23 October 2019
3QFY20 Results Update | Sector: Consumer
P&G Hygiene and Healthcare
Estimate changes
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
PG IN
32
325.7 / 4.4
12700 / 8500
-15/10/13
77
CMP: INR10,034
TP: INR9,995 (0%)
Neutral
Lockdown leads to sales decline; profits in-line
While P&G Hygiene and Healthcare (P&GHH)’s operations in 3QFY20 were
affected by the COVID-19-led lockdown, its ability to arrest decline in
profitability is encouraging.
We believe the company’s portfolio is highly resilient and would bounce
back once normalcy returns.
Long-term prospects remain attractive on account of strong moats.
Maintain
Neutral.
P&GHH’s 3QFY20 sales declined 6.2% YoY to INR6.6b
(est. INR7.1b), with
EBITDA decreasing 3.6% YoY to INR1.4b (est. INR1.4b) and PBT coming in
flat YoY at INR1.4b (est. INR1.3b).
Adj. PAT grew 12.8% YoY to INR1b (est. INR990m), supported by a lower
corporate tax rate. Reported PAT came in at INR911m, which has been
adjusted for exceptional expenses.
Ad spends grew 6.4% YoY to INR747m, employee expenses 45.2% YoY to
INR502m, and other expenses 12.3% YoY to INR1.7b.
Gross margins expanded 900bp YoY to 66.6%.
As a percentage of sales, ad
spends rose 130bp YoY to 11.4%, employee costs 270bp YoY to 7.7%, and
other expenses 440bp YoY to 26.5%. This resulted in a 60bp expansion in
EBITDA margins to 21.1% (est. 19%) in 3QFY20.
The company reported impairment loss of INR139m on certain items in
Property, Plant, Equipment that had been classified as “Held for Sale”. We
have adjusted our 3QFY20 tax and PAT numbers for this exceptional expense.
9MFY20 sales/EBITDA/PAT grew +2.5%/-6.8%/+4.5% YoY.
The management had forecast high single-digit sales growth for the quarter
before the lockdown. However, the company’s operations have been
severely disrupted due to the lockdown.
The management further indicated in the near term, the company would
focus on scaling up its operations to maximize the availability of its products
to meet consumer needs, while following the health and safety guidelines
imposed by government authorities.
While near-term sales are likely to be impacted, P&GHH has a more
resilient portfolio, than that of peers, to withstand the COVID-19-related
disruption in the post lockdown phase. We maintain sales forecasts in FY21
and FY22 and sustained profitability improvement in recent quarters, with
normalizing ad-spends over the next couple of years resulting in an ~10%
EPS upgrade.
Although valuations are expensive at 52.9x FY22E EPS, implying near-term
upside is limited, two factors make P&GHH an attractive long-term core
holding: (a) huge category growth potential in the Feminine Hygiene
segment (~70% of sales) and potential for market share gains owing to its
considerable moats, and (b) potentially massive margin gains from
premiumization in Feminine Hygiene over the long term. Maintain
Neutral.
Financials & valuations (INR b)
Y/E March
2019 2020E 2021E 2022E
Sales
29.5 30.0 31.7 36.4
Sales Gr. (%)
20.0
1.7 5.7 14.8
EBITDA
6.1
6.1 7.0 8.3
Margins (%)
20.7 20.4 22.0 22.9
Adj. PAT
4.1
4.5 5.1 6.2
Adj. EPS (INR)
126.3 138.1 158.1 189.6
EPS Gr. (%)
7.3
9.3 14.4 19.9
BV/Sh.(INR)
280.1 322.9 372.0 430.8
Ratios
RoE (%)
47.9 45.9 45.6 47.3
RoCE (%)
50.4 48.3 47.7 49.4
Valuations
P/E (x)
79.4 72.6 63.5 52.9
P/BV (x)
35.8 31.1 27.0 23.3
EV/EBITDA (x)
52.6 51.7 45.0 37.3
Div. Yield (%)
1.0
1.0 1.1 1.3
Shareholding pattern (%)
As On
Mar-20 Dec-19
Promoter
70.6
70.6
DII
12.9
12.2
FII
2.8
3.3
Others
13.7
13.8
FII Includes depository receipts
Sales below expectations; EBITDA in-line
Highlights from management commentary
Mar-19
70.6
10.8
3.4
15.1
Valuation and view
Krishnan Sambamoorthy – Research analyst
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 6129 1545
Research analyst: Dhairya Dhruv
(Dhairya.Dhruv@motilaloswal.com); +91 22 6129 1547 |
Pooja Doshi
(Pooja.Doshi@MotilalOswal.com); +91 22 5036 2689
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
Standalone – Quarterly earnings-15%
Y/E June
FY19
1Q
2Q
Net Sales
7,918
8,181
YoY Change (%)
20.4
16.2
Gross profit
4,766
4,542
Margin (%)
60.2
55.5
EBITDA
2,096
1,912
Growth
11.8
-9.0
Margins (%)
26.5
23.4
Depreciation
121
123
Interest
4
5
Other Income
104
117
PBT
2,160
1,901
Tax
719
660
Rate (%)
33.3
34.7
Adj PAT
1,356
1,241
YoY Change (%)
17.3
-5.4
Margins (%)
18.2
15.2
E: MOFSL Estimates
Y/E June
-9%
3Q
6,993
22.9
4,032
57.7
1,437
-1.9
20.5
126
5
84
1,390
489
35.2
901
-1.4
12.9
4Q
6,373
21.5
3,776
59.3
648
-22.8
10.2
128
40
97
577
-31
-5.4
608
36.5
9.5
1Q
8,521
7.6
5,146
60.4
1,822
-13.1
21.4
115
4
110
1,814
445
24.6
1,368
0.9
16.1
1%
FY20
2Q
8,593
5.0
5,381
62.6
1,867
-2.4
21.7
115
22
90
1,820
461
25.3
1,359
9.5
15.8
-24%
3Q
6,561
-6.2
4,371
66.6
1,384
-3.6
21.1
118
24
145
1,388
371
26.8
1,016
12.8
15.5
-4%
FY19
4QE
6,297
-1.2
3,983
63.3
1,042
60.7
16.5
145
20
100
977
232
23.8
711
17.0
11.3
29,465
20.0
17,116
58.1
6,093
-3.0
20.7
498
55
402
6,027
1,836
30.5
4,106
7.3
13.9
FY20E
29,972
1.7
18,882
63.0
6,114
0.4
20.4
491
70
446
5,999
1,510
25.2
4,489
9.3
15.0
FY20
3QE
7,133
2.0
4,280.0
60.0
1,357
-5.6
19.0
141
7
114
1,323
333
25.2
990
9.8
13.9
(INR m)
Var.
(%)
-8.0%
2.0%
4.9%
2.7%
1Q
2Y average growth (%)
Sales
EBITDA
PAT
% of Sales
COGS
Employee Expenses
A&P Expenses
Other Expenses
Depreciation
YoY change (%)
COGS
Employee Expenses
A&P Expenses
Other Expenses
Other Income
EBIT
E: MOFSL Estimates
15.0
17.9
14.0
39.8
4.5
10.5
18.7
1.5
13.7
22.8
57.7
33.4
194.9
13.1
FY19
2Q
12.8
-8.5
-9.1
44.5
4.5
11.0
16.7
1.5
29.7
27.2
32.9
16.8
64.5
-9.1
3Q
11.0
-3.3
-4.8
42.3
4.9
10.0
22.1
1.8
44.6
5.9
-3.2
37.6
27.5
-1.2
4Q
12.9
-29.4
-3.2
40.7
3.9
11.0
34.1
2.0
39.6
2.8
3.6
33.8
41.9
-27.4
1Q
14.0
-0.6
9.1
39.6
4.9
12.3
21.8
1.3
7.1
17.5
25.6
25.6
5.6
-13.6
FY20
2Q
10.6
-5.7
2.0
37.4
5.0
12.6
23.3
1.3
-11.7
16.3
20.4
47.0
-22.6
-2.1
3Q
8.4
-2.8
5.7
33.4
7.7
11.4
26.5
1.8
-26.1
45.2
6.4
12.3
72.2
-3.4
4QE
10.1
19.0
26.7
36.7
5.2
10.2
31.4
2.3
-10.9
30.2
-8.7
-9.2
3.4
72.5
8 May 2020
2
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
Key exhibits
Exhibit 1: Reported net sales declined 6.2% YoY to INR6.6b
Sales (INR b)
20.4
9.5
9.5
4.3
16.2
Sales growth (%)
22.9 21.5
7.6 5.0
(6.2)
(17.3)
24.0
Exhibit 2: Reported EBITDA fell 3.6% YoY to INR1.4b
EBITDA (INR b)
EBITDA growth (%)
11.8
(8.0) (4.8)
(36.0)
1.3 1.9 2.1 1.5 0.8 2.1 1.9 1.4 0.6 1.8 1.9 1.4
(9.0)
(1.9)
(13.1)
(22.8)
(2.4) (3.6)
(0.9)
(9.9)
5.0 6.6 7.0 5.7 5.2 7.9 8.2 7.0 6.4 8.5 8.6 6.6
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 3: Gross margins expanded 900bp YoY to 66.6%
Gross margin (%)
Exhibit 4: EBITDA margins increased 60bp YoY to 21.1%
EBITDA margin (%)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 5: As a percentage of sales, staff costs grew 270bp YoY, ad spends 130bp YoY, and
other expenses 440bp YoY
A&P spends as % of sales
Staff costs as % of sales
Other expenses as % of sales
19.8
25.8
3.1
6.6
16.9
16.6
4.1
9.6
5.7
12.8
31.0
18.7
4.6
12.9
4.5
10.5
16.7
4.5
11.0
22.1
4.9
10.0
34.1
21.8
4.9
12.3
23.3
5.0
12.6
26.5
7.7
11.4
4.4
8.0
3.9
11.0
Source: Company, MOFSL
8 May 2020
3
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
Valuation and view
Happenings over the last 10 years
While P&GHH’s sales/EBITDA/PAT increased at a ~20%/~14%/~12% CAGR in the
first half of the decade ending FY20E, growth has been much slower at ~5%
CAGR on all these fronts in the second half of the decade, dragging down
decadal sales/EBITDA/PAT to ~13%/~9%/~8%.
Price cuts taken at the beginning of the decade, category development efforts,
and an increase in distribution led to the EBITDA margin declining over FY10–14,
but sales and EBITDA still growing at a healthy pace.
In an effort to revitalize sales growth, the company has embarked on a second
round of investments in ad spends, distribution expansion, new launches, and
price cuts over the past seven to eight quarters. While this yielded strong
topline growth in FY19 (20% sales growth), sales have been tepid thus far (in the
mid-single digits) in FY20E, weighed by the slowdown in personal care
categories.
While near-term sales would be impacted, P&GHH has a more resilient
portfolio, than that of peers, to withstand the COVID-19-related disruption in
the post lockdown phase. We maintain sales forecasts in FY21 and FY22 and
sustained profitability improvement in recent quarters, with normalizing ad
spends over the next couple of years resulting in an ~10% EPS upgrade.
Although valuations are expensive at 52.9x FY22E EPS, implying near-term
upside is limited, two factors make P&GHH an attractive long-term core holding:
(a) huge category growth potential in the Feminine Hygiene segment (~70% of
sales) and potential for market share growth owing to its considerable moats,
and (b) potentially massive margin gains from premiumization in Feminine
Hygiene over the longer term.
We derive a TP of INR9,995, set at 55x Mar’22 EPS of INR190. Maintain
Neutral.
A key investment risk here is the government considering price caps on
Feminine Hygiene products.
New
FY20E
29,972
6,114
4,489
FY21E
31,689
6,971
5,137
FY22E
36,394
8,334
6,162
FY20E
30,636
5,882
4,310
Old
FY21E
31,776
6,260
4,605
FY22E
36,475
7,514
5,548
Change
FY20E FY21E FY22E
-2.2% -0.3% -0.2%
3.9% 11.4% 10.9%
4.1% 11.6% 11.1%
Source: Company, MOFSL
Max (x)
-1SD
46.2
40.4
34.8
23.9
21.0
29.1
38.0
Our view on the stock
Exhibit 6: We have raised our PAT forecasts by 4.1%/11.6% for FY20/FY21
Change in Estimates
Net Sales
EBITDA
Adjusted PAT
Exhibit 7: P&GHH P/E (x)
110.0
90.0
70.0
50.0
30.0
10.0
26.0
69.4
50.6
31.8
69.2
P/E (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 8: Consumer sector P/E (x)
P/E (x)
Min (x)
51.0
88.7
41.0
31.0
Avg (x)
+1SD
Source: Company, MOFSL
Source: Company, MOFSL
8 May 2020
4
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
Financials and valuations
Standalone – Income statement
Y/E June
Total Income from Operations
Change (%)
Raw Materials
% of Sales
Employees Cost
% of Sales
Other Expenses
% of Sales
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
Standalone – Balance sheet
Y/E June
Equity Share Capital
Total Reserves
Net Worth
Deferred Tax Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
E: MOFSL Estimates
FY15
23,338
13.8
9,209
39.5
1,133
4.9
8,152
34.9
18,494
79.2
4,844
20.8
525
4,319
57
746
5,008
0
5,008
1,547
30.9
3,461
3,461
14.6
14.8
FY16
22,754
-2.5
8,848
38.9
1,174
5.2
6,674
29.3
16,696
73.4
6,059
26.6
517
5,542
63
876
6,355
0
6,355
2,130
33.5
4,225
4,225
22.1
18.6
FY17
23,204
2.0
9,150
39.4
1,141
4.9
6,267
27.0
16,558
71.4
6,646
28.6
597
6,049
104
773
6,718
0
6,718
2,390
35.6
4,327
4,327
2.4
18.6
FY18
24,553
5.8
9,487
38.6
1,152
4.7
7,634
31.1
18,273
74.4
6,280
25.6
524
5,756
53
241
5,944
-82
5,862
2,116
36.1
3,746
3,828
-11.5
15.6
FY19
29,465
20.0
12,349
41.9
1,324
4.5
9,700
32.9
23,373
79.3
6,093
20.7
498
5,595
55
402
5,942
85
6,027
1,836
30.5
4,191
4,106
7.3
13.9
FY20E
29,972
1.7
11,090
37.0
1,678
5.6
11,090
37.0
23,857
79.6
6,114
20.4
491
5,623
70
446
5,999
0
5,999
1,510
25.2
4,489
4,489
9.3
15.0
FY21E
31,689
5.7
12,042
38.0
1,584
5.0
11,091
35.0
24,717
78.0
6,971
22.0
564
6,408
55
513
6,865
0
6,865
1,728
25.2
5,137
5,137
14.4
16.2
(INR m)
FY22E
36,394
14.8
13,830
38.0
1,674
4.6
12,556
34.5
28,060
77.1
8,334
22.9
631
7,703
55
587
8,235
0
8,235
2,073
25.2
6,162
6,162
19.9
16.9
(INR m)
FY22E
325
13,660
13,985
-489
0
13,496
5,407
3,185
2,222
0
200
0
23,590
2,194
2,194
14,962
4,242
12,516
6,004
1,388
5,124
11,074
13,496
0
FY15
325
13,133
13,457
-40
0
13,418
5,222
2,128
3,093
0
390
0
15,962
1,191
1,139
6,178
7,454
6,027
3,723
2,234
70
9,934
13,418
0
FY16
325
16,193
16,518
-89
0
16,428
5,819
2,645
3,174
0
347
0
18,053
1,275
1,496
10,732
4,550
5,146
3,241
1,838
67
12,907
16,428
0
FY17
325
4,937
5,261
-263
0
4,999
4,024
1,167
2,857
0
408
0
8,073
1,774
1,328
1,168
3,803
6,340
3,632
2,150
558
1,733
4,999
0
FY18
325
7,730
8,055
-230
0
7,825
3,975
1,474
2,501
0
215
0
11,308
1,236
1,485
3,996
4,591
6,199
4,062
1,606
530
5,109
7,825
0
FY19
325
8,766
9,091
-368
0
8,723
4,145
1,803
2,342
0
146
0
13,464
2,034
1,807
5,405
4,219
7,229
5,477
1,043
709
6,235
8,723
0
FY20E
325
10,158
10,482
-404
0
10,078
4,141
1,990
2,151
0
100
0
17,740
1,807
1,807
9,902
4,225
9,914
4,949
1,148
3,818
7,826
10,078
0
FY21E
325
11,750
12,075
-445
0
11,630
4,887
2,554
2,333
0
200
0
19,928
1,910
1,910
11,874
4,233
10,831
5,231
1,262
4,337
9,097
11,630
0
8 May 2020
5
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
Financials and valuations
Ratios
Y/E June
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
Working Capital Ratios
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Debt/Equity
Standalone – Cash flow statement
Y/E June
PBT
Depreciation
Net interest expense
Others
(Inc)/Dec in WC
Taxes
CF from Operations
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Dividend Paid
Interest Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOFSL Estimates
FY15
106.5
122.8
414.6
0.0
0.0
94.2
81.7
24.2
13.7
66.0
0.0
131.4
29.5
30.0
1.7
19
16
47
0.0
FY16
130.0
146.1
508.9
36.0
27.7
77.2
68.7
19.7
13.8
52.0
0.4
92.5
28.2
28.6
1.4
18
19
51
0.0
FY17
133.1
151.7
162.1
389.0
292.2
75.4
66.1
61.9
14.0
48.8
3.9
123.7
39.7
41.0
4.6
24
22
54
0.0
FY18
117.8
134.1
248.2
40.0
34.0
85.2
74.8
40.4
13.1
51.2
0.4
116.3
57.5
59.8
3.1
22
21
57
0.0
FY19
126.3
141.8
280.1
101.3
80.2
79.4
70.7
35.8
10.9
52.6
1.0
139.4
47.9
50.4
3.4
20
20
59
0.0
FY20E
138.1
153.4
322.9
95.4
69.0
72.6
65.4
31.1
10.5
51.7
1.0
232.9
45.9
48.3
3.0
22
22
60
0.0
FY21E
158.1
175.6
372.0
109.2
69.0
63.5
57.1
27.0
9.9
45.0
1.1
157.1
45.6
47.7
2.7
22
22
60
0.0
FY22E
189.6
209.3
430.8
131.0
69.0
52.9
47.9
23.3
8.5
37.3
1.3
211.1
47.3
49.4
2.7
22
22
60
0.0
(INR m)
FY22E
8,235
631
-532
0
1,110
-2,073
7,372
-520
6,852
0
542
22
0
0
-4,252
-55
0
-4,307
3,087
11,874
14,962
FY15
5,008
525
-658
212
1,225
-2,056
4,256
10
4,266
0
274
284
0
0
-893
-9
-152
-1,053
3,487
2,691
6,178
FY16
6,355
517
-785
66
-615
-2,013
3,525
-523
3,002
0
2,770
2,247
0
0
-1,182
-35
0
-1,217
4,554
6,178
10,732
FY17
6,718
597
-644
146
135
-2,500
4,453
-438
4,015
0
2,009
1,571
0
0
-15,550
-37
0
-15,587
-9,564
10,732
1,168
FY18
5,818
524
-147
225
466
-2,731
4,155
-381
3,774
0
115
-266
0
0
-1,055
-6
0
-1,061
2,828
1,168
3,996
FY19
6,027
498
-347
0
283
-1,836
4,624
-100
4,524
0
228
128
0
0
-3,289
-55
0
-3,344
1,408
3,996
5,404
FY20E
5,999
491
-376
0
2,906
-1,510
7,511
49
7,560
0
105
154
0
0
-3,097
-70
0
-3,167
4,498
5,404
9,902
FY21E
6,865
564
-458
0
702
-1,728
5,945
-846
5,100
0
472
-373
0
0
-3,545
-55
0
-3,600
1,973
9,902
11,874
8 May 2020
6
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
8 May 2020
7
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
8 May 2020
8