market research report : home care market in india 2014 - sample

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Home Care Market – India

October 2014

2

Executive Summary

Market

Drivers & Challenges

Government

Competitive Landscape

Indian FMCG sector is an INR ‘m1’ industry and is growing by a CAGR of ‘r1’%

A formidable feature in this sector is the vast distribution network of players

Home care industry, a sub-set of the FMCG sector, has been growing at ‘r2’%

It is abound with strong presence of multinationals, both domestic and foreign concerns

Bureau of Indian Standards regulations

Drivers Increase in disposable income

Rise in organized retail

Growing health consciousness

Increase in awareness

Growth in rural segment

Changing lifestyle of consumers

Major Players

Company 1 Company 2 Company 3


Trends

Rise of private labels

Improved marketing strategies

Product portfolio diversification

Product innovation

HOME CARE MARKET IN INDIA 2014.PPT

Challenges Depreciation of Rupee and rise in energy

costs

High chemical content

http://www.rb.com/

http://www.jyothylaboratories.com/

http://www.nirma.co.in/

http://www.marico.com/

http://www.rb.com/

3 HOME CARE MARKET IN INDIA 2014.PPT

•Macro-Economic Indicators

•Introduction

•Market Overview

•Segmentation

•Supply Chain

•EXIM Data

•Drivers & Challenges

•Government Initiatives

•Trends

•Competitive Landscape

•Strategic Recommendations

•Appendix

4

Economic Indicators (1/3)

11

12

13

14

15

b2

a2

Q1

d1 c1

b1

a1

Q4

c4

b4

a4

Q3

c3

b3

a3

Q2

d2

c2

INR tn

2013-14 2012-13 2011-12 2010-11

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

-2

-1

0

1

2

q

Jul 2013 - Aug 2013

p

%

Nov 2013 - Dec 2013

t

Oct 2013 - Nov 2013

s

Sep 2013 - Oct 2013

r

Aug 2013 - Sep 2013

CERAMIC TILES MARKET IN INDIA 2014.PPT

5

Despite price hikes, FMCG sector has been able to register positive growth rate

• FMCG or Fast Moving Consumer Goods is also known

as Consumer Packaged Goods (CPG)

• It ranks ‘r1’ in terms of being the largest sector in the

Indian economy

• Between 2012 and 2013 alone, it grew by ‘p1’%

• Rising disposable income and increase in organized

retail have acted as primary drivers for the growth of

this sector

• This market has witnessed a rise in demand for

premium and luxury products

• It has seen heavy foreign direct investments (FDI)

which accounted for ‘p2’% of the country’s total FDI

over the period Apr 2000 to Mar 2013

• Automatic investment approval of up to ‘p3’%

foreign equity is allowed

• Low penetration in rural areas pose as a potential

opportunity for this sector

FMCG Industry – Overview FMCG - Market Size and Growth

Note: Figures are for the respective calendar years

2020e 2014e 2013 2018e

Others

FMCG FMCG as an

industry contributes to

‘p5’% of the GDP in India


FMCG’s Contribution To GDP (2013)

0

2,000

4,000

6,000

8,000

a

INR bn

p4% d

c

b

p6% p5%


Growing awareness coupled with ease of usage to drive the Indian home care market

• Home care market in India is expected to grow at a CAGR of ‘p1’% over the next five years

• Steady economic growth and increase in awareness about easy to use home cleaning products have emerged as major

stimulants to market growth

• Marketing campaigns, product promotions and advertisements are crucial to the success of the products in the Indian

home care market

• Home care sector is also characterized by the presence of both domestic and foreign players who engage in continuous

innovation in order to get a greater share of the market

Home Care Market India – Overview

Home Care Market

fe

dc

ba

0

100

200

300

400

500

INR bn

p1%

2017e 2016e 2015e 2014e 2013 2018e


Segmentation – Summary

Home Care

Utensil Cleaners Surface Cleaners Home Insecticides

Detergents (Bar/Powder

/Liquid)

Fabric Conditioners

Air Care Fabric Wash

Fabric Starch Fabric

Whiteners

Bars, Powders and

Liquids

Toilet Cleaner

Floor Cleaners

Specialist Surface

Cleaners

Fragrance Blocks and

Sprays

Vaporizers and Sprays

Coils, Mats and Papers

Repellent Skin Creams


Growing number of organized retail formats are expected to facilitate…

Company Retailers Consumers

Home Care – sales through organized formats

Retail Format Description Companies

Home Care Market – Supply Chain (1/2)

9

Rise in manufacturing activity in India…

• Over the last four years exports have increased by over ‘p1’%

• In FY 2014, ‘c1’ accounted for the highest share of home care exports

• The bulk of home care exports is constituted by ‘i1’

Exports Total Exports (Value)


j%

i%

h% g%

f%

e%

Others

Country 5

Country 4

Country 3

Country 2

Country 1

dc

ba

0

50

100

150

2011

INR bn

p2%

2014 2013 2012

Exports – Country-Wise Segmentation (2013) Exports – Country-Wise Segmentation (2014)

Note: Figures are for the respective financial years

p%

m%

o%

l%

n%

k%

Others

Country 3

Country 5

Country 2

Country 4

Country 1

10

… has resulted in eventual rise in exports


h%

g%

e% f%

Product 1

Product 2

Product 4

Product 3

a% b%

c%

d%

Product 3

Product 1

Product 4

Product 2

Product Segmentation (2013)

Product Segmentation (2014)

HS code Particulars

HS Codes for Home Care Products

Note: Separate data for insecticides are not available. Data used includes insecticides and other pesticides


Drivers & Challenges – Summary

Drivers

Increase in disposable income

Increase in awareness

Growing health consciousness

Rise in organized retail

Growth in rural segment

Changing lifestyle of consumers

Challenges

Depreciation of Rupee and rise in energy costs

High chemical content

12

Indian Government through Bureau of Indian Standards (BIS)…

• Bureau of Indian Standards (BIS) is a national standards body engaged in preparing and implementing standards, operating certification schemes both for products and systems, organization and management of testing laboratories, creating consumer awareness and maintaining close liaison with international standard bodies

Bureau of Indian Standards regulations (1/2)

Standards Formulation

Product Certification

Activities rendered by BIS

Other Activities

Laboratories and Hallmarks

Management Systems


13

Trends – Summary

Product innovation Rise of private labels

Product portfolio diversification Improved marketing strategies

Trends


14

Competitive Rivalry • x

Bargaining Power of Suppliers • x

Bargaining Power of Buyers • x

Threat of Substitutes • x

Threat of New Entrants • x

Impact i4

Impact i2

Impact i1

Impact i3

Impact i5


Market Competition – Porter’s Five Forces Analysis

15

Competition – Summary

Players Fabric Wash Utensil

Cleaners Surface

Cleaners Air Care

Home Insecticides

Public Players

Company 1

Company 2

Company 3

Company 4

Company 5

Company 6

Private Players

Company 7

Company 8

Company 9


16

Competitive Benchmarking (1/5)

Public Trading Comparables

Company 1 Company 2 Company 3 Company 4

Market Capitalization (INR bn)

Share Price (INR)

EV/EBITDA (x)

EV/Revenue (x)

PE Ratio

Note: Top 3 Public companies based on the Market Capitalization; Market Capitalization, Share Price and PE ratio is as of 02/07/2014


17

Key Ratios of Top 3 Companies – Operational Basis (FY 2014) (1/3)

Competitive Benchmarking (2/5)

c1

b1

a1c2

b2

a2

0

5

10

15

20

%


Net Margin Operating Margin

• Company 1 recorded operating margin of ‘a1’%, higher than both Company 2 and Company 3 which recorded operating margin of ‘b1’% and ‘c1’% respectively

• Company 1 recorded net margin of ‘a2’%, higher than that of Company 2 which recorded net margin of ‘b2’% but lower than that of Company 3 which recorded net margin of ‘c2’%


18

Public: Company 1 (1/5)

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Category Products/Services

Household Care

Health Care

Personal Care

Foods

Name Designation

Chairman

Vice Chairman

CEO and Director

Director

H1


Head Office

19

Financial Snapshot Key Ratios

Financial Summary

• The company incurred a net profit of INR ‘m1’ in FY 2014, as compared to net profit of INR ‘m2’ in FY 2013

• The company reported total income of INR ‘m3’ in FY 2014, registering an increase of ‘p1’% over FY 2013

• The company earned an operating margin of ‘p2’% in FY 2014, an increase of ‘p3’ percentage points over FY 2013

• The company reported debt to equity ratio of ‘r1’ in FY 2014, a decrease of ‘p4’% over FY 2013

Key Financial Performance Indicators

Indicators Value (02/07/2014)

Market Capitalization (INR mn)

Total Enterprise Value (INR mn)

EPS (INR)

PE Ratio (Absolute)

Particulars y-o-y change

(2014-13) 2014 2013 2012 2011

Profitability Ratios Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios Operating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity Ratios Current Ratio

Cash Ratio

Leverage Ratios Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover

Improved Decline

Profit / Loss

Total Income

dc

ba

0

50,000

100,000

0

5,000

10,000

s

2013

q p

2011 2012

r

Profit INR mn

2014

Total Income INR mn



20

Key Business Segments Key Geographic Segments

Business Highlights (1/2)

q3%q2% q4%q1%

p3%p2%p1% p4%

100%

50%

0%

2014 2013 2012 2011

Note: Business segments and geographic segments are based on revenues

Description News

Performance

• The ‘r1’th largest FMCG concern in India, with revenues of INR ‘m1’

• Considered the world’s largest ‘t1’ company, it has ‘n1’ carry and forwarding (C&F) agents,

‘n2’ distributors and ‘n3’ retail outlets in India

Expansion

• Company 1 has expanded into the USA, the UK, Australia, South Africa, the UAE, Saudi Arabia, Turkey, Egypt, Oman, Nigeria, Sri Lanka, Nepal, Pakistan, and Bangladesh

• In March 2008, Company 1 expanded into personal care retailing with stores branded ‘b1’

• In April 2014, it launched packaged ‘f1’, the first of its kind in India

d4%d3%d2%d1%

c4%c3%c2%c1%

a4%a3%a2%a1%

100%

50%

0%

2012

b2%

2011

b1%

2014

b4%

2013

b3%



Segment 4 Segment 2

Segment 3 Segment 1 Segment 1

Segment 2

21

Business Highlights (2/2)

Description News

Acquisitions • In 2010, it acquired personal care company ‘c1’ of Turkey and hair care company ‘c2’ of

the USA

Media Planning • Company 1 has roped in multiple media planning agencies to promote its products,

namely ‘a1’, ‘a2’ and ‘a3’

Corporate Social Responsibility (CSR)

• Company 1 conducts its CSR activities through ‘x1’ • ‘x1’ is a non-profit organization that is engaged in upliftment of rural society in Uttar

Pradesh • It provides education, medical aid, employment, veterinary services for livestock and

monetary credit



22

T O

W S


Public: Company 1 – SWOT Analysis (5/5)


Private: Company 2 (1/5)

Key People

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Name Designation

Chairman, MD

Director

Director

Director

Category Products/Services

Home Care

Cosmetics

Nutrition & Wellness

Personal Care

H1

Head Office Products and Services

24

Shareholders of the Company Ownership Structure

Name No. of Shares held

a%

Segment 1

Note: AGM as of 30th Oct 2013



25

Particulars y-o-y change

(2013-12) 2013 2012 2011 2010

Profitability Ratios Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios Operating costs (% of Sales) Administration costs (% of

Sales)

Interest costs (% of Sales)

Liquidity Ratios Current Ratio

Cash Ratio

Leverage Ratios Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover


Financial Snapshot Key Ratios

Financial Summary

• Company incurred a net profit of INR ‘m1’ in FY 2013, as compared to net profit of INR ‘m2’ in FY 2012

• It reported total income of INR ‘m3’ in FY 2013, registering a decrease of ‘p1’% over FY 2012

• It earned an operating margin of ‘p2’% in FY 2013, a decrease of ‘p3’ percentage points over FY 2012

• The company reported current ratio of ‘r1’ in FY 2013, a decrease of ‘p4’% over FY 2012

Improved Decline


Profit / Loss

Total Income

b

a

0

2,000

4,000

6,000

8,000

0

1,000

2,000

3,000

4,000

s

Profit INR mn

Total Income INR mn

2010

q

2013 2011

p

c

r

2012


Description News

Overview

• Company 2 is the India’s leading direct selling FMCG-company

• It is a member of the Confederation of Indian Industries (CII) and Federation of Indian Chambers of Commerce (FICCI)

• Products are manufactured in India through ‘n1’ third party contract manufacturers

• At present, the company is offering ‘n2’ products in ‘n3’ different segments, namely ‘t1’, ‘t2’, ‘t3’, ‘t4’ and ‘t5’

Share Holding Pattern • Company 2 is a subsidiary of ‘c1’

Distribution Model

• Company 2 is a direct sales company that sells its products directly to consumers through its distributors known as ‘b1’

• Company 2 has a network of over ‘n4’ offices and ‘n5’ warehouses across the country which provides support to distributors in more than ‘n6’ towns

• Company 2 also offers free and unlimited training across the country to ‘b1’ and prospects to obtain the expertise and special skills required in direct selling

Home Care

• The company recently launched a new identity logo for the home care segment called ‘c2’

• ‘n7’ new products have also been launched by the company in the ‘t6’, ‘t7’ and ‘t8’ segments

• Home care segment contributes ‘r1’% of the revenues of the company from India

Business Highlights


27

T O

W S


Private: Company 2 – SWOT Analysis (5/5)

28

Thank you for the attention


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market research report : home care market in india 2014 - sample

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