India Consumer Off the Shelf. :: JPMorgan

Key developments in the Indian Consumer space over the past month include:
 New Product Launches: 1) Premiumisation push remains strong in oral
care space with GSK introducing another premium variant of its leading
toothpaste brand Sensodyne, Repair & Protect priced at a 35-60% premium
to other variants, 2) ITC continues to expand its personal care portfolio with
the introduction of an advanced skin care range under the Vivel Cell Renew
brand, 3) HUL’s focus on expanding the premium range of skin care
products continued with the recent launch of Ponds white beauty BB+ allin-
one fairness cream, 4) Pepsico launched its second mainstream cola
brand, Atom, exclusively created for the Indian market and likely positioned
to compete with Coca-Cola’s brand Thums Up, 5) P&G introduced a new
laundry variant, Ariel colour & style, and 6) L’Oreal expanded its mid-end
hair-care range with launch of Garnier Fructis Goodbye Damage range of
products, inc. shampoos, conditioners and serums.

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 Pricing Actions: 1) P&G is running promotional offers for its leading
shampoo brand Pantene offering ~15% price reductions, 2) HUL introduced
more affordable SKU for its leading ketchup brand Kissan, at Rs15/90gm.
 Global read-through: 1) L’Oreal registered healthy 17% LTL sales growth
for its India operations in Q1CY13, 2) Pernod Ricard registered 17%
organic sales growth for its India operations for the 9 months ending Mar’13
led by strong value growth and continued market-share gains in the premium
segment, 3) SAB Miller (second-largest beer player in India) registered 20%
volume growth in India in FY13 (yr ending Mar’13) ahead of estimated
industry growth of 13% driven by sustained focus on key states.
 Key commodity trends. Crude Oil price was flat m/m, while palm oil
price declined -2% m/m. PFAD prices increased 13% m/m. Domestic wheat
prices were up 2% m/m while sugar prices were down -1% m/m. Domestic
LAB prices and HDPE prices declined -2% m/m.
 Performance and Stock picks. Over the past month, the BSE FMCG Index
was up 14.5%, outperforming the BSE Sensex by 7%. HUL, United Spirits,
Dabur and ITC were up 22%, 19%, 16% and 15%, respectively. We have
OW ratings on ITC, Dabur, GCPL and UNSP.