BACKGROUND

Set up in Nov 2000. Currently has manufacturing facilities at Malanpur, Baddi, Guwahati. Have over 18,000 employees Over 100 manufacturing units GSL was changed to GIL in april2,2001 350 million people across India use Godrej products

SWOT ANALYSIS

STRENGTHS
Ownership of strong brands- toilet soap segment contributes almost 59% to its net sales Unique VFM proposition-Value For Money (VFM) strategy gives godrej added advantage over its peers

Continues increase in market share in soap segment and overall market as well

Source: Company & Khandwala Research

Increase in the market share in hair colour category

Source: Company & Khandwala Research

WEAKNESS
Seasonality of its liquid detergent products-EZEE enjoys 84% market share

OPPORTUNITIES
Narrow the gap between godrej and market leader in the soap business Launch international brands of keyline products in india

 Huge opportunities to grow in developing countries of Africa Better chance to grow fast in powder based hair dye Contract manufacturing

THREATS
Rising prices of palm oil and other raw material ITCs plans to foray in to personal care business 50% revenues come from highly penetrated & competitive soaps business

PRODUCT PROFILE

SALES MIX OF GODREJ CONSUMER PRODUCTS LTD.

SOAPS
EVITA FAIRGLOW CINTHOL GODREJ NO.1 SOAP

TOILETRIES
CINTHOL DEO TALC CINTHOL PERFUMED DEODRANT SPRAY GODREJS NO.1 SANDAL TALC AND JASMINE TALC

HAIR CARE
POWDER HAIR DYE KALI MEHENDI KASH KALA LIQUID HAIR DYE COLOR SOFTHAIR COLORS

HOME CARE PRODUCTS AND FABRIC CARE

KEYLINE BRANDS

KEYLINE BRANDS CUTICURA AAPRI ERASMIC INECTO NULON

SCA HYGIENE BRANDS

Is a joint venture company between SCA and GCPL SCA is a global consumer goods and paper company The group conduct sales in 90 countries Market-leading brands for few products

KINKY BRANDS
Kinky's products: dry hair, hair braids human hair extensions,hair pieces etc. Kinky also offers hair accessories: styling gels, hair sprays, oil free shampoo, bonding glue and bonding glue removal.

COMPETITOR PROFILE

Dabur India Ltd.

4th largest FMCG company in India. Operates in 5 countries Manufactures in India, Africa, UAE Dabur foods a subsidiary. Plans to expand overseas.

Products of Dabur:
Dabur foods Dabur Pharma International Range Ayurvedic specialities Dabur juices

EXTERNAL ENVIRONMENT

POLITICAL ENVIRONMENT
Exemption and abolition- excise duty and surcharge Excise on soaps manufactured without power will now attract 16% duty The Budget proposes - 8% excise duty reduction on specific packaging material Likely to result in 2-3% cut in costs of items of daily consumption

ECONOMIC ENVIRONMENT
India's FMCG sector : 4th largest sector in the economy Total FMCG market - in excess of US$ 17.36 billion Estimated to be US$ 33.4 billion in 2015

 Estimated: - ten-fold increase in middle-class population - three-fold rise in household income -aggregate consumer spending: from US$ 428.69 billion in 2005 to US$ 1.76 trillion in 2025

 Opportunity for the FMCG Industry in Rural India: -purchasing power in rural India is on steady rise - market growing at 3-4% per annum -one million new consumers added every year -growth rates of FMCG- higher in rural than urban markets

SOCIOLOGICAL ENVIRONMENT
currently youngest nation in the world - 65% population under 35 years median age of Indias youth- one of the youngest in the world, roughly 24 years proportion of population in the consuming age (15-54 years) - increase from 58% in 2006 to over 60% in 2010

 average monthly per capita consumption expenditure: urban India doubled.

urban India accounts :42% of consumer expenditure The FMCG industry-one of the big beneficiary of the boom in consumerism
lifestyle changes & globalization-traditional perception for packaged food being stale changed

skin care, cosmetics & health care are the sectors to bet on in the future.

TECHNOLOGICAL ENVIRONMENT
Geographical Information Systems ( GIS) Added new vistas in Dairy Farm & management Distribution of products, production rate, location of shops &selling rate can be monitored Aseptic technology Way of processing & packaging liquid food-keeps food fresh for a year without refrigeration or preservatives

INTERNAL ENVIRONMENT

HR ENVIRONMENT
Staff strength-more than 1200 employees Employee Stock Option Plan main aim-make employees partners in companys growth -Godrej Sales Academy -ACE program -GALLOP (Godrej Accelerated Learning, Leadership and Orientation Program)

INFORMATION TECHNOLOGY
Project `Sampark- supply chain management initiative of the Company - an information exchange to ensure efficient planning, timely delivery and minimal inventories

RESEARCH AND DEVELOPMENT

well equipped R&D laboratory
During the year, R & D team accomplished the following: -new health soap `Vigil' -Development of products shipped to Keyline Brands U.K. and Rapidol S.A. -Product registration in U.K. for GCPL Brands -Powder Hair Dye with added conditioner and perfume.

QUALITY ENVIRONMENT
Total Quality Management system ISO certifications Cheaper materials substituted and most of the available raw material has been made R&D also helps in quality control, innovative products

SOCIOLOGICAL ENVIRONMENT Environmental Concerns Godrej and Trees The Godrej Ganga Ecology Panel Noise Pollution

FINANCIAL ANALYSIS

PROFIT AND LOSS STATEMENT ANALYSIS

SALES
2006-07 2005-06 2004-05 2003-04 0 50000 100000 150000 200000 250000

Godrej Dabur

COGS
2006-07 2005-06 2004-05 2003-04 0 20000 40000 60000 80000 100000 120000

Godrej Dabur

PBDIT
2006-07 2005-06 2004-05 2003-04 0 5000 10000 15000 20000 25000 30000 35000

Godrej Dabur

PAT

2006-07

2005-06

2004-05

2003-04 0 5000 10000 15000 Dabur 20000 25000 30000

Godrej

EPS
2006-07 2005-06 2004-05 2003-04 0 2 4 6 Godrej 8 Dabur 10 12 14 16

BALANCE SHEET ANALYSIS

EQUITY

2006-07 2005-06 2004-05 2003-04 0 10000 20000 30000 40000 50000

Godrej Dabur

DEBT
2006-07 2005-06 2004-05 2003-04 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000

Godrej Dabur

CURRENT ASSETS

2006-07

2005-06

2004-05

2003-04 0 10000 20000 30000 Godrej 40000 Dabur 50000 60000 70000

CURRENT LIABILITIES

2006-07

2005-06

2004-05

2003-04 0 10000 20000 Godrej 30000 Dabur 40000 50000

RATIO ANALYSIS- Godrej

LIQUIDITY RATIO CURRENT RATIO = Current Assets Current Liabilities

2007 27753 26172.41 = 1.06

2006 17141.5 18854.55 = 0.91

QUICK RATIO = Current Assets-Inventories Current Liabilities

27753-13523.43 26172.41 = 0.54

17141.5-10046.7 18854.55 = 0.38

CURRENT RATIO

1.1 1.05 1 0.95 0.9 0.85 0.8 2006 Mar-06 RATIO 0.91 2007 Mar-07 1.06

LEVERAGE RATIO DEBT EQUITY RATIO = Total Debt Net Worth

2007 18158.93 12199.92 = 1.50

2006 7528.86 7868.49 = 0.96

TOTAL DEBT RATIO = Total Debt Capital Employed (Capital Employed= Total Debt + Net Worth)

18158.93 . 18158.93 + 12199.92 = 0.60

7528.86 . 7528.86 + 7848.49 = 0.50

INTEREST COVERAGE RATIO

= EBIT interest

15850.36 962.85 =16.46

13208.21 647.42 =20.42

TOTAL DEBT RATIO

0.6 0.55 0.5 0.45 2006 Mar-06 RATIO 0.5 2007 Mar-07 0.6

ACTIVITY RATIO

2007

2006

INVENTORY TURNOVER

COGS Inventory

48768.11 13523.43 = 3.6

33623.23 10046.70 = 3.3

ASSET = Sales TURNOVER Net Assets

95588.02 30358.85 = 3.15

70703.00 15397.35 = 4.59

FIXED ASSET= Sales TURNOVER Fixed Assets

95588.02 28778.26 = 3.32

70703 17110.4 = 4.13

CURRENT ASSET TURNOVER

= Sales Current Asset DEBTORS = Sales TURNOVER Debtors

95588.02 27753 = 3.44

70703 17141.50 = 4.13

95588.02 4832.20 = 19.78 times

70703 3032.57 = 23.31 times

AVERAGE COLLECTION PERIOD

= 360 Debtors Turnover

360 19.78 = 18.20 days

360 23.31 = 15.44 days

INVENTORY RATIO

3.6 3.5 3.4 3.3 3.2 3.1 2006 Mar-06 RATIO 3.3 2007 Mar-07 3.6

PROFITABILITY RATIO GROSS PROFIT RATIO = Sales-COGS Sales

2007 95588.02-48768.11 95588.02 = 0.48

2006 70703-33623.23 70703 = 0.52

NET PROFIT RATIO = PAT Sales RETURN ON = EBIT INVESTMENT Net Worth

14403.13 95588.02 = 0.15 15850.36 12199.92 = 1.30

12130.44 70703 = 0.17 13208.21 7868.49 = 1.70

RETURN ON = PAT EQUITY Net Worth

14403.13 12199.92 = 1.18

12130.44 7868.99 = 1.54

EPS

= PAT No. of shares

1440313000 225844076 =6.38

1213044000 225972592 =5.37

GROSS MARGIN RATIO

0.52 0.5 0.48 0.46 2006 Mar-06 RATIO 0.52 2007 Mar-07 0.48

NET MARGIN RATIO

0.17 0.16 0.15 0.14 2006 Mar-06 RATIO 0.17 2007 Mar-07 0.15

EPS 20 15 10 5 0 2004 2005 Mar-04 EPS 11.35 Mar-05 15.81 2006 2007 Mar-07 6.38 Mar-06 5.37

RATIOS : GODREJ vs. DABUR

Godrej- RATIO

2007

2006

CURRENT RATIO
= Current Assets Current Liabilities QUICK RATIO = Current Assets-Inventories Current Liabilities Dabur- RATIO CURRENT RATIO

27753 26172.41
= 1.06 27753-13523.43 26172.41

17141.5 18854.55
= 0.91 17141.5-10046.7 18854.55

= 0.54
2007 64046.49 45175.48 =1.42:1

= 0.38
2006 47132 43109.93 =1.08:1

QUICK RATIO

64046.49-25710.84 47132-21277.84 45175.48 43609.93 =0.83:1 =0.60:1

1.5

1.42 1.06 0.91 1.08

0.5

0 J an-06 C UR R E NT R A TIO G odrej J an-07 C UR R E NT R A TIO Dabur

1 0.8 0.6 0.4 0.2 0 J an-06 QUIC K R ATIO G odrej J an-07 QUIC K R ATIO Dabur

Godrej- RATIO DEBT EQUITY RATIO = Total Debt Net Worth TOTAL DEBT RATIO = Total Debt Capital Employed (Capital Employed= Total Debt + Net Worth) Dabur- RATIO DEBT EQUITY RATIO

2007 18158.93 12199.92 = 1.50 18158.93 . 18158.93 + 12199.92 = 0.60 2007 66983.22 . 8628.84+39327.88 =1.40 66983.22 . 47956.72+66983.22 =0.60

2006 7528.86 7868.49 = 0.96 7528.86 . 7528.86 + 7848.49 = 0.50 2006 62399.74 . 5733.03+ 43972.79 =1.25 62399.74 . 49705.82+ 62399.74 =0.56

TOTAL DEBT RATIO

1.5 1.25 1 0.96

1.5

1.4

0.5

0 J an-06 DE B T E QUITY R ATIO G odrej J an-07 DE B T E QUITY R ATIO Dabur

0.6

0.55

0.5

0.45 J an-06 J an-07

TOTAL DE B T R ATIO G odrej

TOTAL DE B T R ATIO Dabur

Godrej- RATIO INTEREST COVERAGE RATIO = EBIT interest

2007 15850.36 962.85 =16.46

2006 13208.21 647.42 =20.42

Dabur- RATIO

2007

2006

INTEREST COVERAGE RATIO

31949.22 1537.5
=20.78

25661.97 1615.15
=15.89

25 20 15 10 5 0 J an-06 J an-07 INTE R E S T C OV E R AG E R ATIO G odrej INTE R E S T C OV E R AG E R ATIO Dabur

Godrej- RATIO INVENTORY TURNOVER = COGS Inventory ASSET TURNOVER = Sales Net Assets

2007 48768.11 13523.43 = 3.6 95588.02 30358.85 = 3.15

2006 33623.23 10046.70 = 3.3 70703.00 15397.35 = 4.59

Dabur- RATIO
INVENTORY TURNOVER

2007
108244.85 25710.84 =4.21 223371.78 66983.22 =3.33 times

2006
89855.66 21277.84 =4.22 189957 62399.74 =3.04 times

ASSET TURNOVER

5 4 3 2 1 0 J an-06 AS S E T TUR NOVE R G odrej J an-07 AS S E T TUR NOVE R Dabur

5 4 3 2 1 0 J an-06 INVE NTOR Y R ATIO G odrej J an-07 INVE NTOR Y R ATIO Dabur 3.3 4.22 3.6 4.21

Godrej- RATIO FIXED ASSET TURNOVER = Sales . Fixed Assets

2007 95588.02 28778.26 = 3.32

2006 70703 17110.4 = 4.13

CURRENT ASSET TURNOVER

= Sales . Current Asset Dabur- RATIO FIXED ASSET TURNOVER

95588.02 27753
= 3.44 2007 223371.78 37916.02 =5.90 223371.78 64046.49 =3.50

70703 17141.50
= 4.13 2006 189957 51245.30 =3.70 189957 47132 =4.03

CURRENT ASSET TURNOVER

6 5 4 3 2 1 0 J an-06 J an-07 F IXE D AS S E T TUR NOV E R G odrej F IXE D AS S E T TUR NOV E R Dabur 4.13 3.7 3.32

5.9

5 4 3 2 1 0 J an-06 J an-07 C UR R E NT AS S E T TUR NOV E R G odrej C UR R E NT AS S E T TUR NOV E R Dabur 4.13 4.03 3.44 3.5

Godrej- RATIO DEBTORS TURNOVER = Sales Debtors AVERAGE COLLECTION PERIOD = 360 Debtors Turnover Dabur- RATIO DEBTORS TURNOVER

2007 95588.02 4832.20 = 19.78 times 360 19.78 = 18.20 days 2007 223371.78 14197.09 =15.73 360 15.73 =22.88 days

2006 70703 3032.57 = 23.31 times 360 23.31 = 15.44 days 2006 189957 7435.09 =25.54 360 25.54 =14.09 days

AVERAGE COLLECTION PERIOD

30 25 20 15 10 5 0 J an-06 J an-07 DE B TOR S TUR NOVE R R ATIO G odrej DE B TOR S TUR NOVE R R ATIO Dabur 23.31 25.54 19.78 15.73

25 22.88 20 15 10 5 0 J an-06 J an-07 AVE R AG E C OLLE C TION P E R IOD G odrej AVE R AG E C OLLE C TION P E R IOD Dabur 15.44 14.09 18.2

Godrej- RATIO GROSS PROFIT RATIO = Sales-COGS Sales

2007 95588.02-48768.11 95588.02 = 0.48

2006 70703-33623.23 70703 = 0.52

NET PROFIT RATIO = PAT Sales Dabur- RATIO

GROSS PROFIT RATIO

14403.13 95588.02 = 0.15 2007

223371.78-108244.85 223371.78 =0.51 28304.46 223371.78 =0.12

12130.44 70703 = 0.17 2006

189957-89855.66 189957 =0.53 21418.24 189957 =0.11

NET PROFIT RATIO

0.53 0.52 0.51 0.5 0.49 0.48 0.47 0.46 0.45 J an-06 0.52

0.53 0.51

0.48

J an-07 G R OS S P R OF IT R ATIO Dabur

G R OS S P R OF IT R ATIO G odrej

0.2 0.17 0.15 0.1 0.05 0 J an-06 NE T P R OF IT R ATIO G odrej J an-07 NE T P R OF IT R ATIO Dabur 0.11 0.15 0.12

Godrej- RATIO RETURN ON INVESTMENT = EBIT Net Worth RETURN ON EQUITY = PAT Net Worth
Dabur- RATIO

2007 15850.36 12199.92 = 1.30 14403.13 12199.92 = 1.18

2007

2006 13208.21 7868.49 = 1.70 12130.44 7868.99 = 1.54

2006

RETURN ON INVESTMENT 31949.22 47956.72 =0.66 RETURN ON EQUITY 28304.46 47956.72 =0.6

25661.97 49705.82 =0.51 21418.24 49705.82 =0.43

2 1.7 1.5 1.3 1 0.5 0 J an-06 J an-07 R E TUR N ON INVE S TME NT G odrej R E TUR N ON INVE S TME NT Dabur 0.51 0.66

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0

1.54 1.18

0.6 0.43

J an-06 R E TUR N ON E QUITY G odrej

J an-07 R E TUR N ON E QUITY Dabur

EPS
= PAT . No. of shares

1440313000 225844076
=6.38

1213044000 225972592
=5.37

EPS

(Dabur)

2830446000 860884512 =3.28

2141824000 859723793 =2.5

7 6 5 4 3 2 1 0 J an-06 E P S G odrej J an-07 E P S Dabur 3.28 2.5 5.37 6.38

RECOMMENDATIONS

CURRENT RATIO
Current ratio increased -0.91 to 1.06: improvement but still underutilization of current assets Current asset turnover ratio- declined from 4.13 to 3.44 Should focus on increasing its liquidity Should increase current assets

QUICK RATIO
Quick Ratio increased - 0.38 to 0.54
suggests - apart from increasing current assets, Godrej should also focus on effective inventory management.

It should increase its inventory reduction.

DEBT RATIOS
Total Debt Ratio increased: 0.50 to 0.60 Debt Equity Ratio increased:0.96 to 1.50 Debt-more risky
Godrej -legal obligation to pay interest Difficulty in raising funds from creditors and owners in future.

DEBTORS TURNOVER RATIO

Debtors Turnover decreased : 23.31 times to 19.78 times Average Collection Period increased:15.44 days to 18.20 days Not a good indicator Inefficient management of credit. Should follow rigid credit policies

INVENTORY TURNOVER RATIO

Inventory turnover increased: 3.3 to 3.6 marginal increase Needs to focus more on better inventory management.

ASSET TURNOVER RATIOS

All 3 ratios -declined showing an under utilization of assets Under utilization of assets will increase the firms need for costly financing as well as expenses for maintenance and upkeep

PROFITABILITY RATIOS
Gross Profit Ratio decreased - 0.52 to 0.48 Net Profit decreased - 0.17 to 0.15 The possible reasons for this decline are: Higher cost of production Inefficient utilization of Profits Inability to purchase raw materials at favorable terms High administration, marketing or other

ROI AND ROE

ROI have reduced - 1.70 to 1.30
ROE have reduced - 1.54 to 1.18 This is again due to a decline in the profit margins

THANKYOU!