ICICI Direct: P&G - VMS Focus To The Fore Despite Quarterly Fluctuations
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ICICI Direct Report
Procter & Gamble Hygiene and Health Care Ltd.’s Q4 FY20 (year ending June) revenues declined 13.9% YoY to Rs 201 crore due to temporary disruption of operations initially from the second fortnight of March amid Covid-19.
Ebitda margins expanded 305 basis points YoY to 26.4% due to better gross margins and lower other expenditure.
Ebitda de-grew 2.7% YoY to Rs 53 crore. Net profit grew 10.8% YoY to Rs 49 crore.
Delta vis-a-vis Ebitda was due to lower tax rate (12.3% versus 28.3% in Q4 FY19).
The company is a pharma cum consumer OTC player with strong and legacy brands in the vitamin minerals and supplement (VMS) category like Neurobion, Polybion, Evion (all vitamins), Livogen (iron supplement), Nasivion (nasal decongestant), Seven Seas (vitamin- substitute for malt based health drinks).
Post the change in ownership (from Merck Ltd. to P&G), we expect these known brands to leverage on P&G's distribution might as most of these brands are driven by self-medication habit rather than doctor's prescription.
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