Professional Documents
Culture Documents
By Group:5
Ankit Saklani- 13P125
Ashima Tayal- 13P130
Jain Himanshu Hemant- 13P143
Kaushik Trilok Nihalani- 13P148
Rattan Preet Singh- 13P161
Shahshank Shukla- 13P166
Marico
0.33
Emami
0.06
Unsystematic Risk
ITC: 80% of the PAT for the company comes from Cigarettes
segment
High taxes on cigarettes have increased the cases of
smuggling
Marico: Overly reliant on oil (hair and cooking) segment
Exposure to international markets is up to 22% of
Investment Returns
ITC:
The growth in RoE and RoCE is almost
constant
Difference in RoE and RoCE is due to
the taxes paid by ITC as cigarette are
taxed heavily
Large chunk of money received as
Marico:
income
from dividend and interest on
Engaged
in aggressive Greenfield
current investments
expansion fueled mostly by debt
Hence RoE and RoCE values been very
erratic
Since 2005, 12 brand acquisitions
Most investments been made in
Purchase of Fixed assets or Purchase of
Emami:
investments
Acquired Zandu Pharmaceutical Ltd in
2009
RoE and RoCE went down in 2010 as
acquisition was funded by a mix of
debt and equity
Most investments made in FA or
Capital Structure
ITC: Being a market leader can dictate
terms to both suppliers and retailers
Thus, debt requirement is very low
Follows NOI based approach for Capital
Structure
Marico: driven by debt to support
acquisitions
reflected in the high debt-equity ratio
In 2012-13 decided to put a hold on
acquisitions
Normalized Cash Flow
250.00
Emami
D/E reached a high value of 1.49 in 2009 due to
acquisition of Zandu
Currently 0.06%, which is in line with the industry
from Operations
237.78
203.00
200.00
150.00
122.80
100.00
50.00
0.00
2008-09
2009-10
2010-11
2011-12
2012-13
Dividend Strategy
Working Capital
ITC: a sudden reduction in creditor days in 2011-12
Since then, the cash conversion cycle for ITC has become positive before that, it was negative
And net change in Current Investments has also been negative impacting the treasury
operations for the company
Marico: sudden increase in Inventories for the year 2011-12 on account of the acquisition
Paras Pharmaceuticals
That was the reason that the Cash Conversion Cycle of Marico became positive since 2010-11
Emami: working capital has been negative for all the five years
Trade Payables have been falling consistently and that has impacted the Cash
Conversion Cycle
Thank You