Mehabe score: 6 G Factor: 3 Piotski Score: 7 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 7.
Description
Procter & Gamble Hygiene and Health Care Limited is engaged in the manufacturing and selling of branded packaged fast moving consumer goods in the femcare and healthcare businesses. Its portfolio includes WHISPER – India’s leading Feminine Hygiene brand, and VICKS – India’s No. 1 Health Care brand and Old Spice.
Main Points
Hygiene business
Procter & Gamble’s brand Whisper in the Hygiene business continues to hold leadership position in the market. The company launched Whisper Choice Aloe vera longer length in “Comfort & Soft segment”. Further it also upgraded the flagship Ultra & Choice portfolio. #Site:PGHHMain Symbol:PGHH
Stock trades at 13126.0, above its 50dma 12919.89. It also trades above its 200dma 12452.59. The stock remains bullish on techicals
The 52 week high is at 14137.75 and the 52week low is at 9691.40
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 48.43%
– has been maintaining a healthy dividend payout of 60.50%
Weakness
– Stock is trading at 32.22 times its book value
-The company has delivered a poor sales growth of 5.16% over past five years.
Competition
– The industry trades at a mean P/E of 60.4x. Hind. Unilever trades at the industry’s max P/E of 74.69x. PGHH trades at a P/E of 63.5x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. PGHH has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 0.8%. The max 1- month return was given by Hind. Unilever: a return of 12.62 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 787.0 cr compared to Rs 635.0 cr for period ended Jun 2020, a rise of 23.9%
Operating Profits reported at Rs 75.0 cr for period ended Jun 2021 vis-vis 110.0 for period ended Jun 2020 .
Operating Margins contracted -779.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 15.09 compared to Rs 30.29 for previous quarter ended Mar 2021 and Rs 21.32 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3574.0 cr for period ended Jun 2021 vis-vis sales of Rs 3002.0 cr for the period ended Jun 2020, a healthy growth of 16.0%. The 3 year sales cagr stood at 13.3%.
Operating margins expanded to 25.0% for period ended Jun 2021 vis-vis 20.0% for period ended Jun 2020, expansion of 500.0 bps.
Net Profit reported at Rs 652.0 cr for period ended Jun 2021 vis-vis sales of Rs 433.0 cr for the period ended Jun 2020, rising 33.6%.
Company recorded a healthy Net Profit CAGR of 20.2% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 42.0% compared to 48.0% over the last 3 Years. – The stock has given a return of 27% on a 1 Year basis vis-vis a return of 9% over the last 3 Years. – The compounded sales growth on a TTM bassis is 14% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is 58% vis-vis a compounded profit growth of 0% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 2.53% vis-vis 2.52% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 13.27% vis-vis 13.34% for Mar 2021
Conclusion
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 48.43%
– has been maintaining a healthy dividend payout of 60.50% – Stock is trading at 32.22 times its book value
-The company has delivered a poor sales growth of 5.16% over past five years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 12919.89 and is trading at 13126.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
