Buy Procter & Gamble, target of Rs 901: I Infoline

India Infoline is bullish on Procter & Gamble and has recommended buy rating with target of Rs 901, in its November 04, 2008. “Procter & Gamble Hygiene and Health Care, PGHH enjoys strong leadership position in its core high-margin-high-growth segments with two flagship brands, Vicks in healthcare space and Whisper in the feminine hygiene space (50% market share). With a very low penetration level and low per capita consumption, both these categories have a tremendous potential to grow. PGHH being the market leader will be the biggest beneficiary. The feminine hygiene business of the company has picked up pace and is likely to sustain the growth momentum.” 

The report also says, “PGHH has set up two new healthcare plants in Baddi with an investment of Rs 600 million to meet increasing demand for its products. It continues to produce feminine hygiene products at Goa facility. From Q1 F6/08, the company has commenced commercial production and dispatches of additional products from its Baddi facility. With the additional contribution from the new plants, we expect the overall profitability to improve going forward. At the current market price of Rs 753, the stock is trading at 13.7x FY10E EPS of Rs 54.8. We recommend BUY with a one-year price target of Rs 901, an upside of 19.7%,” says India Infoline's research report.

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