Gillette India Q2 Results Review - Exports Impact Topline; Margin Surprises Positively: Yes Securities

Yes Securities Report

Gillette India Ltd.'s December 2023 quarter revenue was below estimate but margin surprised positively. Domestic sales grew ~6% for the quarter, which means exports business (~8.2% of FY23 revenues) saw a sharp decline.

Gillette India exports its products to 17 countries including neighboring countries like Bangladesh, Nepal and Sri Lanka. Both the segments came in below our estimate for the quarter.

Gross/Ebitda margin at 58.1%/24.4%, witnessed sharp improvement largely driven by productivity interventions, product price-mix and moderating cost inflation. Advertising and promotion spends has come down slightly in Q2, but Gillette India has maintained spends at 13.7% level in 1HFY24 (flat YoY).

We continue to build bottom-line growth faster than topline as called out by the management.

Maintain 'Add' rating with a revised target price of Rs 7,350 (Rs 6,850 earlier). Key monitorables:

1. Outcome for P&G India businesses from evaluation of 'Integrated growth strategy', media sources;

2. Exports and non-urban market recovery;

3. Cost of goods sold outlook.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit 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 NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.