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P&G Q3 Review - Encouraging Sales Momentum In A Tough Environment: Motilal Oswal

P&G Q3 Review - Encouraging Sales Momentum In A Tough Environment: Motilal Oswal

<div class="paragraphs"><p>Procter &amp; Gamble Co. Tide brand laundry detergent. (Photographer: Daniel Acker/Bloomberg)</p></div>
Procter & Gamble Co. Tide brand laundry detergent. (Photographer: Daniel Acker/Bloomberg)

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Motilal Oswal Report

Procter and Gamble Hygiene and Healthcare Ltd.'s sales growth of 17.3% YoY (adjusted for a sharp one-off spike in other operating income) was extremely strong, given the unusually high base of Vicks sales in FY21 (24.1%) as well as the overall slowdown in non-discretionary consumption.

Two-year sales compound annual growth rate, which has been in the 12- 13% range in the preceding three quarters, stood at 16.6% in Q3 FY22.

Ad spends fell gradually from unusually high levels in FY21 (14.6% versus 10.9% in FY20) when P&G chose to increase its ad spends globally rather than curtail marketing spends amid the Covid-19 pandemic.

P&G has strong earnings growth potential, led by a healthy revenue growth as well as the gradual normalisation of the unusually high ad spends in the aftermath of the pandemic as well as ongoing material cost pressures.

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Motilal Oswal P&G Q3FY22 Result Update.pdf

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