Indian cosmetic industry

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The Indian Cosmetics Industry is defined as skin care, hair care, color cosmetics, fragrances and oral care segments which stood at an estimated $2.5 billion in 2008 and is expected to grow at 7%, according to an analysis of the sector. Today herbal cosmetics industry is driving growth in the beauty business in India and is expected to grow at a rate of 7% as more people shun chemical products in favor of organic ones.

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Indian cosmetic industry

  1. 1. MARKETING MANAGEMENT PROWESS ASSIGNMENT INDIAN COSMETIC INDUSTRY BELLI P K S2 MBA 04/02/2013
  2. 2. Table of Contents Brief introduction .................................................................................................................................... 3 Market capitalization ........................................................................................................................... 4 Size of the industry .............................................................................................................................. 4 Domestic and Export Share .................................................................................................................. 4 Top leading Companies ........................................................................................................................... 5 Latest developments .............................................................................................................................. 6 Industry Analysis .................................................................................................................................... 7 Major players ....................................................................................................................................... 14 Emami Ltd ........................................................................................................................................ 14 Executive summary ........................................................................................................................ 15 Distribution of costs ....................................................................................................................... 17 Source of growth in profits ............................................................................................................ 18 Colgate Palmolive Ltd ........................................................................................................................ 19 Major competitors ......................................................................................................................... 20 Milestone ...................................................................................................................................... 21 Executive summary ........................................................................................................................ 22 Distribution of costs ....................................................................................................................... 24 Lakme................................................................................................................................................ 25 Executive summary ........................................................................................................................ 25 Distribution of costs ....................................................................................................................... 26 Source of growth in profits ............................................................................................................ 27 Ponds ................................................................................................................................................ 28 Executive summary ........................................................................................................................ 29 Distribution of costs ....................................................................................................................... 30 Source of growth in profits ............................................................................................................ 31 Procter & Gamble .............................................................................................................................. 32 Executive summary ........................................................................................................................ 34 Distribution of costs ....................................................................................................................... 35 Sources of growth in profits ........................................................................................................... 36 Summary .............................................................................................................................................. 38
  3. 3. Brief introduction The Indian Cosmetics Industry is defined as skin care, hair care, color cosmetics, fragrances and oral care segments which stood at an estimated $2.5 billion in 2008 and is expected to grow at 7%, according to an analysis of the sector. Today herbal cosmetics industry is driving growth in the beauty business in India and is expected to grow at a rate of 7% as more people shun chemical products in favor of organic ones. The emphasis of the herbal cosmetic has been on the spectacular growth of the herbal and ayurvedic beauty products business as conveyed by beauty expert Shahnaz Husain who was the first to introduce the concept of ayurvedic cosmetics to the world when she launched her products way back in 1970. Today, the Indian cosmetics industry has a plethora of herbal cosmetic brands like Forest Essentials, Biotique, Himalaya, Blossom Kochhar, VLCC, Dabur and Lotus and many more. The Indian cosmetics industry has emerged as one of the unique industries holding huge potential for further growth. In 2009, the cosmetics industry registered sales of INR 356.6 Billion (US$ 7.1 Billion) despite the global economic recession. Indian cosmetics Industry has mainly been driven by improved purchasing power and rising fashion consciousness of the Indian population and industry players spending readily on the promotional activities to increase consumer awareness and develop their products. According to a new research report, the Indian Cosmetics Industry is expected to witness impressive growth rate in the near future owing to rising beauty concern of both men and women. Today the industry holds promising growth prospects for both existing and new players. The baseline is that there has been a rise in variety of products offered by the industry players in the country. The companies have started going for rural expansion and are offering specialized products to generate revenues from all the corners of the country. Improvement and strengthening of the Indian economy in the coming years will also pave the way for the Indian cosmetics market over the forecast period and develop the Cosmetic Industry. The Indian Cosmetic market which traditionally a stronghold of a few major Indian players like Lakme, and Ponds has seen a lot of foreign entrants to the market within the last decade. India is
  4. 4. a very price sensitive market and the cosmetics and personal care product companies, especially the new entrants have had to work out new innovative strategies to suit Indian preferences and budgets to establish a hold on the market and establish a niche market for them. Market capitalization According to analysis and figures given by the Confederation of Indian Industries (CII), the total Indian beauty and cosmetic market size currently stands at US$950 million and showing growth between 15-20% per annum. The overall beauty and wellness market that includes beauty services stands at about US$2,680 million, according to CII estimates. Size of the industry The size of Indian Cosmetics Industry globally is $ 274 billion, while that of the Indian cosmetic industry is $ 4.6 billion. The current size of the Indian Cosmetic Industry is approx US$ 600 million. Among these fastest growing segment is color cosmetics, accounting for around US$ 60 million of the market. Industry sources estimate a rapid growth rate of 20% per annum across different segments of the cosmetics industry reflecting with an increasing demand for all kinds of beauty and personal care product. Growth in the Indian Cosmetic Industry has come mainly from the low and medium-priced categories that account for 90 % of the cosmetics market in terms of volume. Domestic and Export Share Costs for importing other products are much higher than producing it in the country. India usually allows the entry of imported cosmetics without any restrictions but the average import tariff on cosmetics products is currently very high at 39.2%.
  5. 5. Top leading Companies  Lakmé is the Indian brand of cosmetics, owned by Unilever. It started as a 100% subsidiary of Tata Oil Mills (Tomco), part of the Tata Group; it is named after the French opera Lakmé, which itself is the French form of Lakshmi, the goddess of wealth who has is also renowned for her beauty.  Colgate Palmolive India Ltd., a subsidiary of Colgate Palmolive Company, USA was incorporated in 1937. It is a bluechip company engaged in the FMCG business.  Emami Limited is an Indian producer of fast moving consumer goods (FMCG), such as cosmetics and health and baby products. The company is based in Kolkata.  Pond's Cream is a brand of beauty and health care products that is produced by the Ponds Institute which is owned by the multinational company Unilever.  Procter & Gamble (P&G) is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods.  Revlon is an American cosmetic for skin care, fragrance, and Personal Care Company founded in 1932.  Oriflame Cosmetics S.A. (Luxembourg) is a cosmetics group, founded in 1967 in Sweden by the brothers Jonas AF Jochnick and Robert AF Jochnick.  The L’Oréal Group is the world’s largest cosmetics and Beauty Company. It concentrates on hair colour, skin care, sun protection, make-up, perfumes and hair care. Maybelline is a makeup brand sold worldwide and owned by L’Oréal.  Chambor cosmetic line is a blend of the finest traditions in terms of radiant color, soft texture and skin accentuator.  Avon Products, Inc. is a US cosmetics, perfume and toy seller with markets in over 140 countries across the world.  Make-up Art Cosmetics or MAC Cosmetics, is a manufacturer of cosmetics which was founded in Toronto, Canada by Frank Toskan and Frank Angelo in 1984  ColorBar cosmetics are one of the leading brands of color cosmetics in India.
  6. 6.  Street Wear is a young, funky and hip brand which globally is positioned at the young and trendy shopper and the range consists of about 30 SKUs covering categories like nail enamel, lipsticks, lip gloss, face make-up kits and eye shadows. Latest developments  According to Indian Cosmetic Sector Analysis (2009-2012), the Indian cosmetics industry is expected to witness fast growth rate in the coming years on the back of an increase in the consumption of beauty products. Owing to growing disposable income of the middle class households and changing lifestyle.  A study even shows that affordability and rising consumer base were the main drivers behind the high cosmetic sales of around INR 356.6 Billion (US$ 7.1 Billion) in 2009. Market players are getting lucrative and good opportunities as people have become more beauty conscious due to changing lifestyle and spreading consumer awareness.  According to ASSOCHAM the size of India's cosmetics market will rise by almost a half to 1.4 billion dollars in the next two-three years as people get fashion conscious and more brands are launched. With increased awakening about cosmetics brands, which is evident even in rural India, the industry size will grow to around 1.4 billion dollars from current level of 950 million. It is projected to grow at a CAGR of around 7% during the forecast period.  Indian Cosmetics Industry is set for a significant growth depending on the capability of the manufacturers to market their products. Products that claim to renew cells, minimize pores, and restore hydration have created an $83 billion worldwide market.  Due to the optimistic assessment the domestic cosmetic and toiletries industry show that with increased awakening which is growing even in rural India, its size will grow in next 2-3 years to around US$ 1400 million from current level of US$ 950 million. Till then India’s per capita consumption of cosmetic and toiletries products could be on par with that of China which currently is US$ 1.5, says ASSOCHAM analysis.
  7. 7. Industry Analysis The size of Indian Cosmetics Industry globally is $ 274 billion, while that of the Indian cosmetic industry is $ 4.6 billion. According to analysis and figures given by the Confederation of Indian Industries (CII), the total Indian beauty and cosmetic market size currently stands at US$950 million and showing growth between 15-20% per annum. Industry sources estimate a rapid growth rate of 20% per annum. The overall beauty and wellness market that includes beauty services stands at about US$2,680 million, according to CII estimates. The cosmetics companies in India is listed below 1. A V T Natural Products Ltd. 2. Absolute Aromatics Ltd. 3. Ador Multiproducts Ltd. 4. Ajanta India Ltd. 5. Ajay Home Products Ltd. 6. Allied Perfumers Pvt. Ltd. 7. Amar Remedies Ltd. 8. Associated Biscuit Co. Ltd. 9. Bajaj Corp Ltd. 10. Basil Chemicals & Additives Ltd. 11. C C Health Care Products Pvt. Ltd. [Merged] 12. Coimbatore Flavors & Fragrances Ltd. 13. Colgate-Palmolive (India) Ltd. 14. Dongguan Unza Consumer Products Ltd. 15. Emami Ltd. 16. Floral Aroma Ltd. 17. Galaxy Surfactants Ltd. 18. Henkel India Ltd. 19. Hindustan Polyamides & Fibres Ltd. 20. Hindustan Unilever Ltd. 21. Hipolin Ltd. 22. Indfrag Ltd. 23. J H S Svendgaard Dental Care Ltd. 24. J H S Svendgaard Hygiene Products Ltd. 25. J H S Svendgaard Laboratories Ltd. 26. Jyothy Laboratories Ltd. 27. Kamakhya Cosmetics & Pharmaceuticals Pvt. Ltd. 28. Kancor Ingredients Ltd. 29. Karnataka Soaps & Detergents Ltd.
  8. 8. 30. Kaya Ltd. 31. Kukar Sons (Indo-French) Exports Ltd. 32. Lakme Lever Pvt. Ltd. 33. Naturite Agro Products Ltd. 34. Nirma Ltd. 35. Novo Agritech Ltd. 36. Oriental Aromatics Ltd. 37. Paramount Minerals & Chemicals Ltd. 38. Parikh Herbals Ltd. 39. Pee Cee Cosma Sope Ltd. 40. Power Soaps Ltd. 41. Privi Organics Ltd. 42. Procter & Gamble Home Products Ltd. 43. Procter & Gamble Hygiene & Health Care Ltd. 44. R K S Agrotech Ltd. 45. Reckitt Benckiser (India) Ltd. 46. Rhodia Specialty Chemicals India Ltd. 47. Sharp Menthol India Ltd. 48. Shingar Ltd. 49. Shree Cosmetics Ltd. 50. Shreeji Dye-Chem Ltd. 51. Sivalik Cellulose Ltd. 52. Sonal Cosmetics (Exports) Ltd. 53. Standard Surfactants Ltd. 54. Sunehari Exports Ltd. 55. Surya Vinayak Inds. Ltd. 56. Synthite Industries Ltd. 57. Tamilnadu Forest Plantation Corpn. Ltd. 58. Ultra International Ltd. 59. Unza International Ltd. 60. Unzafrica Ltd. 61. Utkal Soap Products Ltd. The executive summary of the cosmetic industry is shown below. Growth in Executive Summary (%) Cosmetics, Toiletries, Soaps & Detergents Currency: Rs. Million (Annualized) Total income Sales Income from financial services Mar-09 Mar-10 Mar-11 19 20.2 -12.6 12.1 11.9 27.5 11.6 11.8 9.7
  9. 9. Total expenses Raw materials, stores & spares Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. Interest paid Depreciation -8.1 -6.1 -11.8 -8.7 12.7 19.1 10 9.7 4.3 20.9 -2.9 100.6 15.5 2.2 10.4 14.3 19.9 10.5 20.7 16 -37.8 34.3 11.1 15.9 12.7 12.4 89.6 11.4 4.2 13.5 10 0.5 19.2 14.7 9 6.8 69 No of companies 28.5 27.7 24.8 23.4 0.4 17.7 72.1 9.7 11.4 Total assets Net fixed assets Investments Current assets Loans & advances Gross fixed assets 15 15.8 21.5 -1.6 29.4 21.2 45.6 31.7 -4.6 12.7 20.7 16.3 Total liabilities Net worth Paid up equity capital (net of forfeited equity cap.) Reserves and funds Borrowings Fixed deposits Current liabilities & provisions 11.2 5.5 0.8 17.8 -26.5 18.9 1,337.20 32.8 5.3 36.2 8.1 13 2.1 8.7 Profits PBDITA (Operating profit) PBDITA net of P&E Profit after tax (PAT) PAT net of P&E 21.5 26.5 30.4 23.5 5.8 22.5 -10.8 32.3 62 15.1 75 61 The executive summary of different companies in the concerned year is shown below. Executive Summary Cosmetics, Toiletries, Soaps & Detergents Currency: Rs. Million (Non-Annualised) Year Total Total Profit Net
  10. 10. income A V T Natural Products Ltd. Absolute Aromatics Ltd. Ador Multiproducts Ltd. Ajanta India Ltd. Ajay Home Products Ltd. Allied Perfumers Pvt. Ltd. Amar Remedies Ltd. Associated Biscuit Co. Ltd. Bajaj Corp Ltd. Basil Chemicals & Additives Ltd. C C Health Care Products Pvt. Ltd. [Merged] Coimbatore Flavors & Fragrances Ltd. Colgate-Palmolive (India) Ltd. Dongguan Unza Consumer Products Ltd. Emami Ltd. Floral Aroma Ltd. Galaxy Surfactants Ltd. Henkel India Ltd. Hindustan Polyamides & Fibres Ltd. Hindustan Unilever Ltd. Hipolin Ltd. Mar11 1394 Mar10 Mar11 119.6 Mar10 484.5 Mar10 2.8 Mar10 2920.1 Jun11 5790.3 Mar10 90.9 Mar11 3769.8 Mar10 Mar10 366.7 Mar10 1.7 Mar11 24242 Mar10 985.2 Mar11 12779.3 Mar10 1.5 Mar11 9063.5 Dec10 4731.1 Mar10 2665.7 Mar11 211355.3 Mar11 321.3 expenses 1226.5 after tax (PAT) worth 108.1 557.9 0 -278.7 117.7 2.2 48.7 484.7 -62.7 35 3.6 -0.8 26.4 4042.1 95.5 527.8 5469.6 380.5 2124.7 77.6 13.3 65.7 2945.9 841 3762.7 0.6 -0.6 51.7 306.5 60.6 56.6 3.1 -1.4 8.8 20516.8 4025.8 3840.5 978.4 6.8 136.7 11836 1254 6830.2 1.5 0 9 8766.6 615.2 2024.7 4701.1 11.3 1435.5 2521.1 200.5 1000.5 191246.4 319.8 23059.7 26332.5 -5.2 94
  11. 11. Indfrag Ltd. J H S Svendgaard Dental Care Ltd. J H S Svendgaard Hygiene Products Ltd. J H S Svendgaard Laboratories Ltd. Jyothy Laboratories Ltd. Kamakhya Cosmetics & Pharmaceuticals Pvt. Ltd. Kancor Ingredients Ltd. Karnataka Soaps & Detergents Ltd. Kaya Ltd. Kukar Sons (Indo-French) Exports Ltd. Lakme Lever Pvt. Ltd. Naturite Agro Products Ltd. Nirma Ltd. Novo Agritech Ltd. Oriental Aromatics Ltd. Paramount Minerals & Chemicals Ltd. Parikh Herbals Ltd. Pee Cee Cosma Sope Ltd. Power Soaps Ltd. Privi Organics Ltd. Procter & Gamble Home Products Ltd. Procter & Gamble Hygiene & Health Care Ltd. R K S Agrotech Ltd. Reckitt Benckiser (India) Ltd. Mar11 Mar11 Mar10 Mar11 Mar11 Dec10 Mar10 Mar11 Mar11 Mar10 Mar11 Mar10 Mar11 Mar10 Mar10 Mar10 Mar11 Mar11 Mar10 Mar11 Mar11 Jun11 Mar10 Dec- 383.5 371 49.2 303.5 2.9 3.5 -0.6 -2.2 12.7 12.4 0.3 110.8 873.4 830.5 60.1 761.8 6934.4 6082.4 802.7 6527.2 210.4 144.5 4.2 55.1 1996.3 1879.1 79.1 226.8 2004.6 1913.3 66.6 709.7 1103.6 1523.5 -412.6 -416.4 1.6 -1.6 12.2 308.8 464.9 -132 -28.1 2.2 6.3 -0.1 -8 35593.1 35185.5 48.9 14.5 32 42.9 671.1 616 65.8 1012.8 796.9 752 36.6 135.8 5.6 5.5 0.2 88.9 297.1 296.9 -1.1 110.5 2175.6 2107.9 106.3 352.5 3875.5 3625 231.3 1003.4 29331.6 33243.7 -3335.8 3186 11226.3 9724 1508.8 6006.2 0.1 22315 49.8 19431.7 -49.7 3385.7 54.5 1700.6 740.4 28319.7
  12. 12. Rhodia Specialty Chemicals India Ltd. Sharp Menthol India Ltd. Shingar Ltd. Shree Cosmetics Ltd. Shreeji Dye-Chem Ltd. Sivalik Cellulose Ltd. Sonal Cosmetics (Exports) Ltd. Standard Surfactants Ltd. Sunehari Exports Ltd. Surya Vinayak Inds. Ltd. Synthite Industries Ltd. Tamilnadu Forest Plantation Corpn. Ltd. Ultra International Ltd. Unza International Ltd. Unzafrica Ltd. Utkal Soap Products Ltd. 10 Dec10 Mar10 Mar10 Mar11 Mar11 Mar10 Mar11 Mar11 Mar10 Mar10 Mar10 Mar10 Mar10 Mar10 Mar10 Mar10 1809.9 1905 -36.9 445.4 8652.5 8722.5 260 2389.9 437.3 441.2 5.3 156.4 16 35 -18.5 21.5 3 -3 28.2 5 -5 4.3 0.2 0.2 0 198.5 557.8 567.2 1 136.3 183.9 182.3 -6.6 292.5 43295.3 47761.3 1198.1 3825.6 4495.1 4198.4 367.3 4041.3 522.7 433.8 86.1 734.7 325.3 274.3 17.5 74.3 350.4 93 257.4 1237.2 4.5 3.4 1.4 2 5.3 Operating expenses and compensation to employees by different companies is shown below. Distribution of Costs (%) Cosmetics, Toiletries, Soaps & Detergents Currency: Rs. Million (Non-Annualised) A V T Natural Products Ltd. Year Mar-11 Operating expenses Compensation to employees 88.63 11.3
  13. 13. Absolute Aromatics Ltd. Ador Multiproducts Ltd. Ajanta India Ltd. Ajay Home Products Ltd. Allied Perfumers Pvt. Ltd. Amar Remedies Ltd. Associated Biscuit Co. Ltd. Bajaj Corp Ltd. Basil Chemicals & Additives Ltd. C C Health Care Products Pvt. Ltd. [Merged] Coimbatore Flavors & Fragrances Ltd. Colgate-Palmolive (India) Ltd. Dongguan Unza Consumer Products Ltd. Emami Ltd. Floral Aroma Ltd. Galaxy Surfactants Ltd. Henkel India Ltd. Hindustan Polyamides & Fibres Ltd. Hindustan Unilever Ltd. Hipolin Ltd. Indfrag Ltd. J H S Svendgaard Dental Care Ltd. J H S Svendgaard Hygiene Products Ltd. J H S Svendgaard Laboratories Ltd. Jyothy Laboratories Ltd. Kamakhya Cosmetics & Pharmaceuticals Pvt. Ltd. Kancor Ingredients Ltd. Karnataka Soaps & Detergents Ltd. Kaya Ltd. Kukar Sons (Indo-French) Exports Ltd. Lakme Lever Pvt. Ltd. Naturite Agro Products Ltd. Nirma Ltd. Novo Agritech Ltd. Oriental Aromatics Ltd. Paramount Minerals & Chemicals Ltd. Parikh Herbals Ltd. Pee Cee Cosma Sope Ltd. Power Soaps Ltd. Privi Organics Ltd. Procter & Gamble Home Products Ltd. Mar-10 Mar-11 Mar-10 Mar-10 Mar-10 Jun-11 Mar-10 Mar-11 Mar-10 Mar-10 Mar-10 Mar-11 Mar-10 Mar-11 Mar-10 Mar-11 Dec-10 Mar-10 Mar-11 Mar-11 Mar-11 Mar-11 Mar-10 Mar-11 Mar-11 0 97.79 82.67 8.33 97 91.36 74.61 85.79 100 84.7 74.19 92.66 97.82 85.29 53.33 93.53 95.06 87.49 95.68 97.81 92.94 102.86 60.48 84.85 95.42 0 8.86 13.95 0 0.21 2.61 26.08 6.43 50 8.67 17.39 10.16 11.88 6.54 12.5 4.37 3.79 4.33 5.26 5.15 9.31 55.56 24 5.01 12.69 Dec-10 Mar-10 Mar-11 Mar-11 Mar-10 Mar-11 Mar-10 Mar-11 Mar-10 Mar-10 Mar-10 Mar-11 Mar-11 Mar-10 Mar-11 Mar-11 85.12 90.76 97.49 81.69 0 94.77 76.19 88.54 278.62 94.61 91.82 98.18 97.64 95.78 89 97.24 5.04 6.22 19.56 19.68 0 29.71 20.83 4.27 21.78 3.07 1.97 11.11 5.17 1.93 4.19 4.64
  14. 14. Procter & Gamble Hygiene & Health Care Ltd. R K S Agrotech Ltd. Reckitt Benckiser (India) Ltd. Rhodia Specialty Chemicals India Ltd. Sharp Menthol India Ltd. Shingar Ltd. Shree Cosmetics Ltd. Shreeji Dye-Chem Ltd. Sivalik Cellulose Ltd. Sonal Cosmetics (Exports) Ltd. Standard Surfactants Ltd. Sunehari Exports Ltd. Surya Vinayak Inds. Ltd. Synthite Industries Ltd. Tamilnadu Forest Plantation Corpn. Ltd. Ultra International Ltd. Unza International Ltd. Unzafrica Ltd. Utkal Soap Products Ltd. Jun-11 Mar-10 Dec-10 Dec-10 Mar-10 Mar-10 Mar-11 Mar-11 Mar-10 Mar-11 Mar-11 Mar-10 Mar-10 Mar-10 Mar-10 Mar-10 Mar-10 Mar-10 Mar-10 94.51 0.2 94.48 93.62 94.33 93.45 62.57 3.33 14 100 96.05 89.14 96.98 85.82 87.76 92.67 54.52 0 0 9.37 100 5.58 5.51 0.65 9.43 39.73 0 0 100 2.51 7.38 0.12 6.17 42.05 6.29 16.96 0 0 Major players Emami Ltd Emami Limited is an Indian producer of fast moving consumer goods (FMCG), such as cosmetics and health and baby products. The company is based in Kolkata. The inception of Emami Group took place way back in mid seventies when two childhood friends, Mr. R.S. Agarwal and Mr. R.S. Goenka left their high profile jobs with the Birla Group to set up Kemco Chemicals, an Ayurvedic medicine and cosmetic manufacturing unit in Kolkata in 1974. It was an extremely bold step in the early seventies when the Indian FMCG market was still dominated by multinationals. But against all odds with a vision of combining the age old wisdom of Ayurveda with modern manufacturing techniques for creating winning brands the company was started with a meager amount of Rs. 20,000. A dream of reaching out to the Indian middle class; a target audience who
  15. 15. they thought will have increasing potential for consumption, the company started manufacturing cosmetic products as well as Ayurvedic medicines under the brand name of Emami from a small factory in Kolkata. In 1978, Mr. Agarwal acquired Himani Ltd. Ten years after commencement of the company, it launched their first flagship brand Boroplus Antiseptic Cream under the Himani umbrella in 1984. Many additional brands followed Boroplus including Boroplus Prickly Heat Powder which came as a brand extension of the mother brand. Today Boroplus is not only the largest selling Antiseptic Cream in India but also in Russia, Ukraine, and Nepal. Nineties was very eventful for Emami. The next flagship brand of the company Navratna Cool Oil came in the nineties under the Himani Umbrella. In 2005 Emami created a marketing history in India by launching Fair and Handsome, the first fairness cream for men. Among the brands created by the company, today Navratna brand is Rs.300 crore followed by Boroplus brand standing at Rs.250 crore and Fairness family standing at Rs.100 crore. Sona Chandi Chyawanprash, Menthoplus and Fast Relief also among the top brands in their respective categories. In 2006, J B Marketing & Finance Ltd., the erstwhile marketing company of the Emami Group merged with Emami Ltd. and the total turnover of Emami including sales in domestic and export market stood at Rs 516 crores at the end of the fiscal year 2006-07. Emami Limited with an investment of Rs 700 crore has acquired major stake in Zandu Pharmaceuticals Works Ltd on the basis of huge business synergy between Zandu and Emami. Post the acquisition of Zandu Pharmaceuticals a century old household name in India, some of its prominent brands like Zandu Balm, Zandu Chyawanprash, Zandu Kesri Jeevan, Zandu Pancharishta, Sudarshan and Nityam Churna are also under Emami’s basket of brands. Within three decades, the company has grown into a huge Rs. 1000 crore Emami Ltd under the flagship company of the Rs.3000 crore Emami Group. Executive summary Executive Summary Emami Ltd. Currency: Rs. Million (Non-Annualised) Total income Sales Income from financial services Mar-08 Mar-09 Mar-10 Mar-11 12 mths 12 mths 12 mths 12 mths 6,049.80 7,591.90 10,488.90 12,779.30 5,830.20 7,407.90 10,081.50 12,223.60 198.3 145.7 357.5 418.9
  16. 16. Total expenses Raw materials, stores & spares Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. Interest paid Depreciation Profits PBDITA (Operating profit) PBDITA net of P&E Profit after tax (PAT) PAT net of P&E 5,117.10 6,929.00 1,033.50 1,466.00 12.9 34.2 301.8 447.2 413.8 470.3 1,452.40 1,556.40 54.4 72.8 315.7 178.9 547.1 1,174.90 154.9 1,160.30 1,176.50 1,418.30 1,169.40 1,390.00 927.5 778.7 920.4 750.4 2,757.80 2,732.00 633.1 607.3 2,966.70 2,873.60 1,254.00 1,160.90 Total liabilities Net worth Paid up equity capital (net of forfeited equity cap.) Reserves and funds Borrowings Fixed deposits Current liabilities & provisions 4,538.30 2,890.10 Total assets Net fixed assets Investments Current assets Loans & advances Gross fixed assets Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets Profitability ratios 9,830.80 11,836.00 1,457.80 3,491.30 55.3 60.9 609.2 659.9 682.2 832.8 2,061.80 2,460.60 9,070.00 11,048.50 11,753.10 2,991.80 6,193.80 6,830.20 124.3 124.3 2,765.80 2,860.50 352 4,400.90 151.3 6,042.50 2,532.50 151.3 6,678.90 2,238.70 1,241.50 1,587.10 2,189.00 2,496.30 4,538.30 778.2 1,029.60 1,566.20 996.2 1,057.10 9,070.00 11,048.50 11,753.10 6,125.90 5,608.50 4,824.60 398.9 620.8 70.8 2,096.90 4,060.00 5,587.60 50.6 633.4 1,154.40 7,064.50 7,634.80 7,969.70 12.7 8.8 41.9 40.7 26 35.8 25.5 35.4 20.6 -16 3.5 99.9 38.2 41.9 94.4 -18.7 107 21.8 21.8 20.4 7.6 98.1 10.3 6.4
  17. 17. PBDITA net of P&E as % of Total inc net of P&E PAT net of P&E as % of Total income net of P&E PAT net of P&E as % of Avg. net worth PAT as % of Avg. net worth PAT net of P&E as % of Avg. total assets PAT as % of Avg. total assets 19.4 15.3 35.5 35.8 23.4 23.5 18.4 9.9 25.5 26.5 11 11.4 26.1 5.8 13.2 13.8 6 6.3 22.7 9.2 17.8 19.3 10.2 11 Liquidity ratios (times) Quick ratio Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) 0.9 2 0.1 20.2 25.3 38.8 0.6 1.1 1.5 3.8 21.2 63.1 1.1 1.6 0.4 2.8 22.5 43.8 1.2 1.5 0.3 11.1 24.6 31.2 Average cost of Funds 18.8 13.3 15.8 6.5 1.5 20 1.1 17 1 17.2 1.1 19.4 Efficiency ratios (times) Total income / Avg. total assets Total income / Compensation to employees Distribution of costs Distribution of Costs (%) Emami Ltd. Currency: Rs. Million (Non-Annualised) Distribution of total expenses Operating expenses Financial charges Provisions Non-cash charges Prior period and extra-ordinary expenses Provision for direct tax Distribution of operating expenses Raw materials, stores & spares Raw material expenses Stores, spares, tools consumed Purchase of finished goods Packaging and packing expenses Mar-08 Mar-09 Mar-10 Mar-11 12 mths 12 mths 12 mths 12 mths 100 95 1.1 0 1.4 0.2 2.4 100 89.1 6.2 0 2.6 0.1 2.1 100 78.3 5.6 0 12.5 0.1 3.6 100 85.3 1.3 0 9.8 0.2 3.4 100 21.3 21.2 0.1 22 5.6 100 23.8 23.6 0.1 20.6 7.7 100 18.9 18.8 0.2 16.8 13.7 100 34.6 34.4 0.2 19.3 0
  18. 18. Power, fuel & water charges Compensation to employees Indirect taxes Excise duty Royalties, technical know-how fees, etc. Rent & lease rent Repairs & maintenance Insurance premium paid Outsourced manufacturing jobs Outsourced professional jobs Non-executive directors' fees Advertising expenses Marketing expenses Distribution expenses Travel expenses Communications expenses Printing & stationery expenses Miscellaneous expenditure Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. 0.3 6.2 8.5 1.9 0 0.3 0.8 0.2 0 0.9 0.2 21.2 5.7 3.1 1.4 0 0 2.5 0 0 0.6 7.2 7.6 2.8 0 0.3 1 0.2 0 2 0.2 20.8 1.4 3 1.4 0 0 2.3 0 0 0.7 7.9 8.9 2.1 0 0.3 1.2 0.2 0 1.2 0.3 22.2 1.5 3 1.3 0 0 1.7 0 0 0.6 6.5 8.3 1.9 0 0.3 1 0.2 0 1.5 0.3 20.1 0.7 3.6 1.3 0 0 1.7 0 0 Source of growth in profits Sources of Growth in Profits Emami Ltd. Currency: Rs. Million (Non-Annualised) Levels in each year Sales PBDIT Profitability (times) Change in each year Change in PBDIT Change in sales Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PBDIT Change in sales Change in profitability Change in profitability on change in income Causes of change in PBDIT (% share) Mar-08 Mar-09 Mar-10 Mar-11 12 mths 12 mths 12 mths 12 mths 5,830.20 7,407.90 10,081.50 12,223.60 965.4 1,239.90 2,356.80 2,439.80 0.2 0.2 0.2 0.2 302.2 274.5 629.5 1,577.70 1,116.90 2,673.60 83 2,142.10 0.5 0.2 0.4 0 80.3 198 24 261.2 10.4 2.8 447.5 491.9 177.5 500.8 -344.6 -73.2
  19. 19. Change in sales Change in profitability Change in profitability on change in income Levels in each year Total income PAT net of P&E Profitability (times) Change in each year Change in PAT net of P&E Change in total income Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PAT net of P&E Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income Causes of change in PAT net of P&E (% share) Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income 26.6 65.5 18 95.2 3.8 4 40.1 44 18.4 603.3 -415.1 25.1 6,034.20 7,558.00 10,456.70 12,657.40 920.4 750.4 607.3 1,160.90 0.2 0.1 0.1 0.1 257.7 -170 664.2 1,523.80 -143.1 2,898.70 553.6 2,200.70 0.4 -0.1 0 0.3 82 156.4 19.3 232.4 -321.3 -81.1 287.8 -311.4 -119.4 127.8 351.8 74 31.8 60.7 7.5 -136.7 189 47.7 -201.1 217.6 83.5 23.1 63.5 13.4 Colgate Palmolive Ltd Colgate Palmolive India Ltd., a subsidiary of Colgate Palmolive Company, USA was incorporated in 1937. It is a bluechip company engaged in the FMCG business. The company's 51 per cent stake is with the promoters, around 26 per cent are with individuals and around 21 per cent is with institutional investors. Currently Mr. Fabian T Gracia is the Chairman of the company. Colgate-Palmolive is Rs1,300 crore company started in year 1937.In Rs2,400 crore domestic market it enjoys 50% of market share. It spread across 4.5 million retails outlets out of which 1.5 million are direct outlets. The Company is having four wholly owned subsidiaries namely Colgate-Palmolive (Nepal) ,Multimint Leasing & Finance and Jigs Investments and Passion Trading & Investment Company. In November 2007, it acquired a 75% equity interest in Advanced Oral Care Products, Professional Oral Care Products and SS Oral Hygiene Products, the company is the fastest
  20. 20. growing and one of the oldest company catering to the personal care products. The company is regularly coming up with new products and has been a consistent financial performer. In July 2009, the Bombay High Court sanctioned the amalgamation of both subsidiaries of the company - Advanced Oral Care Products, Goa and Professional Oral Care Products, Goa. In March 2010, Colgate Palmolive (India) has acquired the remaining 25% of stake in CC Health Care Products from the local shareholders at an aggregate price of Rs 69.07 lakh. Colgate already has 75% stake in CC Health, which is engaged in the manufacture of toothpowder at Hyderabad. It primarily manufactures and markets oral care products, which account for around 90 per cent of its revenues. Over the years it has also diversified into personal care and household care products. Its oral care segment includes tooth pastes/brushes/powder and whitening product. It also has a specialised range of dental therapies under the banner of Colgate Oral Pharmaceuticals. Personal care products include shower creme/gel, soaps, liquid hand wash, shave preparations, skin care, talcum powder, hair oils, shampoos etc. Its house-hold care segment has Axion dish washing paste. It markets its products under the brand names Colgate, Palmolive, Halo, Charmis and Axion. The registered office of the company is in Mumbai. The Company's original plant is located at Sewri in Mumbai, which manufactures toothpaste, shaving cream and charmis cream. It has also set up a plant at Waluj in Aurangabad for manufacturing toilet soaps and tooth powder with backward integrated facilities for manufacturing fatty acid for its toilet soaps and Di-calcium phosphate, a key ingredient for toothpaste. It has also set up a toothpaste manufacturing facility at Baddi in the Solan district of Himachal Pradesh. It has a wide distribution network spread across the country with warehousing facilities in Mumbai, Chennai and Kolkata. Major competitors Company Hindustan Unilever Dabur India Godrej Consumer Sales (Rs.Million) Current Change (%) Price P/E Ratio Market Cap.(Rs.Million) 52-Week High/Low 194011.10 405.10 -1.17 33.57 886003.97 420/266 32643.70 106.50 0.09 36.73 185359.53 122/92 23951.63 494.00 2.99 29.33 163223.68 494/363 22205.58 1145.55 2.65 35.31 151767.98 1130/818 Prod Colgate Palmol. (I)
  21. 21. Marico 23468.70 171.05 -1.98 28.19 107306.05 177/127 Godrej Industries 10588.30 269.75 4.33 45.43 82121.92 269/168 Gillette India 10568.60 2550.00 1.21 133.21 82098.45 2543/1760 P&G Hygiene 10018.99 2190.15 -2.01 43.05 72549.74 2270/1600 Emami 12023.80 396.90 -1.56 25.12 61008.90 545/321 Nirma 32466.50 255.50 0.00 31.66 40684.72 259/214 Bajaj Corp 3586.73 117.15 1.25 15.11 17065.75 132/95 Jyothy Laboratories 6455.14 165.80 2.95 16.69 12985.78 252/125 Reckitt Benckiser 17901.19 246.25 0.00 2.78 8104.87 0/0 Amar Remedies 5780.12 154.00 2.36 9.42 3936.40 158/86 Fem Care Pharma 1074.71 980.05 0.00 18.50 3458.99 1010/980 585.42 136.35 0.00 16.15 3336.88 137/135 4501.72 24.25 0.21 8.74 2818.19 44/20 5.57 198.35 1.98 0.00 1945.00 195/50 JHS Svendgaard 854.15 44.10 9.02 0.00 689.67 88/27 JL Morison India 1009.54 365.00 1.39 132.81 491.41 398/266 MFL India 759.47 9.30 4.26 61.45 321.38 14/8 GKB Ophthalmics 253.82 34.65 5.00 11.21 137.07 50/25 Pee Cee Cosma Sope 268.21 38.75 0.00 162.77 102.54 92/37 430.73 15.17 0.00 4.65 73.65 27/10 2.82 18.45 3.07 0.00 73.57 70/6 Ador Multiprod 106.81 15.61 4.07 62.22 39.20 31/13 Muller & Phipps (I) 122.01 58.40 -4.89 0.00 38.38 103/56 Velvette Intl. Phar 9.21 3.10 0.00 0.00 15.29 0/0 Synergy Cosmetics NA 1.16 -4.92 8.39 13.84 2/1 34.30 2.67 0.00 55.13 12.13 3/3 Rayban Henkel India Parikh Herbals Paramount Cosmetics Guj. Meditech Ideal Optics Milestone  In 2003 Colgate was ranked as India’s Most Trusted Brand across all categories by Brand Equity’s Most Trusted Brand Survey for four consecutive years from 2003 to 2007.
  22. 22.  Colgate was also rated as the number one brand by the A&M – MODE Annual Survey for India’s Top Brands for eight out of nine years during the period 1992 to 2001.  In 2011 Colgate-Palmolive (India), the market leader in oral care, in association with the Indian Dental Association (IDA) achieved the Guinness World Records™ for ‘maximum number of dental check-ups’ in a single day (multiple venues). Executive summary Executive Summary Colgate-Palmolive (India) Ltd. Currency: Rs. Million (Non-Annualised) Total income Sales Income from financial services Total expenses Raw materials, stores & spares Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. Interest paid Depreciation Profits PBDITA (Operating profit) PBDITA net of P&E Profit after tax (PAT) PAT net of P&E Total liabilities Net worth Paid up equity capital (net of forfeited equity cap.) Reserves and funds Borrowings Fixed deposits Current liabilities & provisions Mar-07 Mar-08 Mar-09 Mar-10 12 mths 12 mths 12 mths 12 mths 14,523.80 16,380.00 18,659.20 21,237.10 14,212.50 15,973.00 18,106.60 20,794.80 187.8 214.5 357.3 281.2 12,967.30 14,070.40 15,767.40 17,143.30 1,446.90 1,722.50 4,005.80 6,374.80 76.3 77.4 111 140.3 1,699.30 1,182.80 1,434.00 1,596.80 1,010.50 908.2 705.2 746.6 2,364.60 2,918.70 3,159.50 3,497.60 9.8 152.6 14.4 198.5 11 225.8 15 375.7 2,178.50 2,093.80 1,601.70 1,517.00 3,133.40 2,978.80 2,317.10 2,162.50 3,689.90 3,532.70 2,902.20 2,745.00 5,238.70 5,124.30 4,232.60 4,118.20 7,196.90 2,805.30 7,164.40 1,622.10 7,897.20 2,163.00 9,014.60 3,261.10 1,359.90 1,445.40 42.8 136 1,486.10 46.9 136 2,027.00 46.9 136 3,125.10 45.9 4,206.50 5,342.00 5,513.40 5,520.80
  23. 23. Total assets Net fixed assets Investments Current assets Loans & advances Gross fixed assets 7,196.90 1,676.90 1,333.40 2,391.20 1,153.00 4,114.70 7,164.40 1,905.60 725.9 2,543.60 1,481.80 4,464.90 7,897.20 1,739.30 383.3 3,669.30 1,707.80 4,252.60 9,014.60 2,469.40 210 5,056.00 851.5 5,345.30 Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets 14.9 15.9 4.7 16.4 3.5 13 12.8 8.5 43.8 44.7 -42.2 -0.5 13.9 12.1 17.8 25.3 33.3 10.2 13.8 8.7 42 45.8 50.8 14.1 Profitability ratios PBDITA net of P&E as % of Total inc net of P&E PAT net of P&E as % of Total income net of P&E PAT net of P&E as % of Avg. net worth PAT as % of Avg. net worth PAT net of P&E as % of Avg. total assets PAT as % of Avg. total assets 14.5 10.5 55 58.1 22.4 23.6 18.4 13.3 97.7 104.7 30.1 32.3 19.1 14.8 145 153.3 36.5 38.5 24.3 19.5 151.8 156.1 48.7 50.1 Liquidity ratios (times) Quick ratio Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) 0.3 0.6 0 198.1 2 90.1 0.3 0.5 0 193.1 2.1 94 0.5 0.7 0 300.6 2 95.1 0.7 0.9 0 316.6 1.8 94.8 Average cost of Funds 22.7 32.1 23.5 32.3 2.1 8.5 2.3 13.8 2.5 13 2.5 13.3 Efficiency ratios (times) Total income / Avg. total assets Total income / Compensation to employees
  24. 24. Distribution of costs Distribution of Costs (%) Emami Ltd. Currency: Rs. Million (Non-Annualised) Distribution of total expenses Operating expenses Financial charges Provisions Non-cash charges Prior period and extra-ordinary expenses Provision for direct tax Distribution of operating expenses Raw materials, stores & spares Raw material expenses Stores, spares, tools consumed Purchase of finished goods Packaging and packing expenses Power, fuel & water charges Compensation to employees Indirect taxes Excise duty Royalties, technical know-how fees, etc. Rent & lease rent Repairs & maintenance Insurance premium paid Outsourced manufacturing jobs Outsourced professional jobs Non-executive directors' fees Advertising expenses Marketing expenses Distribution expenses Travel expenses Communications expenses Printing & stationery expenses Miscellaneous expenditure Other operational exp. of industrial ent. Mar-08 Mar-09 Mar-10 Mar-11 12 mths 12 mths 12 mths 12 mths 100 94.1 0.2 0 1.4 0 4.3 100 94.5 0.6 0 1.3 0 3.5 100 94.3 0.1 0 2 0 3.6 100 92.7 0.2 0 1.5 0 5.7 100 13 12.7 0.3 26.8 8.5 0.6 8.9 6.9 5.9 3.2 0.9 0.9 0.1 0.1 1.9 0 19.4 0 2.7 1.7 0 0 4.6 0 100 26.9 26.5 0.3 23.5 0 0.7 9.6 4.7 4 4 0.9 0.7 0.1 0.1 2 0 18.2 0 3 1.3 0 0 4.3 0 100 39.5 39 0.5 9.8 0 0.9 9.9 4.6 4 5.4 0.8 0.7 0.1 0.2 1.9 0 18.5 0 3.1 1.3 0 0 3.3 0 100 39.4 38.9 0.5 8.5 0 0.8 10.2 5.8 5.1 5.9 0.7 0.5 0.1 0.2 1.6 0 18.4 0 3.8 1.3 0 0 2.9 0
  25. 25. Lakme Lakmé is an Indian brand of cosmetics, owned by Unilever and run by CEO Himanshu Jani. Lakme started as a 100% subsidiary of Tata Oil Mills (Tomco), part of the Tata Group; it was named after the French opera Lakmé, which itself is the French form of Lakshmi, the goddess of wealth, also renowned for her beauty. Indian cosmet Lakme was started in 1952, famously because the then Prime Minister, Jawaharlal Nehru, was concerned that Indian women were spending precious foreign exchange on beauty products, and personally requested JRD Tata to manufacture them in India. Simone Tata joined the company as director, and went on to become its chairman. In 1996 Tata sold off their stakes in Lakmé Lever to HLL, for Rs 200 Crore (45 million US$), and went on to create Trent and Westside. Even today, when most multinational beauty products are available in India, Lakme still occupies a special place in the hearts of Indian women Lakme also started its new business in the beauty industry by setting up Lakme Beauty Salons all over India. Now HUL (Hindustan Unilever Limited) has about 110 salons all over India providing beauty services. Lakme' has been ranked as 47th most trusted brand in India by The Brand Trust Report Executive summary Executive Summary Lakme Exports Ltd. [Merged] Currency: Rs. Million (Non-Annualised) Total income Sales Income from financial services Total expenses Raw materials, stores & spares Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. Interest paid Depreciation Mar-95 Mar-96 Mar-97 Dec-97 12 mths 12 mths 12 mths 9 mths 119.2 102.5 11.2 121.2 50.4 13.8 103.1 84.3 14.6 101.3 81.3 16.6 126.7 59.1 1.6 13.4 1.2 20.2 92.4 2.8 1.3 13.8 4.7 13.7 82.2 5.5 1.5 9.9 4.6 0.2 82.3 6.3 1.3 7.1 2.2 0.1 1.8 3.9 2.5 3.3 2 2.9 1.9 2
  26. 26. Profits PBDITA (Operating profit) PBDITA net of P&E Profit after tax (PAT) PAT net of P&E 18.6 18.3 8.8 8.5 39.9 -15 18.6 -36.3 35.3 34.4 18.9 18 36.2 36 21.3 21.1 Total liabilities Net worth Paid up equity capital (net of forfeited equity cap.) Reserves and funds Borrowings Fixed deposits Current liabilities & provisions 221.6 170.5 208.2 174.1 229.4 178 244.1 199.3 15 155.5 21.4 15 159.1 15 163 40 15 184.3 29.7 34.1 11.4 44.8 Total assets Net fixed assets Investments Current assets Loans & advances Gross fixed assets 221.6 31.9 102.5 75.5 10.6 50.8 208.2 28.9 102.5 64.6 12.2 49.1 229.4 27.9 102.5 45.8 52.9 50.9 244.1 26.8 102.5 64.8 50 51.8 Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets -3.1 12.8 -10.1 -10.2 1.7 9 1.7 -27.1 114.5 111.4 2.1 -6 -14.9 -11 -11.5 1.6 2.2 10.2 43.3 47 51.8 72.1 16.3 8.6 Distribution of costs Distribution of Costs (%) Lakme Exports Ltd. [Merged] Currency: Rs. Million (Non-Annualised) Distribution of total expenses Operating expenses Financial charges Provisions Non-cash charges Mar-95 Mar-96 Mar-97 Dec-97 12 mths 12 mths 12 mths 9 mths 100 91.9 1.8 0 3.1 100 74.6 3.2 1.6 3.6 100 79.7 2.6 0 3.5 100 81.9 2.3 0 2.4
  27. 27. Prior period and extra-ordinary expenses Provision for direct tax Distribution of operating expenses Raw materials, stores & spares Raw material expenses Stores, spares, tools consumed Purchase of finished goods Packaging and packing expenses Power, fuel & water charges Compensation to employees Indirect taxes Excise duty Royalties, technical know-how fees, etc. Rent & lease rent Repairs & maintenance Insurance premium paid Outsourced manufacturing jobs Outsourced professional jobs Non-executive directors' fees Advertising expenses Marketing expenses Distribution expenses Travel expenses Communications expenses Printing & stationery expenses Miscellaneous expenditure Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. 0 3.2 0.2 16.8 0.2 14 0 13.4 100 50.8 50.7 0.1 1.9 0 1.4 11.5 1 0.9 0 3 1.9 1 0 0 0 5.4 7 4.9 0 0 0 10.1 0 0 100 4.1 3.9 0.1 7.4 17 1.9 20 6.8 5.1 0 4.2 1.7 1.3 0 0 0 11.3 5.2 3.3 0 0 0 15.7 0 0 100 8.4 8.2 0.2 0 47.3 2.3 15.1 7 6.4 0 0.6 2.6 0.8 0 0 0 0.2 0 0.2 0 0 0 15.6 0 0 100 9.3 9.2 0.1 0 59.3 1.9 10.5 3.3 3.3 0 0.3 1 0.6 0 0 0 0 0 0.1 0 0 0 13.5 0 0 Source of growth in profits Sources of Growth in Profits Lakme Exports Ltd. [Merged] Currency: Rs. Million (Non-Annualised) Levels in each year Sales PBDIT Profitability (times) Change in each year Mar-95 Mar-96 Mar-97 Dec-97 12 mths 12 mths 12 mths 9 mths 102.5 1.9 0 50.4 -30.7 -0.6 84.3 16.7 0.2 81.3 16.2 0.2
  28. 28. Change in PBDIT Change in sales Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PBDIT Change in sales Change in profitability Change in profitability on change in income Causes of change in PBDIT (% share) Change in sales Change in profitability Change in profitability on change in income Levels in each year Total income PAT net of P&E Profitability (times) Change in each year Change in PAT net of P&E Change in total income Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PAT net of P&E Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income Causes of change in PAT net of P&E (% share) Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income -1.5 -3.2 -32.6 -52.1 47.4 33.9 -0.5 -3 0.5 0.6 1.4 0.2 -0.1 -1.4 0 -1 -64.3 32.7 -20.6 40.7 27.4 -0.6 0.1 0 6.9 96 -0.2 3 197.3 -66.7 -43.6 85.8 86.3 118.9 -19.6 0 118.9 8.5 0.1 66.1 -36.3 -0.5 102 18 0.2 101.1 21.1 0.2 -1 -3.8 -44.8 -52.8 54.3 35.9 3.1 -0.9 0.3 0.8 1.5 -3.4 -0.3 -0.7 0 -3.8 -73.8 32.8 -19.7 48 26.1 -0.2 3.3 0 29.4 72.8 -2.3 8.4 164.7 -73.1 -36.3 88.3 48 -5.1 106.1 -0.9 Ponds Pond's Cream is a brand of beauty and health care products that is produced by the Ponds Institute which is owned by the multinational company Unilever. Pond's Cream was invented in the United States as a medicine by scientist Theron T. Pond (1800–1852) in 1846. Mr. Pond extracted a healing tea from witch hazel, with which he discovered he could heal small cuts and
  29. 29. other ailments. The product was named "Golden Treasure", after Theron died, it would be known as "Pond's Extract". By the twentieth century, the company's main strategy was geared towards selling cosmetics products, and so the "Pond's Vanishing Cream" and the "Pond's Cold Cream" were created, marking the entrance of Pond's products into the facial care industry. Today Ponds is sold around the world. Its strengths are in Spain, India, Japan and Thailand. Pond's Company was merged in 1955 with the Chesebrough Manufacturing Company, which had a good percentage of brands in the facial care field. With this merger, "Pond's Creams" would become sisters with the Cutex nail polish brand and the Matchabelli perfumes. In 1987, the Chesebrough Manufacturing Company by most known as "Chesebrough-Ponds", was acquired by Anglo-Dutch company Unilever, giving "Pond's Creams" a more international reach. Then 14% of the company was subsequently traded privately to Bhosle Group of Industries for an undisclosed amount of money. The Brand Trust Report, India Study, 2011, conducted by the Trust Research Advisory included Pond's in the list of the most trusted brand in India. Executive summary Executive Summary Pond'S (India) Ltd. [Merged] Currency: Rs. Million (Non-Annualised) Total income Sales Income from financial services Total expenses Raw materials, stores & spares Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. Interest paid Depreciation Profits PBDITA (Operating profit) Dec-94 Dec-95 Dec-96 Dec-97 12 mths 12 mths 12 mths 12 mths 2,614.50 3,221.10 3,999.70 4,753.80 2,577.40 3,171.30 3,952.20 4,696.90 30.7 38.7 31.3 49.1 2,350.40 2,846.30 3,651.20 4,164.90 840.4 1,108.10 1,454.90 1,946.20 37.7 43.2 46.8 45.8 124.5 148.5 173.3 210.6 39.3 29 28.7 30.8 287.9 366 505.8 671.7 25.4 21.1 14.5 26 15.7 33.8 3.7 40.2 482.5 582 688.1 834.3
  30. 30. PBDITA net of P&E Profit after tax (PAT) PAT net of P&E 490.1 300.5 308.1 578.7 377.9 374.6 690.9 459.6 462.4 852.8 611.2 629.7 Total liabilities Net worth Paid up equity capital (net of forfeited equity cap.) Reserves and funds Borrowings Fixed deposits Current liabilities & provisions 1,435.50 1,728.30 837.5 1,008.20 Total assets Net fixed assets Investments Current assets Loans & advances Gross fixed assets 1,435.50 1,728.30 2,114.50 2,996.50 314.4 404.6 484.3 540.3 146 128 149.1 194.8 853.2 966.3 1,384.00 2,145.10 71.9 178.7 23.7 49.9 427 541.8 652.5 744.8 Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets 140 707.3 47.6 43.7 540.6 18.7 15 25.2 33.7 21.4 12.3 2,114.50 2,996.50 1,176.80 1,987.10 140 140 298.6 875.4 1,041.40 1,690.60 46.9 1.8 1.5 25.2 666 931.3 1,005.80 23.2 21.1 20.6 25.8 20.4 20.4 24.2 28.3 18.2 21.6 16.7 22.3 18.9 14.1 21.2 33 68.9 41.7 Distribution of costs Distribution of Costs (%) Pond'S (India) Ltd. [Merged] Currency: Rs. Million (Non-Annualised) Distribution of total expenses Operating expenses Financial charges Provisions Non-cash charges Prior period and extra-ordinary expenses Provision for direct tax Dec-94 Dec-95 Dec-96 Dec-97 12 mths 12 mths 12 mths 12 mths 100 91.2 1.8 0.1 1 0.3 5.6 100 92.2 0.9 0.1 1 0 5.7 100 92.5 1.4 0 1 0.3 4.8 100 93.4 0.8 0.1 1 0.4 4.2
  31. 31. Distribution of operating expenses Raw materials, stores & spares Raw material expenses Stores, spares, tools consumed Purchase of finished goods Packaging and packing expenses Power, fuel & water charges Compensation to employees Indirect taxes Excise duty Royalties, technical know-how fees, etc. Rent & lease rent Repairs & maintenance Insurance premium paid Outsourced manufacturing jobs Outsourced professional jobs Non-executive directors' fees Advertising expenses Marketing expenses Distribution expenses Travel expenses Communications expenses Printing & stationery expenses Miscellaneous expenditure Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. 100 39.2 39 0.2 30.3 0 1.8 5.8 1.8 0 0 0.5 1.1 0.3 0 0 0 5.2 8.2 0 0 0 0 5.8 0 0 100 42.2 42 0.2 28.9 0 1.6 5.7 1.1 0 0 0.5 1 0.3 0 0 0 6.4 7.5 0 0 0 0 4.7 0 0 100 43.1 42.9 0.2 28.4 0 1.4 5.1 0.8 0 0 0.3 1 0.3 0 0 0 9.6 5.4 0 0 0 0 4.6 0 0 100 50 49.9 0.2 19.6 0 1.2 5.4 0.8 0 0 0.4 0.9 0.3 0 0 0 12.1 5.2 0 0 0 0 4 0 0 Source of growth in profits Sources of Growth in Profits Pond'S (India) Ltd. [Merged] Currency: Rs. Million (Non-Annualised) Levels in each year Sales PBDIT Profitability (times) Change in each year Change in PBDIT Change in sales Dec-94 Dec-95 Dec-96 Dec-97 12 mths 12 mths 12 mths 12 mths 2,577.40 3,171.30 3,952.20 4,696.90 453 533.4 650.5 795.9 0.2 0.2 0.2 0.2 109.6 417.7 80.4 593.9 117.1 780.9 145.4 744.7
  32. 32. Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PBDIT Change in sales Change in profitability Change in profitability on change in income Causes of change in PBDIT (% share) Change in sales Change in profitability Change in profitability on change in income Levels in each year Total income PAT net of P&E Profitability (times) Change in each year Change in PAT net of P&E Change in total income Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PAT net of P&E Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income Causes of change in PAT net of P&E (% share) Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income 0.3 0.1 0.1 0.2 66.4 36.2 7 104.4 -19.5 -4.5 131.3 -11.4 -2.8 122.6 19.2 3.6 60.6 33 8.5 129.8 -24.2 -10.4 112.2 -9.8 -3.9 84.3 13.2 3.4 2,614.50 3,216.60 3,992.60 4,753.80 308.1 374.6 462.4 629.7 0.1 0.1 0.1 0.1 97.9 427.3 66.5 602.1 87.8 776 167.3 761.2 0.2 0.1 0.1 0.2 41.1 47.5 9.3 71 -3.6 -0.8 90.4 -2.1 -0.5 88.2 66.5 12.7 41.9 48.6 9.5 106.7 -5.4 -1.3 102.9 -2.4 -0.6 52.7 39.7 7.6 Procter & Gamble Procter & Gamble Hygiene and Health Care Ltd was incorporated in the year 1964, as Richardson Hindustan Ltd (RHL). The company initially manufactured menthol, dementholised peppermint oil and Vicks range of products. RHL was acquired by Procter & Gamble, USA in the year 1985 consequent to which its name was changed to Procter & Gamble India Ltd. In the year 1999, the company got its present name.
  33. 33. The company manufactures and markets two types of products - healthcare products and female hygiene products which are sold under the famous brands 'Vicks' and 'Whisper' respectively. There are variants under each of these two brands. But the two brands dominate the offerings. P&GHH has sold a number of non-core businesses and brands. The company divested its laundry and detergent business to its sister concern P&GHP in 1992--93 even as it continued to contract manufacture detergents for it. In October 2005, the company completely exited the detergent business after transferring its manufacturing facility to P&GHP. The company divested Medikar anti-lice shampoo business to Marico Industries in 1998--99. Another manufacturing tie-up for shampoo, formed with P&GHP, was terminated in 1999--2000 after a formulation change of the product had necessitated huge capital investment. In 2000--01, the company divested one of its earlier brands, Clearasil. Old Spice brand of products, which the company started marketing in the year 1993 was licensed (trademark & business) to Menezes Cosmetics Pvt. Ltd in December 2002. After the various disinvestments, the company is left with its 'Vicks' and 'Whisper' businesses. The former accounts for about 40 per cent of the revenues and the latter about 60 per cent. The company's plant is located at Kundaim in Goa with capacity for cream and formulations at 4,213 tonnes per annum and that for cosmetics, perfumes and toilet preparations at 10,133 tonnes per annum. The company's capacity utilisation is low at 24 per cent for healthcare products and 42 per cent for cosmetics, perfumes and toilet preparations. The company purchases personal products and toilet preparations from outside. But over the past five years, the purchases have declined drastically and in 2005-06 they formed 4.8 per cent of total raw material cost. The company also outsources manufacture of healthcare products. The company has set up two new plants for healthcare products in Baddi, Himachal Pradesh. The plants commenced commercial production during March 2007 quarter. The company exports Vicks Vaporub to Asean countries, Japan and Australia. However, the exports turnover contribute a meagre one per cent to the overall sales revenue of the company.
  34. 34. The foreign promoters of the company Procter and Gamble and Rosemount Corporation own around 68.7 per cent of the total stake. Institutional Investors and the Indian public hold stakes of 8.4 per cent and 17.5 per cent, respectively. Executive summary Executive Summary Procter & Gamble Hygiene & Health Care Ltd. Currency: Rs. Million (Non-Annualised) Total income Sales Income from financial services Total expenses Raw materials, stores & spares Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. Interest paid Depreciation Profits PBDITA (Operating profit) PBDITA net of P&E Profit after tax (PAT) PAT net of P&E Jun-08 Jun-09 Jun-10 Jun-11 12 mths 12 mths 12 mths 12 mths 6,944.60 8,518.30 6,555.70 7,756.70 131.1 236.4 9,857.40 11,226.30 9,171.20 10,401.80 169.5 330.1 5,762.30 6,770.80 1,353.90 1,759.60 82.6 78.4 542 619.7 232.4 153.4 1,287.20 1,771.80 8,055.00 1,838.30 61.9 747.1 185 2,179.30 9,724.00 2,143.80 61.3 860.7 437.3 2,456.10 122.5 0.3 221.6 1,989.40 2,008.60 1,508.80 1,528.00 66.8 0.3 121.2 88.4 143.7 101 0.3 193.9 1,927.20 1,931.50 1,314.20 1,318.50 2,460.30 2,361.90 1,788.50 1,690.10 2,530.40 2,497.20 1,797.70 1,764.50 Total liabilities Net worth Paid up equity capital (net of forfeited equity cap.) Reserves and funds Borrowings Fixed deposits Current liabilities & provisions 7,356.80 8,741.50 11,078.40 11,944.10 3,466.40 4,400.30 5,346.30 6,006.20 324.6 324.6 324.6 324.6 3,141.80 4,075.70 5,021.70 5,681.60 Total assets Net fixed assets Investments 7,356.80 8,741.50 11,078.40 11,944.10 1,230.80 1,322.80 1,303.80 1,903.90 3,773.10 4,223.50 5,631.60 5,830.60
  35. 35. Current assets Loans & advances Gross fixed assets 2,806.90 2,133.40 3,116.40 4,976.60 2,030.90 2,218.20 3,854.60 5,177.50 2,429.60 3,183.40 6,701.20 3,129.00 Growth (%) Total income Total expenses PBDITA PAT Net worth Total assets 15 11.7 34 46.3 19 25 22.7 17.5 27.7 36.1 26.9 18.8 15.7 19 2.8 0.5 21.5 26.7 13.9 20.7 -21.4 -16.1 12.3 7.8 Profitability ratios PBDITA net of P&E as % of Total inc net of P&E PAT net of P&E as % of Total income net of P&E PAT net of P&E as % of Avg. net worth PAT as % of Avg. net worth PAT net of P&E as % of Avg. total assets PAT as % of Avg. total assets 27.8 19 41.3 41.2 19.9 19.8 28.1 20.1 43 45.5 21 22.2 25.6 18.1 36.2 36.9 17.8 18.1 17.9 13.6 26.9 26.6 13.3 13.1 0.6 0.7 0 6,034.30 7.8 92.2 0.3 0.5 0 0.6 0.7 0 7,677.70 10.2 99.8 0.4 0.5 0 5,956.70 10.7 72.1 1 13.2 1 13 Liquidity ratios (times) Quick ratio Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) Average cost of Funds Efficiency ratios (times) Total income / Avg. total assets Total income / Compensation to employees 8.4 68.8 0 1 12.8 1.1 13.7 Distribution of costs Distribution of Costs (%) Procter & Gamble Hygiene & Health Care Ltd. Currency: Rs. Million (Non-Annualised) Distribution of total expenses Jun-08 Jun-09 Jun-10 Jun-11 12 mths 12 mths 12 mths 12 mths 100 100 100 100
  36. 36. Operating expenses Financial charges Provisions Non-cash charges Prior period and extra-ordinary expenses Provision for direct tax Distribution of operating expenses Raw materials, stores & spares Raw material expenses Stores, spares, tools consumed Purchase of finished goods Packaging and packing expenses Power, fuel & water charges Compensation to employees Indirect taxes Excise duty Royalties, technical know-how fees, etc. Rent & lease rent Repairs & maintenance Insurance premium paid Outsourced manufacturing jobs Outsourced professional jobs Non-executive directors' fees Advertising expenses Marketing expenses Distribution expenses Travel expenses Communications expenses Printing & stationery expenses Miscellaneous expenditure Other operational exp. of industrial ent. Other operational exp. of non-fin. services ent. 88.9 0.4 0 2.1 0.2 8.5 89.5 0.3 0 2.1 0.3 7.8 89.7 0.2 0 2.7 0.8 6.7 94.5 0 0.1 2.5 0.2 2.7 100 26.4 25.7 0.7 0.1 10.7 1.6 10.6 4.5 1.7 6.7 0.4 0.8 0.1 4 2.6 0.1 13.4 5.6 6.1 1.5 0.5 0 2.9 0 1.3 100 29 28.5 0.5 0.1 10.4 1.3 10.2 2.5 0 6.9 0.2 0.6 0.1 2.3 1.5 0.1 14.8 7.4 7 1.1 0.5 0 2.4 0 1.5 100 25.5 25 0.5 5.7 8 0.9 10.3 2.6 1.8 8.1 0.3 0.7 0 1.4 1.7 0 15.6 8.7 5.8 1.2 0.5 0 1.7 0 1.4 100 23.3 22.8 0.5 9.9 9.8 0.7 9.4 4.8 3.8 5.6 0.2 0.5 0 2.5 1.8 0 12.8 9.5 4.5 1.1 0.5 0 1.9 0 1.3 Sources of growth in profits Sources of Growth in Profits Procter & Gamble Hygiene & Health Care Ltd. Currency: Rs. Million (Non-Annualised) Levels in each year Jun-08 Jun-09 Jun-10 Jun-11 12 mths 12 mths 12 mths 12 mths
  37. 37. Sales PBDIT Profitability (times) Change in each year Change in PBDIT Change in sales Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PBDIT Change in sales Change in profitability Change in profitability on change in income Causes of change in PBDIT (% share) Change in sales Change in profitability Change in profitability on change in income Levels in each year Total income PAT net of P&E Profitability (times) Change in each year Change in PAT net of P&E Change in total income Incremental profitability (Change in PBDIT / change in income) (times) Causes of change in PAT net of P&E Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income Causes of change in PAT net of P&E (% share) Change in total income with no chg. in profitability Change in profitability with no chg. in income Change in profitability on change in income 6,555.70 7,756.70 9,171.20 10,401.80 1,547.40 1,718.30 1,906.60 1,184.10 0.2 0.2 0.2 0.1 481.9 170.9 188.3 995.5 1,201.00 1,414.50 -722.5 1,230.60 0.5 0.1 0.1 -0.6 190.8 246.9 44.2 283.5 -95.2 -17.4 313.3 -105.8 -19.3 255.8 -862.6 -115.7 39.6 51.2 2,763.10 165.9 -55.7 8.2 166.4 -56.2 4.2 -35.4 119.4 8.8 6,939.80 8,400.30 9,761.80 11,226.30 1,318.50 1,690.10 1,764.50 1,528.00 0.2 0.2 0.2 0.1 312.2 371.6 74.4 899.3 1,460.50 1,361.50 -236.5 1,464.50 0.3 0.3 0.1 -0.2 149.8 141.3 21 277.5 77.8 16.4 273.9 -171.7 -27.8 264.7 -435.8 -65.4 48 45.3 6.7 74.7 20.9 4.4 368.2 -230.8 -37.4 -111.9 184.3 27.6
  38. 38. Summary Size of the Industry The size of Indian Cosmetics Industry globally is $ 274 billion, while that of the Indian cosmetic industry is $ 4.6 billion. According to analysis and figures given by the Confederation of Indian Industries (CII), the total Indian beauty and cosmetic market size Market Capitalization currently stands at US$950 million and showing growth between 1520% per annum. Output per annum Industry sources estimate a rapid growth rate of 20% per annum Percentage in World Market The overall beauty and wellness market that includes beauty services stands at about US$2,680 million, according to CII estimates. Bearing a long glowing heritage of cosmetic and beauty, aesthetic makeup products is being used since olden days and nowadays it appear like a booming economy in India which would be the largest cosmetic consuming country in a next few decades. While the demand of beautifying substances are growing day by day, a large number of local as well as international manufacturers gradually extend their ranges and products in different provinces of India. Since 1991 with the liberalization along with the crowning of many Indian women at international beauty pageants, the cosmetic industry has come into the limelight in a bigger way. Subsequently their has been a change in the cosmetic consumption and this trend is fueling growth in the cosmetic sector. Indian cosmetic Industry had rapid growth in the last couple of years. While this is due to the improving purchasing power and increasing fashion consciousness, the industry is expected to maintain the growth momentum during the period 2009-2012. In the Indian Cosmetic Industry both electronic as well as print media are playing an important role in spreading awareness about the cosmetic products and developing fashion consciousness among the Indian consumers. Due to the development of satellite television and a number of television channels as well as the Internet in the modern day, the Indian consumers are constantly being updated about new
  39. 39. cosmetic products, translating into the desire to purchase them. Additionally, the flourishing Indian fashion/film industry is fueling growth into the Cosmetic industry in India by making Indians to realize the importance of having good looks and appearances. Today most of the cosmetics manufacturers in India cater to the domestic market but they are gradually establishing their footholds in overseas markets. In recent years, cosmetic manufactures in India have received orders from overseas markets; for example - Indian herbal cosmetic products have a tremendous demand in the international market.

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