Stock Market Bliss | Top Indian Stock Market Blog

Colgate-Palmolive (India) - Consumer Products. Competitive position can potentially deteriorate. Colgate’s cost competitiveness is likely under threat starting FY2011E as the company will see a reversal of trends in the past four years (FY2005-09) in lower excise rates—down 650 bps to 3.6% and lower income tax rates. 50% of Colgate’s output is in excise-exempt zones, this is 80% for HUL, providing HUL an option to channelize the benefits to gain market share. Headwinds facing Colgate are (1) renewed aggression from HUL, (2) limited pricing power and (4) higher tax rates. Favorable factors are (1) strong momentum in market share gains, (2) penetration-led growth in Cibaca and (3) opportunity to moderately cut adspends in the near term. Investors can reduce the stock on rallies due to : (1) premium valuations for sub-par earnings growth in FY2011E, (2) HUL is now a threat as it has become more aggressive compared to its previous position of being satisfied with improving sales , (3) lim...

Tata Tea - Forays non-carbonated drinks - launches TiON . With tea volumes growing moderately in the domestic and international markets, Tata Tea (a strong player in the branded tea markets, both domestic and international) is seeking opportunities to expand its domestic as well as international beverage portfolio beyond tea and coffee, which could be a future revenue driver for the company. In line with its strategy, Tata Tea has launched TiON , a tea and fruit based cold beverage in three variants— Mango Rush, Peach Punch and Apple Buzz —in a 400 ml pet bottle. The launch is an attempt to capitalise on the emerging health and convenience food and beverages trend in India. The demand for carbonated drinks in India is softening, as more and more consumers (especially the youth) are opting for healthier beverages such as fruit juices and fruit-based drinks. Consequently, non-carbonated beverages are gaining good acceptance and the segment is growing at a healthy rate of 35-40% per ye...

Marico - Company Update: While the prices of sunflower , corn and rice bran oils have declined in the past few months, the matter that is of prime importance to Marico is the hardening of the price of its key raw materials, copra and kardi oil (safflower oil). These two commodities showed a significant decline in February 2009. Copra prices (the key raw material for the flagship brand, Parachute) have declined by 4.9% month on month (down 12.4% compared with the average prices in July 2008) whereas the price of kardi oil has fallen by 16.3%. The company’s Saffola volumes suffered in Q3FY2009 and grew by a meagre 3% yoy. This was on account of a hefty increase in the premium (currently about 50%) enjoyed by the Saffola products over the other edible oils due to a reduction in the prices of the latter as a result of the softening of the raw material prices. However, the management indicates that the volume growth has recovered slightly to mid single digits in Q4FY2009 till date. The...