P&G Q3 Review - Topline Below Our Expectations; Increase In Ad Spends Augurs Well: Motilal Oswal
BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Procter and Gamble Hygiene and HealthCare Ltd.’s Q3 FY21 sales growth, while healthy at 15.8% YoY, was lower than our expectations, considering:
- the strong momentum in recent quarters; and
- a favorable base, with a 6.2% sales decline in Q3 FY20 (June year-ending company).
There was a steep increase of 73% YoY in advertising spends, translating to ad spends coming in at 17.1% of sales in Q3 FY21, much higher than the usual quarterly levels of 9-12% of sales.
With gross margin actually above expectations (up 20 basis point YoY versus our expectation of a 160bp YoY decline), high ad spends was the key reason for the miss on our Ebitda margin forecasts.
Click on the attachment to read the full report:
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.