FMCG
May 12, 2013
The paint and dye stuff is a segment in the broacd chemical industry. The industry in itself has experienced some major growth in recent years. The […]
March 4, 2013
About Wrigleys The William Wrigley Jr. Company needs no introduction of its own. Every day we come across several of the products manufactured and marketed by […]
February 1, 2013
Packaging Industry The packaging industry will register strong earnings growth driven by buoyant end-user demand. If we take the historical data and compare the performance of […]
June 24, 2012
ITC which is a subsidiary of BAT is India's largest producer of tobacco products and has almost a monopoly position in the manfacture of cigarettes. Using its massive cash flows from the ever prospering tobacco business, the company has diversified into a number of other business segments like retail, agro industry, hotels , paper etc. The company has become one of India's biggest consumer companies using tobacco profits to extend its Indian empire. Lack of government action on tobacco has made it the biggest Indian company However the biggest source of revenue and profits continue to be the cigarrete segment which kills thousands of Indians each year.
October 11, 2011
Sugar is produced by pressing out the juice from sugarcane & then boiling it into crystals. This process was developed in India around 500 BC. The sugarcane cultivation is believed to have originated in New Guinea, and was spread along routes to Southeast Asia and India. Brazil and India are the largest producer and producer-consumer of sugar respectively. India is the second largest producer of sugarcane next to Brazil. In 2008, the production in Brazil was 645,300,182 tonnes & India was 348,187,900 tonnes. India contributes about 12% of world sugar production and has annual sugar production capacity of 23 million tonnes with a total investment of $11000 million. Presently, about 4 million hectares of land is under sugarcane production. The average yield is around 70 tonnes per hectare. India now has 453 working sugar factories with an average capacity of 3500 TCD (tonnes crushed per day). There has been an increase in the volume of free international trade in sugar, which provides an excellent means of increasing exports. In India over 45 million tonnes of sugar is being traded each year. Sugar production is not the only business of the Indian industry, but it also has a diversified business of power generation and ethanol production. The country has been producing about 1.7 billion liters of alcohol utilizing 75-80% molasses, which is a by-product of sugar production in the country. In 1993, Molasses and alcohol-based industries were decontrolled, but currently are being controlled by state governments.
July 6, 2011
The Indian food processing industry can be broadly divided into segments like dairy products, meat, poultry & fishes, processed fruits & vegetables, cereals, beverages & confectionery. The demand of processed food is rapidly increasing in the Indian scenario. India is one of the fastest growing economies in the world, this growth is driving income levels to unprecedented levels across all strata’s of society, which has led to high demand of food & a change in the eating habits of people. Also processed food is convenient food, that one can easily have in today's busy life. The increase in the number of retail food outlets & shopping malls are also a major reason why there has been a gradual shift from the traditionally cooked food to packaged food. The Indian food processing industry was the seventh largest sector attracting foreign direct investment. The beverage industry is a major driver of economic growth. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2.1. This means that if one unit of output of beverage is increased, the direct and indirect effect on the economy will be twice of that.Note most of the FMCG Companies in India are involved in Food Processing as well or are expanding into that area given the massive growth in the future.
July 5, 2011
The hair care industry has grown a lot in the recent years. The reason can be attributed to the fact that a large portion of our Indian population is using higher quality branded products. Of the estimated Rs.1, 611 billion FMCG market in India, hair care products make up approximately Rs.91.5 billion, or 8%, of the total according the Nielsen Retail Audit Report. The 14% growth rate in the hair care industry is also slightly higher than the overall industry average of 13.4%. Shampoo and hair oils, including coconut oils, continue to be the key components of this segment. The marketing startegy of rural distribution campaigns adopted by the hair oil manufacturers and dealers have helped to greatly expand the geographic coverage of hair oil products into the rural parts of the country. In addition, average prices for hair oil products have risen from Rs. 22.25 per 100 ml in 2008 to Rs.23.74 per 100 ml in 2009 according to the Nielsen Retail Audit Report.
July 5, 2011
Water Purifying Industry in India is growing by leaps and bounds and has attracted a host of new entrants which are consumer giants.Earlier the field used to be dominated by Eureka Forbes which operated in the premium segment and focused on urban India alone.But with income increasing and people realizing the importance of clean water,other companies have entered the Water Purifying Industry.HLL and the Tata Group have introduced products for the lower segment of the market in the price range o f Rs 1000 as compared to the Rs 5-10,000 wafer filters by the incumbent Eureka Forbes.This has forced other companies to come with lower priced products as well.With the vast majority of Indians forced to go without tapped water leave alone treated water,this industry is set to grow in double digits for a long time.Water Treatment Companies too are growing rapidly as the Water Purification at the Municipal,Industrial Level is getting importance.
The above companies are the suppliers of the best wafer purifiers in India.Its tough to make a call on the best as it depends a lot on the nature of the water and price.However Kent and Eureka Forbes are generaly considered the best brands of water filters in India due to their products,after sales service and product range.In the lower priced band,Pureit is considered as good bet especially for rural India where the purchasing power is not that high.
July 5, 2011
In early days, painting your home would mean buying paint and putting it on the walls without worrying about anything else but in today's world, Painting would just not mean simply coloring your house. It comes with a long list of added functionality, which makes it even more better. The modern day paints have additional functions like - Being Very durable, Glow finish, Covering hairline cracks, Fighting fungus, Giving a rich sheen, Dirt Resistance, keeps your home u cool, repelling water, water proof, extra tough, glossy finish for metals & many more.
April 22, 2011
Future Ventures is a VC/Private Equity Company that has invested in a number of small Indian companies and startups mainly focused on the consumption industry in India.With India growing at around 8-9% in the last few years and expectations of strong future growth driven by consumption,Future Ventures seems a good investment considering the portfolio of companies that it owns (analyzed below).Future Ventures is a part of the Future Group run by Kishore Biyani who started India's most famous retail company Pantaloons.The Company has set a price band of 10-11 rupees a share with a target of raising around Rs. 750crore though the IPO.This would represent around 40% of the equity which would give it a post IPO market capitalization of around $375 million.Note the company had tried to come with an IPO 2 years ago but it was deemed to expensive at that time.
March 4, 2011
Corruption in India seems to be throwing up a new character everyday with almost all the major institutions - judiciary,executive,corporates,bureaucrats,media being tainted by it.The latest to join the corruption bandwagon is the US Food MNC Kraft specifically its subsidiary Cadbury.Note Carbury is one the biggest chocolate brands in India and has been present in the Indian market for a long time.The Corruption Charges are said to be in minor in nature as SEC is probing whether Cadbury gave bribes to set up a manufacturing plant in India.I would be surprised if they managed to set up a plant in India without giving a bribe.India's bureaucrats are notoriously corrupt and the venality has only increased despite numerous scams and scandals being exposed.
January 25, 2011
Inflation in India is raging at double digit levels as it is in most of the other countries in Asia.While Food Inflation has been hogging the headlines as Onion Prices become costlier than the daily earnings of the majority of Indians,other commodities are becoming expensive as well.Tyre Companies in India have seen their margins and profits collapse on the back of higher natural rubber prices.This is despite the explosive growth being seen in the automobile sector in India.JK Tyres and Ceat reported their quarter results and both were equally bad with stock prices taking a major hit.Consumer giant HLL which is a subsidiary of the Unilever Group and the largest consumer company in India also saw its stock price tumble.HLL too has been hurt by higher input commodity costs.While volume growth was excellent,the margins got compressed as input prices increased faster than output prices.Note the Indian stock market has fallen more than 10% of its peak even as developed markets are seeing higher peaks.Other Asian markets like Indonesia,Thailand and others too have fallen as high inflation hurts the prospects of companies here.The Central Bank in India RBI raised the intrest rates by 25 bps which some consider as too low.Like other central banks in Asia,India too seems helpless to fight the inflationary pressures brought upon by the higher commodity prices fueled by Bernake money printing.
December 4, 2010
Ravi Kumar Distilleries (RKDL) is another low quality company coming out with an IPO to take advantage of the current bullish conditions of the Indian Stock Market.It is not the first junk IPO nor is going to be the last ,it is an addition to the list of low quality companies which have given huge losses to investor unfortunate enough to subscrible.Note more than 50% of the companies coming out with an IPO over the last year are trading well below issue price.Recent Stock Market Scandals show the complicity of market operators,shady promoters and compromised financial institutions.Note the other recent IPOs by the investment banker for RKDL IPO have resulted in massive losses for investors.It would take a miracle for this one to prove a success.Ravi Kumar Distilleries (RKDL), plans to raise Rs 74 crore through its Initial Public Offer (IPO) and has fixed the price-band at between Rs 56-64 per share for the issue.Here are some of the main features of the IPO
August 2, 2010
The FMCG industry in India is currently trading mostly in the 25-35x range so the company is pricing itself at 25x which makes sense considering that it is a small company with just 1 product.The success of its new products is still open to question and most of the money will be spent of promoting these products.At 25x,the company is not leaving much on the table for investors considering that its new product ventures are risky considering the strong competition in the Indian FMCG market.Though the stock is much better than the junk being offering in the Indian market,I would still give this IPO a miss as their are better options available in the Indian FMCG sector