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India Equity Research Reports, IPO and Stock News
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Key developments in Indian consumer space over the past month:
Price hikes. 1) There were more price increases in the laundry segment, with
HUL hiking prices by 3-6% for its Rin and Surf Excel brands and Rohit
Surfactants raising prices by 4-8% for its popular detergent brand, Ghadi, over
the past month; 2) ITC put a 10% price increase on its premium cigarette brand
Classic (we estimate ~3% vol share), 3) Nestlé India continued with price
increases, undertaking price hikes (3-7%) across some SKUs for baby foods,
coffee and dairy whitener, 4) GSK Consumer undertook 2.3% wtd average
price increase across its portfolio, following a ~5% increase about nine months
ago.
New product launches. 1) Dabur expanded its beverages portfolio with the
launch of carbonated fruit-based drink Burrst Fiz; 2) Emami forayed into the
glucose drinks market with the trial marketing of Zandu Glucose Charge in
select markets; and 3) AgroTech Foods entered the ready-to-eat food segment
with the launch of Sundrop 10-minute Yummeals in key metro cities.
Danone to move into the India baby foods market. Danone has signed an
agreement with Wockhardt to acquire its nutrition business and thus enter the
baby/medical nutrition markets in India. Wockhardt’s nutrition brands include
Dexolac, Farex, Nusobee and Protinex. Danone is trying to enhance its presence
(in terms of product categories and geographical reach) in India. This acquisition
is likely to provide Danone with access to a wider distribution network.
Monsoon Watch. Monsoon rainfall trends were weak over the past month.
Cumulative rainfall over June 1-August 3 is 6% below normal with normal rains
across most of India (excluding some parts of North and North Eastern regions).
Area sown under all kharif crops so far has been flat y/y.
Key commodity trends. Crude declined sharply by 20% m/m implying relief
for most FMCG companies as packaging costs and prices for crude-derivatives
may likely soften with a lag effect if this trend sustains. HUL and Dabur have
higher exposure to crude/energy related raw materials in our coverage universe.
While domestic wheat prices were down 3% m/m, sugar prices were relatively
flat. There was a significant decline in cotton prices (-11% m/m).
Performance and Valuation. Over the past month, the BSE FMCG Index was
down 4%, outperforming the Sensex by 6%. ITC and Marico were better
performers, up 0.4% and up 2.2%, respectively.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key developments in Indian consumer space over the past month:
Price hikes. 1) There were more price increases in the laundry segment, with
HUL hiking prices by 3-6% for its Rin and Surf Excel brands and Rohit
Surfactants raising prices by 4-8% for its popular detergent brand, Ghadi, over
the past month; 2) ITC put a 10% price increase on its premium cigarette brand
Classic (we estimate ~3% vol share), 3) Nestlé India continued with price
increases, undertaking price hikes (3-7%) across some SKUs for baby foods,
coffee and dairy whitener, 4) GSK Consumer undertook 2.3% wtd average
price increase across its portfolio, following a ~5% increase about nine months
ago.
New product launches. 1) Dabur expanded its beverages portfolio with the
launch of carbonated fruit-based drink Burrst Fiz; 2) Emami forayed into the
glucose drinks market with the trial marketing of Zandu Glucose Charge in
select markets; and 3) AgroTech Foods entered the ready-to-eat food segment
with the launch of Sundrop 10-minute Yummeals in key metro cities.
Danone to move into the India baby foods market. Danone has signed an
agreement with Wockhardt to acquire its nutrition business and thus enter the
baby/medical nutrition markets in India. Wockhardt’s nutrition brands include
Dexolac, Farex, Nusobee and Protinex. Danone is trying to enhance its presence
(in terms of product categories and geographical reach) in India. This acquisition
is likely to provide Danone with access to a wider distribution network.
Monsoon Watch. Monsoon rainfall trends were weak over the past month.
Cumulative rainfall over June 1-August 3 is 6% below normal with normal rains
across most of India (excluding some parts of North and North Eastern regions).
Area sown under all kharif crops so far has been flat y/y.
Key commodity trends. Crude declined sharply by 20% m/m implying relief
for most FMCG companies as packaging costs and prices for crude-derivatives
may likely soften with a lag effect if this trend sustains. HUL and Dabur have
higher exposure to crude/energy related raw materials in our coverage universe.
While domestic wheat prices were down 3% m/m, sugar prices were relatively
flat. There was a significant decline in cotton prices (-11% m/m).
Performance and Valuation. Over the past month, the BSE FMCG Index was
down 4%, outperforming the Sensex by 6%. ITC and Marico were better
performers, up 0.4% and up 2.2%, respectively.
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