Cipla sweetens on modest growth in quarterly earnings
Cipla surged 4.57% to Rs 180.75 at 10:21 IST on BSE, after the company posted a 6.07% rise in net profit to Rs 223.44 crore in Q3 December 2008 over Q3 December 2007.
Meanwhile, the BSE Sensex was down 23.22 points, or 0.26%, to 8,790.62.
On BSE, 92,560 shares were traded in the counter. The stock had an average daily volume of 2.20 lakh shares in the past one quarter.
The stock hit a high of Rs 181.80 and a low of Rs 175 during the day. The stock hit a 52-week high of Rs 243.55 on 28 August 2008 and a 52-week low of Rs 146.40 on 24 October 2008.
The large-cap stock had outperformed the market over the past one month till 22 January 2009, falling 6.52% as compared to the Sensex's decline of 13.08%. It had also outperformed the market in the past one quarter, falling 5.78% as compared to the Sensex's decline of 17.82%.
The company's current equity is Rs 155.45 crore. Face value per share is Rs 2.
The current price of Rs 180.75 discounts the company's Q3 December 2008 annualized EPS of Rs 11.50, by a PE multiple of 15.72.
Cipla's total income rose 22% to Rs 1360.48 crore in Q3 December 2008 over Q3 December 2007. The company unveiled the results after trading hours on Thursday, 22 January 2009.
The company has incurred a foreign exchange loss of Rs 42.63 crore for the quarter ended December 2008.
Cipla manufactures pharmaceutical products. The products of the company include anti-asthmatics, anti-cancer, anti-inflammatory, anti-depressant and other therapeutic index including animal health care products.
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Idea Cellular rings loud on robust Q3 financials
Idea Cellular advanced 3.21% to Rs 43.40 at 10:43 IST after the company reported 19.7% increase in net profit to Rs 284.01 crore in Q3 December 2008 over Q3 December 2007.
The company declared the results after market hours yesterday, 22 January 2009.
Meanwhile, the BSE Sensex was down 49.20 points, or 0.56%, to 8764.64.
On BSE, 4.29 lakh shares were traded in the counter. The scrip had an average daily volume of 14.20 lakh shares in the past one quarter.
The stock hit a high of Rs 44.80 and a low of Rs 43.10 so far during the day. The stock had a 52-week high of Rs 129.30 on 4 February 2008 and a 52-week low of Rs 34.05 on 27 October 2008.
The stock had underperformed the market over the past one month till 22 January 2009, falling 18.43% as compared to the Sensex's 11.23% fall. It had, however, outperformed the market in the past one quarter, falling 11.57% as compared to the Sensex's fall of 13.33%.
India's third largest listed GSM-led mobile operator by sales has an equity capital of Rs 3100.09 crore. Face value per share is Rs 10.
The current price of Rs 43.40 discounts its Q3 December 2008 annualised EPS of Rs 3.66, by a PE multiple of 11.85.
Idea Cellular's sales rose 52.5% to Rs 2604.47 crore in Q3 December 2008 over Q3 December 2007.
On a consolidated basis, Idea's net profit fell 7.3% to Rs 219.45 on a 59.7% increase in sales to Rs 2728.56 crore in Q3 December 2008 over Q3 December 2007.
Idea Cellular mentioned that its stake in Spice Communications stood at 41.09%, following purchase of shares held by MCorp Global Communications and completion of open offer to up to 20% equity stake in the company. Idea had announced the acquisition of Spice Communications in June 2008.
Aditya Birla group firm Idea Cellular is a wireless telecom services provider company,
Slowdown blues for FMCG companies
Sapna Agarwal / Mumbai January 22, 2009, 0:45 IST
Fast moving consumer goods companies may have a solid reason to feel worried: Sales volumes of soaps, detergent cakes and washing powder are dipping fast.
Two of these categories — detergent cakes and washing powder — account for around 15 per cent of the overall FMCG market of Rs 80,000 crore, according to estimates made by analysts.
Leading market research firm A C Nielsen’s data for November 2008 show an across-the-category drop in sales volumes compared to the preceding month. Compared to November last year also, sales have either declined or grew only marginally. For example, urban consumers have reduced their consumption of detergent cakes by 2.5 per cent in November this year compared to the year-ago period. Washing powder, however, is the worst-hit category, with sales volumes declining in both rural and urban areas. At an all-India level, the overall decline is 2.9 per cent.
Analysts are concerned. Nikhil Vora, managing director of brokerage firm SSKI Securities said besides being indicative of a slackening pace of growth, the slowdown in volumes could be due to price increases effected by FMCG companies during the year.
Consumers have also reacted adversely to the common practice of FMCG companies to reduce the per unit grammage (net weight) of products while trying to maintain popular price points.
Amita Shetye, director, Client Service, The Nielsen Company, said the slowdown is more acute in mass categories. "The premium segment has registered volume growth over last year for all the three categories despite price increases. However the grammage decline in the mass category has not gone down well with consumers.
CONSUMPTION IN VOLUMES OF SOAPS, DETERGENTS & WASHING POWDERS
Y-o-Y growth (%)
M-o-M growth (%)
Nov ’07 overNov ’06
Nov ’08 overNov ’07
Nov ’08 overOct ’08
TOILET SOAPS
All India (U+R)
1.8
1.0
-6.6
All India - Urban
2.6
4.0
-7.1
All India - Rural
1.0
-2.2
-6.1
WASHING POWDERS
All India (U+R)
-0.1
-2.9
-2.4
All India - Urban
0.9
-3.9
-2.0
All India - Rural
-1.0
-2.0
-2.7
DETERGENT CAKES
All India (U+R)
4.5
0.1
-5.6
All India - Urban
3.8
-2.5
-8.0
Source: AC Nielsen
All popular mass-category brands such as Lifebuoy, Lux, Godrej No.1 and Cinthol saw reduction in sales volumes in November compared to the preceding month. Hindustan Unilever's (HUL's) Lifebuoy and Lux, which have close to 20 per cent and 15 per cent market share in the toilet soap market, recorded a sales volume decline of 7 and 9 per cent each respectively. Similarly, Godrej Consumer Products (GCPL's) Godrej No 1 and Cinthol registered a month-on-month drop of 7 and 6 per cent respectively.
"The declining volumes in these key categories are a cause for concern," says Anand Shah, FMCG sector analyst with Angel Broking. "Companies are obviously worried and I won’t be surprised if FMCG companies start cutting prices now," he said. Earlier this month HUL had reduced the price of Lifebuoy by Re 1. India's largest FMCG player also reduced the prices of some of its detergents and soap brands in the mass segment. According to market sources, Marico and other FMCG players are also planning to either reduce prices or increase the net weight of their products.
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ITC: FMCG's a drag
Shobhana Subramanian / Mumbai January 20, 2009, 0:28 IST
The stock could get derated if FMCG losses continue to pile up.
ITC’s FMCG business continues to pull down its profits and a break even point for this segment could be quite some time away. The disappointing 11.5 per cent growth in FMCG revenues in the December 2008 quarter — way below the 30 per cent seen in the first half of the year — indicates that the cigarette major is finding it hard to take away share from incumbents in the personal care and snack foods spaces.
What’s more high marketing and brand-building spends are pushing up losses — up 95 per cent to Rs 127 crore in the December 2008 quarter.
These losses, together with a worse than expected fall in profits of 34 per cent from the hotels division, left the company with a net profit growth of just 8.6 per cent at Rs 903 crore. That’s despite the cigarettes business beating both price increases, and a ban on smoking in public places, to turn in a decent 11 per cent growth in the top line and 18 per cent at the segment profits level. Cigarette volumes however fell slightly. Nevertheless, the the net profit growth was better than the 3.5 per cent posted in the first half of 2008-09, which is why the stock slipped just about a per cent on Monday. Also, thanks to some checks on costs, the operating profit margin came in slightly higher at around 36 per cent y-o-y. In the September 2008 quarter, the opm had slipped 240 basis points.
The hotels business is unlikely to pick up soon and the personal care and snacks food ventures could see bigger losses before they turn around. As such, the Rs 13,947 crore ITC is likely to end 2008-09 with revenues higher by about 14 -15 per cent and a single-digit increase in the earning per share (eps) just short of Rs 9.
Analysts point out that with nearly 80 per cent of capital employed in hotels, paper, the loss-making FMCG, and the non- value adding agri-trading businesses, the stock does not deserve a valuation of 17 times estimated 2009-10 earnings.
RETAIL:A BOON OR BANE FOR FMCG COMPANIES.
Retail sector is one of the most growing sector of present time. The increasing trend of huge urbanization and modernization encourage the growth of retail in a peak level. In those days, everyone interested to go for a retail store like big bazaar, subiksha or vishal mega mart in place of going for traditional markets. As the income level of consumers increasing, the trend of going for retail store is also increasing.
If we carefully observe, then we will find that more than 90% products sold in the retail store are FMCG products. Basically, the consumers gose to the retail stores for buying FMCG products. Now, everybody are thinking that retail stores are path finder of the FMCG products. Somewhere we can also say that retail ssector is like a boon for the FMCG.
But after a careful survey, I have find that there is a different story behind it. In the some sence , we can say that the increasing trend of retail is not a boon but it is like a bane for the FMCG sector. It may be like a silly comment but there is a permanent reality behind this statement. The most of the retailers like Kishore Biyani takes on the FMCG companies, mostly MNC’s in the price war that has been brewing between retailers and consumer companies. Biyani is asking retailers to build their own brands , private levels, and own distribution network. He is doing so himself: private levels, Biyani says, would become his core business and that he would use his logistic form, future logistics, to take on the FMCG companies.
Marketing and distribution cost for the volume-driven business of the consumer products are typically very high. FMCG companies distribution reduces margines on a product because of how it is structured: from manufacturer to distributor to wholesaler, and finally to store. So big bazaar, instead of selling Pepsi’s Frito Lays and Cadbury’s, chose to market its own label.
Low store sales may be forcing retailers to bank on private labels to improve margines. Besides, private labels do not incure any significant marketing costs, unlike products may be FMCG companies. “But this is only makes sanse in the long run, when more people will take to using retail stores for all purchasers.
The battle has the making of a classic David versus Goliath saga, but global FMCG brands have become brands largely through an enormous amount of investment and spending on marketing, advertising, and distribution.
Biyani works with over 120 vendors for his private level business and caters to a variety of household goods. ”we also have over 4 million sq. ft of logistic space to support our private label business” he added.
It is the whole story of the retail sector of India. So it is totally depand on the future that what will happand tomorrow? Can the splash that that Biyani made with his call be the first step on the way to making ‘future brands ‘ an FMCG company.
CEO: - AN EVERGREEN PACKAGE
Everybody knows about the evergreen tree, it is a tree which contains leaves an flowers in al seasons. I think that there is a similar relation between the evergreen tree and a salary package/remuneration of a CEO of a company. In any period of economy, the salary of CEO remains unchanged. It is evergreen in any period.
The present time is very tough time for the whole business world. There is recession and financial cricies spread everywhere. In this time such a large company like LEHMAN BROTHER and some others has been bankrupted. Many of the MNC’c goes on to losses, they have no money to provide salary to there employees. As the result , the companies starting to fire the employees all the world. Such a reputed company like kingfisher and Ford motors terminates thousand of their employees. The all the door are closed for fresher in the companies.
As given above about the financial conditions about the companies. They terminate their employees due to lack of more money, losses, financial cricies etc. But if we look upon the remuneration package of the CEO’s and other official’s of the companies, we will find a different situation. If we left some of the CEO’s, we will find that every CEO of the big company takes remuneration much more than it require.
After taking the example of remuneration of some famous business personalities we will find the story behind the screen. Mukesh Ambani takes home Rs. 44.02 crore as his remuneration, which is 1000 times more than an average worker’s compensation. Sun TV’s Kalanithi Maran takes 32.41 crore as his salary. In this race, small Ambani is not more far from his elder brother Mukesh and takes Rs. 30.03 crore as his remuneration.Malvinder Mohan Sing of Ranbaxy, takes Rs. 19-58 core , S.B. Mittal of Airtel takes Rs. 19.555 crore, Nveen Jindal(jindal steel) – Rs. 16-83 crore, Sajjan Jindal (JSW steel) – Rs. 16.73 crore Pawan Munjal (Hero Honda)- 15.73 crore, and Onkar S. Kanwar of Cadila healthcare takes Rs. 15.43 crore are the India’s top 10 highest paid CEO’S. There remunerations are about as 500 times more than the salary of an average worker. The highest paid CEO of US in 2007 was Larry Ellison of Oracle Corporation at $ 230 million. In 2007, the top highest paid CEO of US takes home a combined compensation of $ 673 million. The average annual compensation for fortunes top 384 companies among its 500 top companies are $ 10.8 million in 2007 that was more than 345 times of an average US worker.
It is not limited to India and US. It s the condition of whole world. CEO’s in Japan and Germany takes home about 11 or 12 times the compensation paid to the median workers in those countries. The number in the France is 15 times.
This is the whole story about the remuneration of the top most CEO’s of the world. One side they said that they have no mony to pay for the salary to the employees and terminate them, but on the other side, they take unbelievable remuneration for themselves.
Inspite of all of these, there are some great CEO’s are remain who has scarifies their salary for maintaining the balance in salary package for their employees. Steve Jobs of Apple Inc. continues to take $1 as his salary; same strategy has been adopted by Robert Nardilli and Chrysler. In India, Dilip Sanghvi of Sun farma takes only 1.12 crore as his salary followed by Glen Saldhner of Glenmark farma(Rs.1.74 crore) and T.V. Ramanathan of Exide Industries(Rs.1.42 crore) . Excluding them, there are also some other personalities like, P.J.Nayak of Axis bank, Rahul Patel of Syntex, Uday Kotak, Bhaskar Bhatt, and Ajim H.Premjee has takes reasonable salary package.
If we look of the figures of these low lower incomes CEO’s we will find that this figure is 1/10 of all over the CEO of the world, which is so small. So, now some questions arises that are – Is this figure is sufficient?, Who is responsible for job cuttings-recession or the highest remuneration of CEO’s? I like to get answers of these questions from you.
At last I am not going to give many suggestions or advice. I just want to request our govt./company low board to making of a certain limit for the maximum remuneration or salary of a CEO of a company.
THANK YOU…………………………
PRAVIN TRIPATHI
PGDM 1ST YEAR
INSTITUTE OF MANAGEMENT EDUCATION.
GHAZIABAD
E-mail ID—pravin0072008@indiatimes.com
Pravintripathi64@yahoo.co.in
There was a time when the FMCG companies ignores rural market, they took no any interest to produced or sell products in rural market in India. It was the initial stage of FMCG companies in India. As per as the time had passed, the strategy and marketing style of FMCG companies had been changed.
Background of the study:-
In 1970, Nirma was the first FMCG Company to initiate and produced goods according to rural consumers. In the early 1970s, when Nirma washing powder was introduced in the low-income market, Hindustan Lever Limited reacted in a way typical of many multinational companies. However, Nirma’s entry changed the whole Indian FMCG scene .It became a great success story and laid the roadmap for others to follow. MNC’s like HLL, which were sitting pretty till then, woke up to new market realities and noticed the latent rural potential of India. 1983, C K Ranganathan started selling shampoos in a sachet with an investment of Rs 15,000 and dared to take on the multinationals, Lever and P&G, the unquestioned leaders in that segment. . He targeted rural and small-town consumers who used soaps to wash their hair. He introduced the sachet at 90 paise and then reduced it to 50-paise. And that’s when the multinationals sat up and noticed him.Sales zoomed from 35,000 sachets to 12 lakhs. Initally they took any sachet, but after three months they restricted to Chik sachets.
Now at the present time, rural market is one of the best opportunity and focusing sector for the major FMCG companies in India. Each and every company is set to invest a huge capital for competition in rural market. According to the Federation of Indian Chambers of Commerce and Industry, the number of rural households using FMCG products has grown from 136 million in 2004 to 143 million in 2007, a clear indication that rural consumers are shifting from commodities to branded products. Urban consumers, on other hand, could go slow on FMCG expenses, thanks for inflation spiral, rise in fuel cost and costlier credit. Evidence suggests that for the first time, the rural market has grown faster than the urban market in key product categories in April-May 2008, the latest months for which such information is available, according to market research firm AC Nielsen.
Need for the Study:-
In those days, the rural market is the one of the best opportunity for the FMCG sector in the India. It is more wide and less competitive market for the FMCG. As the income level of the rural consumers increasing, the demand of FMCG is increasing continuously. The various need of the study is given as follows:-
Ø To determine the raising demand of FMCG products in rural area.
Ø Know about the different choices of rural consumers.
Ø
Definition of the Problem:-
The study of opportunity for FMCG products in the rural market is a sum total of different analytical survey of different FMCG products in the rural area. In one sense, we can say that it is determination of how much market captured by different FMCG companies.
Scope of study:-
With a population of 1 bn people, India is a big market for FMCG companies. Around 70% of the total households in India reside in the rural areas. The total number of rural households is expected to rise from 135 m in 2002 to 153 m in 2010, which represents the largest potential market in the world.
Rural and urban potential
Urban
Rural
Population 2001-02 (m household)
53
135
Population 2009-10 (m household)
69
153
% Distribution (2001-02)
28
72
Market (Towns/Villages)
3,768
627,000
Source: Statistical Outline of India (2001-02), NCAER
An average Indian spends around 40% of his income on groceries and 8% on personal care products. A larger part of the total spending pie along with a large base (in terms of population) makes India one of the largest FMCG markets.
Changing lifestyles: Rising per capita income, increased literacy and rapid urbanisation have caused rapid growth and change in demand patterns. The rising aspiration levels, increase in spending power has led to a change in the consumption pattern .
Low penetration and low per capita consumption: Due to the large size of the market, penetration level in most product categories like jams, toothpaste, skin care, hair wash etc. in India is low. This is more visible when comparison is done between the rural and the urban areas. The average consumption by rural households is much lower than their urban counterparts. Existence of unsaturated markets provides an excellent opportunity for the industry players in the form of a vastly untapped market as the income rises.
Rural market shows a good improvement. In the presence of some product categories like, toilet soap, detergent bar, washing powder etc, it is same as in the urban level. Rural market is also improving in the other products category