10 November 2020
2QFY21 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
368.2 / 4.5
12450 / 8500
7/-24/-8
77
CMP: INR11,344
TP: INR11,700 (+3%)
Neutral
Stellar performance; Beat on all fronts
P&G Hygiene and Healthcare (PGHH) reported a surprisingly strong 18.5%
sales growth in 1QFY21 (June year-end) in a difficult operating environment.
Management’s statement in the press release was also encouraging. The
press release stated that growth was driven by the Feminine Hygiene
segment (67% of FY20 sales), which grew in double-digits (in our view over
20%) compared to the Healthcare segment, which grew in high single-digits.
After ~25% growth in the Feminine Hygiene segment in FY19 (and ~20%
overall sales growth), this segment had reported flattish growth in FY20 as
highlighted in the annual report
note
released last week.
Adjusted for one-offs (amounts and cost heads not shared separately),
management stated that comparable earnings growth for the quarter was
~25% v/s reported earnings growth of 86%, which indicates that EBITDA
margins while up 130bp YoY, were in line with expectations.
While the structural opportunity remains attractive in both the Feminine
Hygiene and Healthcare segments, valuations are fair at 52x FY22E EPS
(June year-end). Maintain
Neutral.
1QFY21 sales/EBITDA/PBT/adj. PAT grew 18.5%/25.8%/25%/25.3% YoY to
INR10.1b/INR2.3b/INR2.3b/INR1.7b (v/s est. INR8.9b/INR2b/INR2b
INR1.5b).
While management has not provided specifics of one-time items, they have
stated that adj. PAT growth for 1QFY21 was up 25%. We have made
adjustments to the figures mentioned above based on our assumptions.
Ad spends declined 13.7% YoY to INR902m, employee expenses grew 46.1%
YoY to INR615m, while other expenses (adjusted) rose 49.9% YoY to
INR2.9b.
Gross margins expanded 510bp YoY to 66% (v/s est. 61%).
As % of sales, ad spends declined by 330bp YoY to 8.9%, employee costs
rose by 120bp YoY to 6.1% and other expenses were up by 590bp YoY to
28.3%, leading to a 130bp expansion in EBITDA margins to 22.7% (v/s est.
22.9%).
Feminine care business delivered double-digit sales growth, while
Healthcare business sales grew in high single-digits during 1QFY21.
The company’s production and services are back to pre-COVID levels.
Changes to the model have led to 4.8%/9.5% increase in EPS for FY21/FY22E
We are still assuming 17.1% sales growth for the year despite 18.5% growth
in 1QFY21 and weaker base (v/s 1QFY21) as we await more evidence of the
sustenance of strong top line growth witnessed in 1QFY21.
Financials & valuations (INR b)
Y/E March
2020 2021E 2022E
Sales
30.0 35.2 40.7
Sales Gr. (%)
1.9 17.1 15.9
EBITDA
6.2
7.7
9.6
Margins (%)
20.6 22.0 23.5
Adj. PAT
4.4
5.7
7.1
Adj. EPS (INR)
136.5 175.1 218.0
EPS Gr. (%)
8.0 28.3 24.5
BV/Sh.(INR)
356.7 394.7 438.3
Ratios
RoE (%)
42.9 46.7 52.4
RoCE (%)
44.5 48.2 54.0
Valuations
P/E (x)
83.1 64.8 52.0
P/BV (x)
31.8 28.7 25.9
EV/EBITDA (x)
58.2 45.7 36.6
Div. Yield (%)
0.9
1.3
1.5
Shareholding pattern (%)
As On
Sep-20 Jun-20
Promoter
70.6
70.6
DII
13.5
13.2
FII
2.5
2.6
Others
13.4
13.6
FII Includes depository receipts
Sales above expectations; Margins mostly in line
Sep-19
70.6
12.1
3.4
13.9
Highlights from management commentary
Valuation and view
Krishnan Sambamoorthy – Research analyst
(Krishnan.Sambamoorthy@MotilalOswal.com)
Research analyst: Dhairya Dhruv
(Dhairya.Dhruv@MotilalOswal.com)
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
As highlighted in our annual report
note
released last week, (a) increasing pace
of distribution expansion, (b) continuing strong pace of category development
efforts in schools to boost awareness and growth, (c) rising ad spends after a lull
in preceding years, (d) healthy pipeline of new products, (e) hastening consumer
entry into the category through launches at low price points, and (f) willingness
to take price cuts whenever required to boost growth, are all encouraging
developments that should aid rapid growth for the company over the long term.
Although valuations are expensive at 52x FY22E EPS (June year-end), which
imply limited near-term upside, two factors make PGHH an attractive long-term
core holding: (a) huge category growth potential in the Feminine Hygiene
segment (~67% of sales) coupled with potential for market share gains due to
considerable moats, and (b) huge potential margin gains from premiumization in
the Feminine Hygiene segment over the long term. Maintain
Neutral
with TP of
INR11,700 (50x Sep’22E EPS).
(INR m)
FY21 Var.
1QE (%)
8,862 13.9%
4.0
5,406.0
61.0
2,026 13.2%
11.2
22.9
135
10
90
1,971 15.0%
497
25.2
1,474 16.3%
7.7
16.6
Standalone - Quarterly Earnings
Y/E June
Net Sales
YoY Change (%)
Gross profit
Margin (%)
EBITDA
Growth
Margins (%)
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Adj PAT
YoY Change (%)
Margins (%)
E: MOFSL Estimates
Y/E June
1Q
8,521
7.6
5,190
60.9
1,822
-13.1
21.4
115
4
110
1,814
445
24.6
1,368
0.9
16.1
FY20
2Q
3Q
8,593 6,561
5.0
-6.2
5,381 4,371
62.6
66.6
1,867 1,384
-2.4
-3.6
21.7
21.1
115
118
22
24
90
145
1,820 1,388
461
371
25.3
29.0
1,359 1,016
9.5
12.8
15.8
15.5
4Q
1Q
6,345 10,095
-0.5
18.5
3,990 6,663
62.9
66.0
1,103 2,293
70.2
25.8
17.4
22.7
132
118
10
4
96
96
1,056 2,267
364
552
34.5
19.1
692 1,715
13.9
25.3
10.9
17.0
FY21
2QE
3QE
9,968 8,069
16.0
23.0
6,280 5,084
63.0
63.0
2,330 1,884
24.8
36.1
23.4
23.3
122
138
15
15
110
120
2,303 1,851
580
466
25.2
25.2
1,722 1,384
26.7
36.2
17.3
17.2
FY20
4QE
7,020
10.6
4,471
63.7
1,228
11.3
17.5
146
21
125
1,186
316
26.6
870
25.8
12.4
30,020
1.9
18,912
63.0
6,176
1.4
20.6
479
61
441
6,078
1,642
27.5
4,436
8.0
14.8
FY21E
35,152
17.1
22,497
64.0
7,733
25.2
22.0
524
55
451
7,606
2,072
25.2
5,691
28.3
16.2
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
14.0
-0.6
9.1
39.1
4.9
12.3
22.3
1.3
5.7
17.5
25.6
28.5
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
FY21
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
4Q
10.5
23.7
25.2
37.1
6.0
6.5
33.0
2.1
-10.0
43.6
-41.5
-2.3
-1.4
86.7
1Q
13.0
6.4
13.1
34.0
6.1
8.9
28.3
1.2
3.0
46.1
-13.7
49.9
-13.2
27.4
10 November 2020
2
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
Key exhibits
Exhibit 1: Reported net sales grew 18.5% YoY to INR10.1b
Sales (INR b)
Sales growth (%)
22.9 21.5
20.4
16.2
9.5
(0.9)
4.3
7.6 5.0
(6.2)
(0.5)
Exhibit 2: EBITDA grew 25.8% YoY to INR2.3b
EBITDA (INR b)
EBITDA growth (%)
70.2
(8.0) (4.8)
(36.0)
11.8
25.8
(9.0) (1.9)
(2.4) (3.6)
(22.8)(13.1)
18.5
7.0 5.7 5.2 7.9 8.2 7.0 6.4 8.5 8.6 6.6 6.3 10.1
2.1 1.5 0.8 2.1 1.9 1.4 0.6 1.8 1.9 1.4 1.1 2.3
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 3: Gross margins expanded 510bp YoY to 66%
Gross margin (%)
Exhibit 4: EBITDA margins increased 130bp YoY to 22.7%
EBITDA margin (%)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 5: As a % of sales, staff costs grew 120bp YoY, ad spends declined 330bp YoY, and
other expenses grew 590bp YoY
A&P spends as % of sales
Staff costs as % of sales
Other expenses as % of sales
19.8
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
33.6
4.2
11.0
22.3
4.9
12.3
23.3
5.0
12.6
26.5
7.7
11.4
33.0
6.0
6.5
28.3
6.1
8.9
Source: Company, MOFSL
Valuation and view
Happenings over the last 10 years
While PGHH delivered sales/EBITDA/PAT of ~20%/~14%/~12% CAGR in the first
half of the decade ending FY20, 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%/~10%/~8% CAGR.
Price cuts taken at the beginning of the decade, category development efforts,
and an increase in distribution led to EBITDA margin declining over FY10–14, but
sales and EBITDA are still growing at a healthy pace.
3
10 November 2020
 Motilal Oswal Financial Services
P&G Hygiene and Healthcare
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 7-8 quarters. While this yielded strong top line growth in
FY19 (20% sales growth), sales growth was tepid in FY20 at 1.9%, weighed down
by the slowdown in personal care categories.
Changes to the model have led to 4.8%/9.5% increase in EPS for FY21/FY22E We
are still assuming 17.1% sales growth for the year despite 18.5% growth in
1QFY21 and weaker base (v/s 1QFY21) as we await more evidence of the
sustenance of strong top line growth witnessed in 1QFY21.
As highlighted in our annual report
note
released last week, (a) increasing pace
of distribution expansion, (b) continuing strong pace of category development
efforts in schools to boost awareness and growth, (c) rising ad spends after a lull
in preceding years, (d) healthy pipeline of new products, (e) hastening consumer
entry into the category through launches at low price points, and (f) willingness
to take price cuts whenever required to boost growth, are all encouraging
developments that should aid rapid growth for the company over the long term.
Although valuations are expensive at 52x FY22E EPS (June year-end), which
imply limited near-term upside, two factors make PGHH an attractive long-term
core holding: (a) huge category growth potential in the Feminine Hygiene
segment (~67% of sales) coupled with potential for market share gains due to
considerable moats, and (b) huge potential margin gains from premiumization in
the Feminine Hygiene segment over the long term. Maintain
Neutral
with TP of
INR11,700 (50x Sep’22E EPS).
A key investment is the government considering price caps on Feminine Hygiene
products.
New
FY21E
35,152
7,733
5,691
FY22E
40,740
9,574
7,084
FY21E
32,733
7,430
5,429
Old
FY22E
37,614
8,802
6,466
Change
FY21E
FY22E
7.4%
8.3%
4.1%
8.8%
4.8%
9.5%
Source: Company, MOFSL
Max (x)
-1SD
Our view on the stock
Exhibit 6: We have raised our PAT forecasts by 4.8%/9.5% for FY21/FY22E
Change in Estimates
Net Sales
EBITDA
Adjusted PAT
Exhibit 7: PGHH P/E (x)
90.0
70.0
50.0
30.0
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
Avg (x)
+1SD
79.9
67.6
50.1
47.8
42.3
41.0
54.6
32.7
26.0
31.0
36.5
25.1
21.0
40.8
30.7
10.0
Source: Company, MOFSL
Source: Company, MOFSL
10 November 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
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
29,469
20.0
12,368
42.0
1,338
4.5
9,670
32.8
23,376
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
FY20
30,020
1.9
11,108
37.0
1,733
5.8
11,003
36.7
23,844
79.4
6,176
20.6
479
5,697
61
441
6,078
-105
5,973
1,642
27.5
4,331
4,436
8.0
14.8
FY21E
35,152
17.1
12,655
36.0
2,109
6.0
12,655
36.0
27,418
78.0
7,733
22.0
524
7,210
55
451
7,606
626
8,232
2,072
25.2
6,160
5,691
28.3
16.2
(INR m)
FY22E
40,740
15.9
14,667
36.0
2,241
5.5
14,259
35.0
31,166
76.5
9,574
23.5
579
8,995
55
526
9,466
0
9,466
2,383
25.2
7,084
7,084
24.5
17.4
(INR m)
FY22E
325
13,903
14,227
-358
15
13,884
5,430
3,079
2,350
0
200
0
25,366
2,456
2,456
17,452
3,002
14,032
6,759
711
6,562
11,334
13,884
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
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
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
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
FY20
325
11,254
11,579
-296
15
11,298
4,042
1,977
2,065
0
222
0
15,702
2,051
1,663
9,025
2,963
6,691
5,313
587
790
9,011
11,298
FY21E
325
12,486
12,811
-325
15
12,500
4,910
2,501
2,409
0
200
0
22,120
2,119
2,119
14,901
2,982
12,228
5,840
646
5,742
9,892
12,500
10 November 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
FY16
130.0
146.1
508.9
36.0
27.7
87.3
77.6
22.3
15.7
59.0
0.3
92.5
28.2
28.6
1.4
18
19
51
0.0
FY17
133.1
151.7
162.1
389.0
292.2
85.2
74.8
70.0
15.8
55.2
3.4
123.7
39.7
41.0
4.6
24
22
54
0.0
FY18
117.8
134.1
248.2
40.0
34.0
96.3
84.6
45.7
14.8
58.0
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
89.8
80.0
40.5
12.3
59.6
0.9
126.4
47.9
50.4
3.4
20
20
59
0.0
FY20
136.5
151.4
356.7
105.0
78.7
83.1
74.9
31.8
12.0
58.2
0.9
130.5
42.9
44.5
2.7
22
22
60
0.0
FY21E
175.1
191.5
394.7
151.8
80.0
64.8
59.2
28.7
10.1
45.7
1.3
321.5
46.7
48.2
2.8
22
22
60
0.0
FY22E
218.0
236.0
438.3
174.6
80.0
52.0
48.1
25.9
8.6
36.6
1.5
239.7
52.4
54.0
2.9
22
22
60
0.0
(INR m)
FY22E
9,466
579
-471
0
1,109
-2,383
8,300
-520
7,780
0
481
-39
0
0
-5,667
-55
12
-5,710
2,552
14,900
17,452
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
6,073
498
-317
54
172
-2,350
4,130
-28
4,102
-7
451
416
0
0
-3,131
-7
0
-3,137
1,409
3,996
5,405
FY20
5,939
479
-266
203
-179
-1,435
4,741
-503
4,237
22
1,268
786
0
0
-1,878
-12
-16
-1,906
3,620
5,405
9,025
FY21E
8,232
524
-396
0
4,995
-2,072
11,283
-846
10,437
0
411
-435
0
0
-4,928
-55
11
-4,972
5,875
9,025
14,900
10 November 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
10 November 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.
10 November 2020
8