Well-established distribution networks, intense competition between the organized and unorganized segments characterize the FMGC sector. It is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise from around Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments, says an HSBC report. Though the sector witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since then. For example, Indian Tobacco Company Limited (ITC) has shown a healthy growth in the last quarter. An estimated double-digit growth over the next few years shows that the good times are likely to continue.With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income rise in 2008, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption.
[...] Figure VI Debtor Days: This calculation shows the average number of days it takes a company to receive payment from its debtors, the lower figure the better. A high figure suggests inefficiency or potential bad debts. The graph below for the ITC group reflects a fall in the debtor days of the company. Though, over the period, the total debt to the company has shown an increase, the sales have risen more than proportionately reflecting in lesser credit given to buyers. [...]
[...] Also, while the increase in the interest coverage for HLL is about 1287%, the ITC Group shows a fabulous 1772% increment in the interest coverage ratio in three years. On the other hand, Marico Limited uses more and more debt to fund its operation resulting in a lower interest coverage ratio when compared to oneself two years back! Figure XXXIV Debt to Total Funds: Comparatively, HLL, also a very big organization with a significant time period of existence in the market gets self funded and thereby has let go off its debt in the three years. [...]
[...] In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September The Company now stands rechristened INTRODUCTION: ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 15 billion and a turnover of over US $ 4.75 billion. [...]
[...] EPS is increasing continuously year by year but the value of EPS is quite small ( 6.08 in 2006) due to a large no of shareholders. In generating revenue the contribution of non tobacco products has been increased from 2363 crores to 8481crore In generating profit the contribution of non tobacco products has been increased from 99 crore(6%) in 2002 to 689 crore in 2007. Expenditure (cost of goods sold + selling & administrative expense) is also in creasing year by year. [...]
[...] It is observed that ITC has reported a gradual and continuous increase in profit over the last three years of operation. Also, the company's interest amount has gone down significantly over the last three years. This has resulted in a two way push in the figure for Interest coverage ratio, which is measured as shown above. Figure X Debt to Total Funds: The ratio here is self explanatory and measures the share of the debt to the total capital employed (funds) in the company. [...]
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