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

3HOME 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
2013-142012-132011-122010-11
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
2020e2014e2013 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
f
e
d
c
ba
0
100
200
300
400
500
INR bn
p1%
2017e2016e2015e2014e2013 2018e

Segmentation – Summary
Home Care
Utensil Cleaners Surface Cleaners Home Insecticides
Detergents
(Bar/Powder
/Liquid)
Fabric
Conditioners
Air CareFabric 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
d
c
b
a
0
50
100
150
2011
INR bn
p2%
201420132012
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
a1
c2
b2
a2
0
5
10
15
20
%
Net MarginOperating 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
d
c
ba
0
50,000
100,000
0
5,000
10,000
s
2013
qp
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%
2014201320122011
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 4Segment 2
Segment 3Segment 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
TO
WS
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
20132011
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
TO
WS
Private: Company 2 – SWOT Analysis (5/5)

28
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Home Care Market – India report is part of Netscribes’ Retail and Services Series.
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