Today, with the Best Indian Companies to Invest In (BICII) series, I am introducing another Indian monopoly major, Procter and Gamble, a fully owned Indian subsidiary of the Procter and Gamble Company,US, known in India as P&G Hygiene and Health care Ltd. P&G have decade of experience in Indian market with number of popular brands. The specialty of P&G is, the company is not over diversified in the product side but, have focused with products that got huge attention in Indian market all the time.
Company and Product Analysis
“In historical terms Procter & Gamble’s relationship with India dates back to when Vicks Product Inc. India, a branch of Vicks Product Inc. USA established in 1951, was engaged in the manufacture (under loan license) and sale of what is today India’s Number One Health Care brand – the famous range of VICKS products”.
In 1985, the name P&G originally appeared in India with an affiliation with previous company and starts its operation with its own name. within that time, Indian market totally influenced by their most famous brand ‘Vicks’ and 1989 they have launched the classic feminine product ‘Whisper’. On 1991 it again launched Ariel detergent, was the most famous at the time.P&G started manufacturing Vicks and Whisper through its factories at Goa and coming years, they have launched variants of Vicks like vicks Plus and Vicks Action 500 etc. P&G is the only company in India offered Money Back guarantee to a consumer product, when they offered the same for Whisper, for its female customers. They became very popular with its child health product ‘Vicks VepoRub’ providing relief from multi-symptom like cold, cough, blocked nose, body pain and head ache’s on children.On October 2005, Vicks celebrated Golden Jubilee of 50 years after its first launch and then launched New Vicks Formula 44 a unique, safe cough syrup to the Indian market. P&G enjoys superior monopoly with above products and till today, Indian market never seen a product that match to Vicks. It is a clear monopoly business and yes, the same what we where looking to invest on a company. Thus, P&G took a place with our list of wonderful Indian companies to invest through value investing criteria.
If we dig a little in the net, will come to know the best description about the company “P&G Hygiene and Health Care Limited is one of India’s fastest growing Fast Moving Consumer Goods Companies that has in its portfolio P&G’s Billion dollar brands such as Vicks & Whisper. With a turnover of Rs. 500+ crores, the Company has carved a reputation for delivering high quality, value-added products to meet the needs of consumers.”
Its subsidiary called P&G Home Products also have numerous products ranging from Ariel, Tide, Pantene Pro V, Head and Shoulders, Pampers etc. Pamper is the famous word when kids wear coming to the picture. Head & Shoulders considered as world’s largest selling anti-dandruff shampoo and Pantene is world’s No. 1 beauty shampoo with and Rejoice, Asia’s No. 1 shampoo.
P&G Home Products Limited is a 100% subsidiary of The Procter & Gamble Company, USA, that in India, has carved a reputation for delivering superior quality, value-added products to meet the needs of consumers.
Investment Suitability Analysis
For a value investor, P&G is an excellent pick by considering its ability to meet first value investing criteria ‘Monopoly Business and Products’. To meet the most important criteria, Debt part, P&G is a company with Zero debt for years. P&G has an excellent management team to lead the company to new heights and able to sustain its leadership position in the market by taking time to time innovations.Considering its present per share earnings of 47.54 with price of Rs. 920, as on the end of June 2009, P&G providing an initial rate of return of 5.17% if you buy now. It is wise, waiting to reach the stock price between Rs. 670 to 720 to buy and get an initial rate of return of 7%. With its defensive nature, an investor should wait patiently, to buy this fantastic business when reach to the right price.When look into the profit side, P&G recording considerable year to year growth on Sales, net profit and Per Share Earning. As a debt free company, it is a good dividend candidate too, to enjoy timely returns from your investments.All over considering the business and performance, P&G is a right value investing candidate if one buy the stock in the right price, as mentioned above.I hope you have enjoyed the report and appreciated if you give your valuable comments and suggestions.