P&G’s EBITDA For Q3FY13 Grows, Margins Decline

Procter & Gamble Hygiene and Healthcare (P&G), an FMCG company posted healthy results for the third quarter of FY13 post market on April 25, 2013. The company's net operating income jumped by 28% to Rs 417 crore on a YoY basis. This increase in revenue was mainly led by an increase in sales of its feminine care segment, which posted growth of over 39% in this period. At present, the market share for this segment is 57%. The healthcare segment, on the other hand, posted a flat growth for the company.

Further, due to the increase in purchase of stock-in-trade like personal products etc., P&G's operating expenses increased by 32%, an increase of Rs 85 crore to Rs 352 crore in Q3FY13. In addition to this, the raw material cost and advertising and selling expenses also increased in this period by 18% and 24% respectively leading to an increase in the total expenses.

The EBITDA showed a growth of 7% to Rs 81 crore against Rs 75 crore in the corresponding quarter of FY12. The bottomline reported a flat growth of Rs 4 lakh to Rs 52.09 crore in Q3FY13. However, the EBITDA margin in the said period stood at 18.65%, showing a decline of 330 basis points, due to the hike in raw material costs and selling expenses. The net margin fell by 317 basis points to 12.04% in FY13 on a YoY basis.

The company is debt free and consistently expands its market share by changing its product mix. P&G also enjoys the trademark of being one of the fastest growing FMCG company in India. Its products have good brand recognition among its customers. Thus investors can consider this scrip from a long-term perspective.