0302

0.03

0.0284 0.0257

0.0256

0.0258

0.025

0.0227

0.0218

0.0207

0.0193

0.02 0.015 0.01 0.005 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. Rate of return on the amount invested by the shareholders of HUL Ltd. is showing a declining trend. However, company kept a stability in the later years. So it can be challenge with other companies.  ITC Ltd. The above data shows that the Earning yield ratio of the ITC is very high in the period. In every year it’s increasing.  Marico Ltd. Earning yield ratio of the Marico is showing a declining trend. In 2013 Marico was highest among companies. But it was started falling in the following years.


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Table 10

PRICE TO BOOK VALUE RATIO (P/B Ratio) OF THREE COMPANIES Price to Book Ratio = Market price per share/Book value per share. COMPANY

2013

2014

2015

HUL Ltd.

55.17

54.09

21.11

ITC Ltd.

13.09

11.81

10.37

MARICO Ltd.

7.74

10.83

15.13

Source: Profit & Loss statement of companies, Balance sheet of the companies, money.rediff.com

Chart 9

PRICE TO BOOK VALUE RATIO (P/B Ratio) OF THREE COMPANIES 60

55.17

54.09

50

40 30 21.11

20

15.13

13.09

11.81

10.83

7.74

10

10.37

0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. The PB Ratio of the Hindustan Unilever is very high in the first two years. But it was suddenly fallen in the last year. This decline is favorable to the shareholders of the company. Because, shares which have lower PB Ratio may be considered as a ‘safer’ investment and vice versa.  ITC Ltd. When comparatively looking, ITC Ltd. kept a stable Price to book value ratio. However above table shows slight declines in the ratio year to year. This decline is good for the shareholders.  Marico Ltd. The above table and graph shows that PB Ratio of Marico Ltd. is increasing in every year. It was 7.74 in 2013 to 15.13 in 2015.


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Table 11

PRICE TO EARNING (P/E) RATIO OF THREE COMPANIES Price to Earnings ratio = Market Price per Share /Earnings per Share. COMPANY

2013

2014

2015

HUL Ltd.

38.87

45.83

48.30

ITC Ltd.

39.07

35.17

33.02

MARICO Ltd.

38.67

44.00

51.07


Chart 10

PRICE TO EARNING (P/E) RATIO OF THREE COMPANIES 60 51.07

50

40

48.3

45.83 38.87

39.07

44

38.67 35.17

33.02

30 20 10 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. The above table and graph shows that PE Ratio of the Hindustan Unilever Ltd. is increasing in the period. It indicates that the investors expecting an increased earnings from the firm.  ITC Ltd. Data showing a decreasing trend towards the price to earnings ratio of ITC Ltd. This trend is not favorable to the investors of the company. They expecting a higher PE ratio.  Marico Ltd. Marico shows a high performance in the PE Ratio. They were in last position among others in the first year. But in the last year Marico is at the first position. This trend is a good for the investors.


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Table 12

INTRINSIC VALUE OF THREE COMPANIES Intrinsic Value = Earnings per share x Price to Earnings ratio. COMPANY

2013

2014

2015

HUL Ltd.

682.56

819.44

963.59

ITC Ltd.

369.21

390.03

397.90

MARICO Ltd.

238.98

331.32

459.61


Chart 11

INTRINSIC VALUE OF THREE COMPANIES 1200 963.59

1000 819.44

800 682.56

600 459.61

400

397.9

390.03

369.21

331.32 238.98

200 0 2013

2014 HUL Ltd

ITC Ltd.


2015 Marico Ltd.

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INTERPRETATION  HUL Ltd. When considering all factors such as tangible and intangible factors, the value of the share of Hindustan Unilever is showing an increasing trend in the period. However the data shows that there is no large variations in the market price and intrinsic value of shares of HUL Ltd. However, the there is a slight increment in 2013 and 2015.  ITC Ltd. There is a slight change in the intrinsic value when comparing to the market price of the share of ITC Ltd. in 2015. The above table and chart shows a stable intrinsic value towards the share of the ITC Ltd. There was no effective growth in this period.  Marico Ltd. The intrinsic value of share of Marico Ltd. is lower than the market price of share in 2013. There is no difference between market price and intrinsic value in the following years.


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CHAPTER IV

FINDINGS, SUGGESTIONS AND CONCLUSION


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4.1. FINDINGS


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4.1. FINDINGS OF THE STUDY  ECONOMY ANALYSIS o Gross Domestic Product (GDP), Gross National Product (GNP), ForEx Reserves, and Government Receipts has a positive growth during the study period. Hence, the above said economic indicators are representing the economic growth of our country. So it’s favorable to the investors. o While excessive inflation and hyperinflation have negative economic consequences, inflation's negative consequences for the economy can be just as bad or worse. Consequently, policy makers since the end of the 20th century have attempted to keep inflation steady at 2% per year. But when analyzing the inflation rates of Indian economy it’s very higher than this standard. So it will adversely affect the FMCG industry also. o The appreciation of exchange rate makes exports more expensive and reduces the competitiveness of exporting firms. o The Government spends more money to the infrastructural activities. The infrastructure has played a major role in the present budget with a viewpoint that, once the infrastructure is developed, other sectors will automatically develop which leads to economic development of our country.


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 INDUSTRY ANALYSIS o The India’s FMCG sector reported a high growth during the study period. o The SWOT analysis discloses that the strength of FMCG sector in India is the low operating cost when compared to other countries. o Lower scope of investing in technology especially of small scale sectors is the major weakness of this sector. o The FMCG sectors have a great domestic market opportunity because of the huge population. o The major threats are tax and regulatory structure of our country.


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 COMPNAY ANALYSIS o HINDUSTAN UNILEVER LTD.  Profitability of the company is in a steady position during the study period.  EPS of the company is higher the market value of the share will also be higher in the stock market.  HUL Ltd. has paid average dividend per share of ₹ 15.5 per share, which are the highest dividend paying companies among the sample companies.  Distributed a greater proportion of earnings per share of the company to its investors.  Highest Return on Equity indicates the efficient utilization of funds by the owners of the firm.  The decline in the PB Ratio is favorable to the shareholders of the company. Because, shares which have lower PB Ratio may be considered as a ‘safer’ investment and vice versa.  There is a slight increment in the intrinsic value in the year 2013 and 2015. o ITC LTD.  Profitability of the company is high. ITC Ltd. is the highest profit earning company among the sample companies.  The increasing trend of the EPS of ITC Ltd. is good to rise the demand for the share in the stock market.  Stability of the dividend per share is beneficial to the investors.  The stable DPR of the company is favorable to the investors.  Earning yield ratio of the ITC is highest among the sample companies.  There was no difference between the market price and intrinsic value of share in 2013 and 2014, but it’s slightly increased in 2015


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o MARICO LTD.  Profitability ratios of Marico is very low during the study period. It shows the management’s inefficiency of profit earning.  DPS of the company was very low. So company’s share are not attractive to the investors.  The increasing PB Ratio is not good for safety of shares.  This period witnessed a tremendous growth in the PE Ratio of Marico Ltd. They were in last position among others in the first year. But in the last year Marico is at first. This growth is a good for the investors.  The intrinsic value is slightly lower than the market price of the share in 2013.


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4.2. SUGGESTIONS


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4.2. SUGGESTIONS o The Government could regulate inflation rate which creates the path to the economic development. Once the inflation rate is controlled the people have sufficient money and they have a chance to invest their money in the securities market. o The exchange rate of Rupee could control to increase the total export from the country. It will enrich the economy. o The Government should simplify the tax and regulations related with the FMCG sector. o The FMCG sector could improve the R&D department and implement new technology which helps to meet domestic as well as foreign competition. The government could provide tax concession for rural marketers. o Companies could try to increase the generation of profit for providing a better return to its shareholders. o DPS ratio of the companies shows that the dividend declared by the companies are decreasing in the recent years. So the companies could declare more dividends in their interim dividend declaration to attract more investors. o The DP Ratio shows the distribution of declared dividend is also diminishing. So the companies could increase the DPS for filling the gap between the DPS and EPS. o An investor should be aware about economic condition, market condition, Government policy and industrial policy, etc., they should analyze both internal as well as external factors before going to invest in particular securities. The prior analysis will help to the investor to minimize risk and maximize their return.

o Picking stocks with market prices below their intrinsic value can help in saving School of Management Studies Vatakara, University of Calicut

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money when building a portfolio. o The intrinsic value of HUL Ltd. is slightly higher than its market price in 2013 and 2015. So this project recommends a buy strategy. If the investor already has the shares they are advised to hold it and sell it in the future to earn profit.

o The intrinsic value of ITC Ltd. is showing a slight increment in 2015, Further the company also shows a steady growth rate. So the share is recommended for investment. o The intrinsic value of Marico Ltd. is slightly lower than the market price of share in a year, hence the Profitability ratios, DPS and PB ratio of the company is low in the study period there is no hope to increase the intrinsic value in the future. So the investor can either hold it for a shorter period and or sell it in the next market if he holds the share, if not it is not recommended for a buy.


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4.3. CONCLUSION


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4.3. CONCLUSION Fundamental analysis aims at finding the true worth of a security by analyzing macroeconomic, industry scenario and company financial position and so on. An investor can make safest as well as lucrative investment by analyzing the related variables and ensure for optimum return. Fundamental analysis suggests that no investor should buy or sell a share on the basis of the advices of market intermediaries or tips given by the stock dealers, websites, etc., the fundamental analysis calls upon the investor to make his buy or sell decisions based on the detailed analysis of the information available. This study focuses on fundamental analysis using various tools which help in trading strategies for risk reduction and maximization of return. The objective of the study is to conduct Fundamental analysis listed FMCG companies and the SWOT analysis for the FMCG industry. The study revealed that through economic analysis the Gross Domestic Product, Gross National Product, Interest rate, Foreign exchange reserves, Government Receipts and Expenditure has a positive growth rate during the study period. Hence, investors may consider these factors before going to make investment. From the industry analysis found that the India’s FMCG sector reported a high growth rate and its profit and sales also shows increasing trend during the study period. The SWOT analysis discloses that the strength of FMCG sector in India is the low operating cost, huge population is the opportunity, Lower scope of investing in technology especially of small scale sectors is the major weakness and major threats are tax and regulatory structure of our country. The company analysis done with the help of ratio analysis and intrinsic value method indicates that Hindustan Unilever Ltd. and ITC Ltd. are financially in satisfactory position during the study period. When analyzing profitability ratios of both companies ITC is earning more profits. However, HUL Ltd. offering more return on investment to their shareholders.


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ANNEXURE


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HINDUSTAN UNILIVER LIMITED Consolidated Profit and Loss Statement (All amounts in ₹ Cr., unless otherwise stated)

Particulars Revenue From Operation (Gross) Less: Excise duty Revenue from operations (net) Other income TOTAL REVENUE EXPENSES Cost of materials consumed Purchase of stock-in-trade Changes in inventories of finished goods s c (including stock-in-trade) and work-inprogress Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses TOTAL EXPENSES Profit before exceptional items and tax Exceptional items Profit before tax Tax expense Current tax Deferred tax Tax adjustments of prior years (net) PROFIT FOR THE YEAR Earnings per equity share Basic (Face value of ₹ 1.00 each) Diluted (Face value of ₹ 1.00 each)


2015 32721.44 (1915.82) 30805.62 618.39 31424.01

2014 29557.90 (1538.77) 28019.13 621.03 28640.16

2013 27283.59 (1473.38) 25810.21 606.90 26417.11

11867.31 3697.96 58.28

11159.81 3350.19 (166.38)

10284.66 3235.31 (31.13)

1578.89 16.82 286.69 8394.94 25900.89

1435.95 36.03 260.55 7764.30 23840.45

1318.34 25.15 236.02 6999.28 22067.63

5523.12

4799.71

4349.48

664.30 6187.42

228.68 5028.39

608.40 4957.40

(1902.33) 30.17 4315.26

(1117.84) (24.83) 157.08 3867.49

(1167.59) (9.45) 15.83 3796.69

19.95 19.94

17.88 17.87

17.56 17.55

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ITC LIMITED Consolidated Profit and Loss Statement (All amounts in ₹ Cr., unless otherwise stated)

Particulars GROSS INCOME

2015 51932.14

2014 2013 48175.80 43044.21

Gross Revenue from sale of products & services Less: Excise duty Net Revenue from sale of products & services Other operating revenue Revenue from operations Other income TOTAL REVENUE

49964.82 13881.61 36083.21 424.19 36507.40 1543.13 38050.53

46712.62 41809.82 13830.06 12204.24 32882.56 29605.58 356.04 295.69 33238.60 29901.70 1107.14 938.70 34345.74 30839.97

10987.83 3898.66 (214.53)

10263.28 3021.47 (128.41)

8936.21 3375.92 (246.35)

1780.04 57.42 961.74 6581.85 24053.01

1608.37 2.95 899.92 6019.05 21686.63

1387.01 86.47 795.56 5820.97 20155.79

13997.52

12659.11

10684.18

4020.99 368.80 9607.73

3791.13 82.77 8785.21

2934.79 331.00 7418.39

₹ 12.05 ₹ 11.93

₹ 11.09 ₹ 10.96

₹ 9.45 ₹ 9.33

EXPENSES Cost of materials consumed Purchase of stock-in-trade Changes in inventories of finished goods, workin-v progress, stock-in-trade and intermediates Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses TOTAL EXPENSES Profit before tax Tax expense Current tax Deferred tax PROFIT FOR THE YEAR Earnings per equity share (Face value of ₹ 1.00 each)

Basic Diluted


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MARICO LIMITED

0

Consolidated Profit and Loss Statement

(All amounts in ₹ Cr. unless otherwise stated)

Particulars Revenue From Operation (Gross) Less: Excise duty Revenue from operations (net) Other income TOTAL REVENUE EXPENSES Cost of materials consumed Purchase of stock-in-trade Changes in inventories of finished goods, work-inprogress, stock-in-trade and intermediates Employee benefits expenses Finance costs Depreciation and amortization expenses Other expenses TOTAL EXPENSES Profit before exceptional items and tax Exceptional itemsProfit before tax Consist of : Discontinuing operations Continuing operations Tax expense Current tax Less: MAT credit (entitlement)/utilization Net current tax Deferred tax Profit after tax and before Minority interest Consist of : Discontinuing operations Continuing operations Less: Minority interest PROFIT FOR THE YEAR Earnings per equity share(Nominal value per share ₹ 1.00 each)

Basic Diluted School of Management Studies Vatakara, University of Calicut

2015 5741.23 8.25 5732.98 58.89 5791.87

2014 4693.21 6.69 4686.52 58.20 4744.72

2013 4598.98 2.80 4596.18 37.53 4633.71

3118.88 109.69 (109.53)

2242.48 111.47 45.21

2220.79 116.60 (127.46)

325.14 22.95 84.34 1418.75 4970.22

285.01 34.45 76.86 1254.66 4050.14

370.29 58.02 86.62 1390.18 4115.04

821.65 821.65

694.58 694.58

518.67 33.21 551.88

821.65 821.65

694.58 694.58

(34.12) 586.00 551.88

203.47 34.78 238.25 (1.48) 236.77 548.88

201.94 (22.65) 179.29 11.19 190.48 504.10

131.87 (13.31) 118.56 27.63 146.19 405.69

584.88 584.88 (11.43) 573.45

504.10 504.10 (18.72) 485.38

(38.04) 443.73 405.69 (9.83) 395.86

₹ 8.89 ₹ 8.89

₹ 7.53 ₹ 7.53

₹ 6.18 ₹ 6.17

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HINDUSTAN UNILIVER LIMITED Consolidated Balance Sheet (All amounts in ₹ Cr., unless otherwise stated)

Particulars EQUITY AND LIABILITIES Shareholder’s Fund Share Capital Reserves and Surplus

March 2015 March 2014 March 2013

Non-Current Liabilities Other long-term liabilities Long-term provisions Current Liabilities Trade payable Other current liabilities Short-term provisions TOTAL ASSETS Non-Current Assets Fixed assets Tangible assets Intangible assets Capital work-in-progress Intangible assets under development Non-current investments Differed tax assets (net) Long-term loans and advances Other non-current assets Current Assets Current investments Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets TOTAL


216.35 3508.43 3724.78

216.27 3060.78 3277.05

216.25 2457.77 2674.02

170.11 956.35 1126.46

278.82 923.99 1202.81

476.25 706.34 1182.59

5288.90 908.05 2585.87 8782.82 13634.06

5623.84 911.33 1983.37 8518.54 12998.40

5167.69 616.15 1872.02 7655.86 11512.47

2435.50 22.03 479.01 2936.54 654.11 195.96 583.46 0.44 1433.97

2397.94 24.12 312.08 7.70 2741.84 636.17 161.73 605.51 0.68 1404.09

2256.79 36.11 205.32 10.32 2508.54 548.03 204.78 384.29 296.84 1433.94

2623.82 2602.68 782.94 2537.56 657.27 59.28 9263.55 13634.06

2457.95 2747.53 816.43 2220.97 528.78 80.81 8852.47 12998.40

1782.63 2526.99 833.48 1707.89 648.26 70.74 7569.99 11512.47

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ITC LIMITED Consolidated Balance Sheet (All amounts in ₹ Cr., unless otherwise stated)



Non-Current Liabilities Long-term borrowings Differed tax liabilities(net) Other long-term liabilities Long-term provisions Current Liabilities Short-term borrowings Trade payables Other current liabilities Short-term provisions TOTAL ASSETS Non-Current Assets Fixed assets Tangible assets Intangible assets Capital work-in-progress-Tangible assets Intangible assets under development Non-current investments Long-term loans and advances Current Assets Current investments Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets TOTAL School of Management Studies Vatakara, University of Calicut

801.55 29934.14 30735.69

795.32 25466.70 26262.02

790.18 21497.67 22287.85

38.69 1631.60 7.05 100.72 1778.06

51.00 1296.96 5.09 110.00 1463.05

66.40 1203.72 3.11 125.62 1398.85

0.02 1904.62 3671.18 6106.09 11681.91 44195.66

0.14 1987.59 3631.88 5884.71 11504.32 39229.39

1688.98 3528.62 5133.13 10330.73 34017.43

13777.14 401.35

11948.69 64.05

11118.55 90.79

2085.49

2272.94

1472.80

28.65 16292.63 2441.64 1506.36 20240.63

22.79 14308.47 2512.17 1480.02 18300.66

14.99 12697.13 2000.86 1727.97 16425.96

5963.82 7836.76 1722.40 7588.61 549.89 293.55 23955.03 44195.66

6311.26 7359.54 2165.36 3289.37 783.51 1019.69 20928.73 39229.29

5059.43 6600.20 1163.34 3615.00 512.14 641.36 17591.47 34017.43 P a g e | 91


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MARICO LIMITED Consolidated Balance Sheet (All amounts in ₹ Cr., unless otherwise stated)



Minority Interest Non-Current Liabilities Long-term borrowings Differed tax liabilities(net) Other long-term liabilities Long-term provisions Current Liabilities Short-term borrowings Trade payables Other current liabilities Short-term provisions TOTAL ASSETS Non-Current Assets Fixed assets Tangible assets Intangible assets Capital work-in-progress Goodwill on consolidation Non-current investments Long-term loans and advances Other non-current assets Current Assets Current investments Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets TOTAL School of Management Studies Vatakara, University of Calicut

64.50 1760.28 1824.78 13.65

64.49 1296.14 1360.63 35.79

64.48 1917.02 1981.50 35.14

168.74 7.88 8.65 185.27

251.54 9.62 0.01 3.31 264.48

432.63 5.79 0.98 10.47 449.87

165.43 564.32 276.53 95.30 1101.58 3125.28

274.35 502.52 444.81 82.37 1304.05 2964.95

358.08 478.74 293.63 110.54 1240.72 3707.23

556.67 30.10 3.04 589.81 489.15 45.75 50.63 120.77 1296.11

594.90 38.46 4.39 637.75 254.25 49.86 60.93 155.03 1157.82

461.18 813.58 147.68 1422.44 395.52 38.03 119.39 142.62 2118.00

238.05 994.71 176.75 204.94 179.13 35.59 1829.17 3125.28

260.67 796.24 223.19 406.40 86.47 34.16 1807.13 2964.95

113.60 862.69 196.55 266.75 136.08 13.56 1589.23 3707.23 P a g e | 92


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BIBLIOGRAPHY


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REFERENCE BOOKS Yogesh Maheswari, “Investment Management”, PHI Learning Pvt. Ltd., New Delhi, 2008 Jeffery S. Abarbanell and Brain J. Bushee “Fundamental Analysis, Future Earnings and Stock Prices”, Journal of Accounting Research, 1977 Sandip Mukherji, Manjeet and Kim, “A Fundamental Analysis of Korean Stock Returns”, Financial Analyst Journal, 1997 Jiang Xia “Fundamental Analysis of Price on Chinese Steel Products”, Doctoral Dissertation submitted to West Virginia University, Financial Analyst Journal, 2000 Mehmet Sarac, “Does Fundamental Analysis Matter for Foreign Investors? An Empirical Analysis of Foreign Investment in the Istanbul Stock Exchange”, Journal of Economic and Social Research, 2007 Viyyanna Rao and Nirmala Daita, “Fundamental Factors Influencing Investments in Mutual Funds the EIC Approach: A Case Study of RCAMI” Indian Journal of finance, 2012

WEBLIOGRAPHY http://motilaloswal.com

http://statisticstimes.com

http://data.worldbank.org

http://www.global-rates.com

https://www.rbi.org.in

http://www.nseindia.com

http://www.investopedia.com

http://www.bseindia.com

http://money.rediff.com

http://www.wikipedia.com

http://www.moneycontrol.com

http://info.shine.com

http://finmin.nic.in


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A fundamental Analysis on Three Indian FMCG Companies

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