While the market was basking in the glory of FMCG major Hindustan Unilever Ltd (HUL) stock hitting the year's high in the bourses after its stellar Q2 results early this week, two other FMCG giants have quietly joined HUL in the FMCG summit with their stocks hitting 52-week high in the exchanges on Friday.
Incidentally, the two other FMCG companies are also MNCs, reinforcing the unshakable hold MNCs have in the FMCG space. It is also interesting to note that while two of them — HUL and Colgate Palmolive — share some common product presence in the oral health care segment, the other FMCG, GSK Consumer Health Care, was in an entirely different product segment, which probably reflects the growing purchasing power and aspiration levels of the people across the country.
Robust results
HUL, which surprised the markets with its robust Q2 numbers, saw its share price hit a high of Rs 378.15 on Monday after the company announced that its Q2 net profit saw a 22 per cent jump and net sales went up by 18 per cent.
Subsequently on November 1, the stock hit a fresh 52-week high of Rs 393.20.
It has seen some selling pressure since then and the scrip closed at Rs 378.85 on Friday on the BSE. Its 52-week low price in the BSE is Rs 264.50 on March 21 this year.
Colgate Palmolive
On Friday, Colgate Palmolive India's shares too touched a high of Rs 1,084.30 on the BSE.
Though it later declined marginally to close at Rs 1,075.90, the stock had gained Rs 26.85 or 2.56 per cent.
The stock has gained nearly 35 per cent since hitting its 52-week low of Rs 783.20 on February 2, on the BSE.
Despite its product range not being so wide as its arch MNC rival HUL and is mostly limited to oral hygiene (tooth paste, mouth wash etc), that the stock has been appreciating indicated the dominant position it enjoyed in its product segment.
GSK Consumer Healthcare
GlaxoSmithKline Consumer Healthcare also raced to its 52-week high on the BSE on Friday, hitting a high of Rs 2,554. This stock also yielded ground at close, ending the day at Rs 2,499.30. But the day's gain was a massive Rs 104.35 or 4.36 per cent.
These two stocks like HUL also seem to be riding on the back of their excellent Q2 results. While GSK Consumer Healthcare posted a near Rs 100-crore jump in Q2 sales at Rs 720.07 crore (Rs 612.58 crore), its net profit saw a near-20 per cent jump at Rs 103.03 crore (Rs 78.57 crore). In its arsenal are nutritional products that are market leaders such as Horlicks, Boost, Viva and Maltova and OTC products like Crocin, Eno and Iodex.
Colgate, in Q2 of this year, saw a 19 per cent increase in net sales to Rs 657.2 crore (Rs 551.77 crore) but the net profit at Rs 99.68 crore was marginally less than last year's corresponding quarter's net profit of Rs 100.30 crore.
What has worked wonders for the shareholders of Colgate Palmolive (India) was its decision in 2007 to reduce its share capital by refunding Rs122.40 crore to its shareholders and cutting the face value of its shares from Rs 10 to Re1. This has brought down the size of its equity capital to a mere Rs 13.60 crore, boosting in turn the EPS.