PROCTER & GAMBLE HYGIENE & HEALTH CARE LTD Result Update (PARENT BASIS): Q4 FY15

PROCTER & GAMBLE HYGIENE & HEALTH CARE LTD Result Update (PARENT BASIS): Q4 FY15 ISIN: INE179A01014 OCTOBER 5 th 2015 STOCK DETAILS Sector FMCG BSE Code 500459 Face Value 10.00 52wk. High / Low (Rs.) 7435.00/5144.40 Volume (2wk. Avg ) 3055 Market Cap ( Rs in mn ) 202388.10 Annual Estimated Results (A*: Actual / E*: Estimated) Years FY15A FY16E FY17E Net Sales 23337.90 26371.83 29536.45 EBITDA 5590.60 6751.22 7417.37 Net Profit 3461.40 4221.97 4595.79 EPS 106.64 130.07 141.58 P/E 58.47 47.94 44.04 Shareholding Pattern (%) As on June-15 As on March-15 PROMOTER 70.64 70.64 FIIs 2.58 2.30 DIIs 10.72 11.07 OTHERS 16.06 15.99 1 Year Comparative Graph P&G LTD BSE SENSEX Recommendation BUY CMP 6235.00 Target Price 6800.00 SYNOPSIS Procter & Gamble Hygiene & Health Care Limited is one of India s fastest growing FMCG companies that has in its portfolio WHISPER India s leading Feminine Hygiene brand, and Vicks India s No.1 Health care brand and old spice. During Q4 FY15, the company net profit jumps to Rs. 1070.90 million against Rs. 899.20 million in Q4 FY14, an increase of 19.09%. Revenue for the quarter rose by 14.70% to Rs. 5575.60 million from Rs. 4861.00 million, when compared with the prior year period. During the quarter, Profit before interest, depreciation and tax is Rs. 1731.70 million as against Rs. 1625.00 million in the corresponding period of the previous year. During Q4 FY15, PBT up by 7.81% to Rs. 1595.30 million from Rs. 1479.80 million in the previous year period. EPS of the company stood at Rs. 32.99 a share during the quarter, registering 19.09% increase over previous year period. Feminine care and Health care businesses continued to deliver double-digit sales growth in a competitive market environment behind superior value propositions and strength of product portfolio. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 23% over 2014 to 2017E respectively. PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND COMPANY NAME (Rs.) Rs. in Mn. (Rs.) Ratio Ratio (%) P&G Hygiene and Health Care Ltd 6235.00 202388.10 106.64 58.47 16.47 302.50 Emami Ltd 1169.60 265461.30 20.74 56.39 21.90 700.00 Dabur INDIA Ltd 278.85 490536.50 4.51 61.83 20.97 200.00 Hindustan Unilever Ltd 814.55 1762579.20 19.95 40.83 47.33 1500.00

FINANCIAL HIGHLIGHTS (PARENT BASIS) Results updates- Q4 FY15, Procter & Gamble Hygiene & Health Care company s products are sold through retail operations including mass merchandisers, grocery stores, membership club stores, drug stores, department stores, and high frequency stores, reported its financial results for the quarter ended 30 th June, 2015. Months June-15 June-14 % Change Net Sales 5575.60 4861.00 14.70 PAT 1070.90 899.20 19.09 EPS 32.99 27.70 19.09 EBITDA 1731.70 1625.00 6.57 The company net profit jumps to Rs. 1070.90 million against Rs. 899.20 million in the corresponding quarter ending of previous year, an increase of 19.09%. Revenue for the quarter rose by 14.70% to Rs. 5575.60 million from Rs. 4861.00 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 32.99 a share during the quarter, registering 19.09% increase over previous year period. Profit before interest, depreciation and tax is Rs. 1731.70 million as against Rs. 1625.00 million in the corresponding period of the previous year. Expenditure Break up of Expenditure (Rs in Million) Q4 FY15 Q4 FY14 CHNG % Cost of raw & packing materials 1245.60 5788.60-77% Purchase of Stock In Trade 870.10 3433.00-75% Employee Benefit Expenses 198.90 1132.90-82% Depreciation & Amortization Expenses Advertising & sales promotion expenses 133.40 525.30-75% 735.00 3327.30-78% Royalty Expenses 262.80 1114.40-76% Other Expenses 853.60 3709.90-77%

COMPANY PROFILE P&G is one of the largest and amongst the fastest growing consumer goods companies in India. Established in 1964, P&G India now serves over 650 million consumers across India. The company s presence pans across the Beauty & Grooming segment, the Household Care segment as well as the Health & Well Being segment, with trusted brands that are household names across India. These include Vicks, Ariel, Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene, Oral-B, Head & Shoulders, Wella and Duracell. Superior product propositions and technological innovations have enabled P&G to achieve market leadership in a majority of categories it is present in. P&G India is committed to sustainable growth in India, and is currently invested in the country via its five plants and over nine contract manufacturing sites, as well as through the 26,000 jobs it creates directly and indirectly. P&G operates under three entities in India - two listed entities Procter & Gamble Hygiene and Health Care Limited and Gillette India Limited, as well as one 100% subsidiary of the parent company in the U.S. called Procter & Gamble Home Products.

Financial Highlight (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions) Balance sheet as at June 30 th, 2014-2017E FY14A FY15A FY16E FY17E SOURCES OF FUNDS Shareholder's Funds Share Capital 324.60 324.60 324.60 324.60 Reserves and Surplus 9704.40 11962.20 14115.40 16656.17 1. Sub Total - Net worth 10029.00 12286.80 14440.00 16980.77 Non Current Liabilities Other Long term Liabilities 2.80 0.00 0.00 0.00 Long Term Provisions 26.60 33.30 38.96 44.42 2. Sub Total - Non Current Liabilities 29.40 33.30 38.96 44.42 Current Liabilities Trade Payables 2299.90 3723.00 4244.22 4668.64 Other Current Liabilities 631.20 846.50 948.08 1033.41 Short Term Provisions 2089.90 2587.20 3052.90 3449.77 3. Sub Total - Current Liabilities 5021.00 7156.70 8245.20 9151.82 Total Liabilities (1+2+3) 15079.40 19476.80 22724.15 26177.00 APPLICATION OF FUNDS Non-Current Assets a) Fixed Assets 3376.80 3477.70 3651.59 3870.68 b) Deferred Tax Asset 71.70 39.60 45.94 51.45 c) Long Term loans and advances 1506.60 2387.90 3056.51 3667.81 d) Other non-current assets 0.00 0.50 0.56 0.62 1. Sub Total - Non Current Assets 4955.10 5905.70 6754.59 7590.56 Current Assets Inventories 1185.20 1190.70 1321.68 1440.63 Trade receivables 860.50 1139.40 1424.25 1737.59 Cash and Bank Balances 2690.80 6185.80 7670.39 9372.90 Short-terms loans & advances 4934.80 4511.60 4922.66 5316.47 Other current assets 453.00 543.60 630.58 718.86 2. Sub Total - Current Assets 10124.30 13571.10 15969.56 18586.44 Total Assets (1+2) 15079.40 19476.80 22724.15 26177.00

Annual Profit & Loss Statement for the period of 2014 to 2017E Value(Rs.in.mn) FY14A FY15A FY16E FY17E Description 12m 12m 12m 12m Net Sales 20509.40 23337.90 26371.83 29536.45 Other Income 802.00 746.40 791.18 830.74 Total Income 21311.40 24084.30 27163.01 30367.19 Expenditure -16302.50-18493.70-20411.79-22949.82 Operating Profit 5008.90 5590.60 6751.22 7417.37 Interest -53.90-57.20-37.18-31.60 Gross profit 4955.00 5533.40 6714.04 7385.77 Depreciation -351.80-525.30-604.10-676.59 Profit Before Tax 4603.20 5008.10 6109.94 6709.18 Tax -1583.00-1546.70-1887.97-2113.39 Net Profit 3020.20 3461.40 4221.97 4595.79 Equity capital 324.60 324.60 324.60 324.60 Reserves 9704.40 11962.20 14115.40 16656.17 Face value 10.00 10.00 10.00 10.00 EPS 93.04 106.64 130.07 141.58 Quarterly Profit & Loss Statement for the period of 31 st Dec, 2014 to 30 th Sep, 2015E Value(Rs.in.mn) 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15E Description 3m 3m 3m 3m Net sales 6445.10 5552.30 5575.60 6411.94 Other income 170.80 177.10 188.10 195.62 Total Income 6615.90 5729.40 5763.70 6607.56 Expenditure -5162.50-4324.20-4032.00-5078.26 Operating profit 1453.40 1405.20 1731.70 1529.31 Interest -4.60-38.00-3.00-2.46 Gross profit 1448.80 1367.20 1728.70 1526.85 Depreciation -158.70-121.70-133.40-152.08 Profit Before Tax 1290.10 1245.50 1595.30 1374.77 Tax -383.50-376.60-524.40-422.05 Net Profit 906.60 868.90 1070.90 952.72 Equity capital 324.60 324.60 324.60 324.60 Face value 10.00 10.00 10.00 10.00 EPS 27.93 26.77 32.99 29.35

Ratio Analysis Particulars FY14A FY15A FY16E FY17E EPS (Rs.) 93.04 106.64 130.07 141.58 EBITDA Margin (%) 24.42 23.96 25.60 25.11 PBT Margin (%) 22.44 21.46 23.17 22.71 PAT Margin (%) 14.73 14.83 16.01 15.56 P/E Ratio (x) 67.01 58.47 47.94 44.04 ROE (%) 30.11 28.17 29.24 27.06 ROCE (%) 53.45 49.78 50.94 47.67 EV/EBITDA (x) 39.87 35.10 28.84 26.02 Book Value (Rs.) 308.96 378.52 444.86 523.13 P/BV 20.18 16.47 14.02 11.92 Charts

Outlook and Conclusion At the current market price of Rs.6235.00, the stock P/E ratio is at 47.94 x FY16E and 44.04 x FY17E respectively. Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs. 130.07 and Rs. 141.58 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 23% over 2014 to 2017E respectively. On the basis of EV/EBITDA, the stock trades at 28.84 x for FY16E and 26.02 x for FY17E. Price to Book Value of the stock is expected to be at 14.02 x and 11.92 x for FY16E and FY17E respectively. We recommend BUY in this particular scrip with a target price of Rs.6800.00 for Medium to Long term investment. Industry Overview The consumer durables market is expected to reach US$ 12.5 billion in 2015 and US$ 20.6 billion by 2020. Urban markets account for the major share (65 per cent) of total revenues in the consumer durables sector in India. There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as penetration of brands increases. Also demand for durables like refrigerators as well as consumer electronic goods are likely to witness growing demand in the coming years in the rural markets as the government plans to invest significantly in rural electrification. The FMCG sector has grown at an annual average of about 11 per cent over the last decade. The overall FMCG market is expected to increase at (CAGR) of 14.7 per cent to touch US$ 110.4 billion during 2012-2020, with the rural FMCG market anticipated to increase at a CAGR of 17.7 per cent to reach US$ 100 billion during 2012-2025.Food products is the leading segment, accounting for 43 per cent of the overall market. Personal care (22 per cent) and fabric care (12 per cent) come next in terms of market share. Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the consumer market. The Government of India's policies and regulatory frameworks such as relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of the major growth drivers for the consumer market.

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