Buy Procter & Gamble; target of Rs 2088: Firstcall Research

“Procter & Gamble Company (P&G) was founded in 1837 and is headquartered in Cincinnati, Ohio. P&G, together with its subsidiaries, provides branded consumer goods products worldwide. Procter & Gamble is the largest maker of consumer packaged goods in the world and the largest advertiser in the United States. The company is also credited with billion Dollar Company and also many business innovations. P&G products are sold in more than 180 countries primarily through mass merchandisers, grocery stores, membership club stores and drug stores. P&G continue to expand presence in other channels including department stores and “high frequency stores,” the neighborhood stores which serve many consumers in developing markets. We have on-the-ground operations in approximately 80 countries. P&G market environment is highly competitive, with global, regional and local competitors. In many of the markets and industry segments in which company sell co’s products, P&G compete against other branded products as well as retailers’ private-label brands.”

“Procter & Gamble Hygiene & Health Care Ltd disclosed results for the quarter ended Sep 2011. Net sales for the quarter moved up 32% to Rs.3020.50 million as compared to Rs.2282.20 million during the corresponding quarter last year. During the quarter, the company has reported Net Profit increased to Rs.427.80 million from Rs.313.60 million in previous year same quarter. The Basic EPS of the company stood at Rs.13.18 for the quarter ended Sep 2011.”

“At the current market price of Rs.1816.00, the stock is trading at 35.97 x FY12E and 30.05 x FY13E respectively. Price to Book Value of the stock is expected to be at 7.71 x and 6.14 x respectively for FY12E and FY13E. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.50.48 and Rs.60.43 respectively. The Company has in its portfolio P&G's Billion dollar brands such as Vicks & Whisper. With a turnover of Rs. 500+ crores P&G products are sold in more than 180 countries primarily through mass merchandisers, grocery stores, membership club stores and drug stores. P&G is the second largest FMCG Company and also leading a best position in world.”

“Company’s product occupies major market share from Vicks Vaporub and Whisper. The top line of the company is expected to grow at a CAGR of 16% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 26.44 x for FY12E and 22.30 x for FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 2088 for medium to long term investment,” says Firstcall Research report.  

Bodies Corporate holding more than 50% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.