Britannia Industries is the Market Leader in the Biscuit Market and holds a share of 33% in the Market. HUL is the largest soap maker in India. Nestle holds 97% Market Share in Nestle Cerlac and Dabur India enjoys 40% Market Share in the Market in its Dabur Honey Product.
The Fast-moving Consumer Goods (FMCG) Industry is mainly responsible for producing, distributing and marketing Fast-moving Consumer Goods. FMCG Sector is the 4th largest sector of the Indian Economy. Most commonly sold FMCG Products include - Toiletries, Cosmetics, Household Products, Electronic Goods and Packaged Food.
Since the Sector encompasses a diverse range of Products, different Companies dominate the Market in various sub-sectors. However, some of the top FMCG companies in India are - Nestle India, Hindustan Unilever Limited, Britannia Industries, Dabur India, Godrej Consumer Products Limited and Marico
These Companies hold good Market Share in different Product Segments.
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Key Financial Parameters to See
(i) Net Sales
![10 year sales growth of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/Net-Sales-PEERS.png)
- Britannia Industries Revenue grew at a CAGR of 12% over last 10 years.
- On the other hand, over the last 10 years Revenue of Dabur India and Godrej Consumer Products grew at CAGR of 10% and 17% respectively.
- Revenue of both Nestle India's and Hindustan Unilever grew at a CAGR of 8% over past 10 Fiscal years, which is relatively low among their Peer Group Companies.
(ii) Profit After Tax
![10 year PAT growth of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/PAT-PEER-1.png)
- Over the past 10 years, Nestle India's Profit grew at a CAGR of 10%.
- PAT of HUL and Dabur India has grown at CAGR of 12% and 11% respectively over the past 10 Fiscal years.
- Britannia Industries has shown a good PAT Growth over the last 10 years. Britannia's PAT grew at CAGR of 30%.
- On the other hand, Godrej Consumer Products' PAT grew at a CAGR of 16% in the last 10 Years.
(iii) ROCE
![10 year ROCE growth of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/ROCE-of-all-FMCG-companies.png)
![10 year ROCE trend of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/ROCE-trend-analysis-of-FMCG-companies.png)
All the Top 5 FMCG Companies have been maintaining healthy ROCE over last 5 Fiscal Years.
Nestle's ROCE increased from 28.70% in 2015 to 55.06% in the year 2020, showing a good growth. HUL retained its ROCE growth from last 2 years. Britannia Industries' ROCE decreased to 37.12% in 2020 from 81.56% in 2015.
On the other hand, both Dabur India and Godrej have shown a moderate ROCE growth over last 5 years.
(iv) PBIDTM %
![10 year EBITDA growth of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/PBITM-copy.png)
![10 year EBITDA trends of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/PBIDTM-PEERS.png)
PBIDT Margin of Nestle India has shown a moderate growth in last 5 years i.e. from 19.96% in 2015 to 25.07% in 2020. HUL's PBIDT Margin grew to 22.92% in 2020 from 17.64% in 2015, showing a moderate growth.
Britannia Industries PBIDTM% has grown from 11.86% in 2015 to 17.34% in 2020, showing a good growth. On the other hand, Dabur India and Godrej have shown an average PBIDTM% growth from the year 2015 to 2020.
(v) PATM %
![10 year PAT growth of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/PATM-PPERS.png)
![10 year PAT trend of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/PATM-peers.png)
Nestle India has shown a good PAT Margin growth over last 5 Fiscal years i.e. from 6.64% in 2015 to 15.60% in 2020. HUL's PAT Margin grew at moderate level in the last 5 years. Britannia Industries PAT Margin has grown to 11.38% in the year 2020 from 8.58% in 2015, showing a good growth.
Dabur India has been maintaining its PATM% over the last 4-5 years. On the other hand, Godrej has shown a volatile growth in its PAT Margin from the year 2015 to 2020.
(vi) Free Cash Flow/Net Sales
![10 year Free cash flow growth of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/FCF-PEERS.png)
![10 year Free cash flow trend of Nestle HUL Britannia Dabur and Godrej](https://blog.pawealth.in/wp-content/uploads/2021/04/FSF-PEERS.png)
This Ratio indicates how much of a Company's Revenue is transformed into Free Cash. A higher FCF to Sales ratio is always better, as it indicates a greater capacity of a Company to turn Sales into Cash.
In the year 2020, HUL maintains high FCF to Sales Ratio as compared to its Peer Group Companies i.e. 16.99%. On the other hand, Nestle India's FCF/Net Sales stands at 14.80% in the year 2020.
In the F.Y. 2019-20, FCF to Net Sales Ratio of Godrej and Dabur India stand at 14.49% and 13.77% respectively. On the other hand, Britannia's FCF/Net Sales ratio for the year 2020 is 10.69%, which is relatively low as compared to its Peer Group Companies.
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References: Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry's Publications.
Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.