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• Government of India is still trying to improve the GDP of the country and therefore several
steps have been taken to boost the economy. Policies of FDI, NRI investment have been
framed to give a push to the economy.
Inflation Rate
• INFLATION- The overall inflation average for the month of April 2010 stood at 9.6% as
compared to growth of inflation of 1.3% seen in the same month of last year.
• The broader price index as measured by the Wholesale Price Index (WPI) touched a 16 month
high of 9.89% in the month of February 2010, up from 8.56% in the previous month.
Interestingly, during the corresponding month last year, inflation rate was 3.50%.
• The rise in inflation was broad-based with non-food items such as cement, metals and
machinery becoming costlier over the month, after manufacturers raised prices to absorb
rising input costs. Inflation in manufactured items too has surged from 6.55% (in January
2010) to 7.40% in February 2010.
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 16.22 14.86 14.86 13.33 13.91 13.73 11.25
2009 10.45 9.63 8.03 8.70 8.63 9.29 11.89 11.72 11.64 11.49 13.51 14.97
2008 5.51 5.47 7.87 7.81 7.75 7.69 8.33 9.02 9.77 10.45 10.45 9.70
Interest Rate
A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual
percentage of the principal. It is calculated by dividing the amount of interest by the amount of
principal. Interest rates often change as a result of inflation and Federal Reserve policies. For
example, if a lender(such as a bank)chargesacustomer$90 in a year on a loan of $1000, then the
interest rate would be 90/1000 *100% = 9%.
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 3.25 3.25 3.38 3.63 3.75 3.75 4.08 4.50 5.00
2009 4.50 4.00 3.75 3.38 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25
2008 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 5.50
(i) INDUSTRY ANALYSIS
FMCG industry, alternatively called as CPG (Consumer packaged goods) industry
primarily deals with the production, distribution and marketing of consumer packaged
goods. The Fast Moving Consumer Goods (FMCG) are those consumables which are
normally consumed by the consumers at a regular interval. Some of the prime activities
of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also
engaged in operations, supply chain, production and general management.
• Two largest segments such as consumer care (hair care, oral care, health supplements,
homecare and skincare) and foods have shown strong traction in business in the domestic
market, as they reported a healthy growth of 20.5 per cent and 24 per cent in sales at Rs 704
crore and Rs 132 crore, respectively.
.
Exhibit 15: Growth assumptions for the Consumer Care division (%)
M M
Ma Ma ar ar
r ' r ' ' '
10 09 08 07 Mar ' 06
Sources of funds
Owner's fund
86
86.7 86. 86. .2
Equity share capital 6 51 40 9 57.33
44 31
662. 651 1.9 6.
Reserves & surplus 48 .69 2 90 390.54
Loan funds
19
24.2 8.2 16. .2
Secured loans 7 6 45 8 19.23
54 42
855. 877 5.0 2.
Total 45 .17 1 73 468.35
Uses of funds
Fixed assets
M M
Ma Ma ar ar
r ' r ' ' '
10 09 08 07 Mar ' 06
46 40
687. 518 7.9 4.
Gross block 23 .77 3 30 328.23
18 16
236. 210 9.7 8.
Less : accumulated depreciation 28 .45 7 97 142.46
27 23
450. 308 8.1 5.
Net block 95 .32 7 33 185.77
27 14
348. 232 0.3 5.
Investments 51 .05 7 35 275.08
61 37
Less : current liabilities & 911. 696 0.5 9.
provisions 83 .97 7 27 324.12
33. .5
4 .45 75 2
19
8.6 13. .8
Miscellaneous expenses not written 2.74 4 95 2 32.87
54 42
855. 877 5.0 2.
Total 45 .17 1 73 468.35
2010 Oct -
2009 Oct 75
2009 Jan 75
2008 Apr 75
2007 Oct 75
2007 Mar 75
2006 Oct -
2003 Oct 60
2003 May 90
2002 Oct 50
2002 Jun -
2001 Nov 50
2001 Jul 50
2000 Apr 50
2000 Jan 50
Inflation
Rate
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 16.22 14.86 14.86 13.33 13.91 13.73 11.25
2009 10.45 9.63 8.03 8.70 8.63 9.29 11.89 11.72 11.64 11.49 13.51 14.97
2008 5.51 5.47 7.87 7.81 7.75 7.69 8.33 9.02 9.77 10.45 10.45 9.70
The inflation rate is the percentage by which prices of goods and services rise beyond their average
levels. It is the rate by which the purchasing power of the people in a particular geography has
declined in a specified period. The rate of inflation may be calculated weekly, monthly or annually.
However, it is always expressed as an annualized figure.
Presence in FMCG
Industry
Category Key Brands
Position Market
Share
Dabur Amla hair Oil, Vatika hair oil &
Hair Care Vatika Shampoos
3
Red toothpaste, Babool, Meswak, Red
Oral Care toothpowder
12%
Digestives 3 Hajmola
7%
Fruit Juices Real Fruit Juices, Real Activ
1
Honey Dabur Honey
63%
Glucose Dabur Glucos
1
55%
52%
50%
24%
TECHNICAL ANALYSIS
• “Technical analysis refers to the study of market generated data like prices &
• Technical analysis mainly seeks to predict the short term price travels. It is
important criteria for selecting the company to invest. It also provides the
base for decision-making in investment. The one of the most frequently used
yardstick to check & analyze underlying price progress. For that matter a
provides important & vital information regarding the current price position of
the company.
calculating & interpreting graph & chart to assess the performances & status
of the price. It is the tool of financial analysis, which not only studies but also
financial factors.
• Usually the following tools & instruments are used to do
the technical analysis:
• Price Fields
volume. The fields which define a security's price and volume are explained
below.
• Open - This is the price of the first trade for the period (e.g., the first trade of
the day). When analyzing daily data, the Open is especially important as it is
the consensus price after all interested parties were able to "sleep on it."
• High - This is the highest price that the security traded during the period. It is
the point at which there were more sellers than buyers (i.e., there are always
sellers willing to sell at higher prices, but the High represents the highest
• Low - This is the lowest price that the security traded during the period. It is
the point at which there were more buyers than sellers (i.e., there are always
buyers willing to buy at lower prices, but the Low represents the lowest price
• Close - This is the last price that the security traded during the period. Due to
its availability, the Close is the most often used price for analysis. The
relationship between the Open (the first price) and the Close (the last price)
are considered significant by most technicians. This relationship is
• Volume - This is the number of shares (or contracts) that were traded during
the period. The relationship between prices and volume (e.g., increasing
• Open Interest - This is the total number of outstanding contracts (i.e., those
that have not been exercised, closed, or expired) of a future or option. Open
The technical chart above is being drawn by taking the monthly closing prices of
the share price of Dabur India ltd. The closing values of each day have been
compared by taking the time period of 3 months.
From June to the end of August, there are normal fluctuations in the value of the
share of Dabur India ltd. But the technical analysis shows a sudden downfall in the
value of the share, especially in the month of September. This fall shows the large
withdrawal of money by institutional investors.
Now the analysis is done for the period of 6 months. Major inferences drawn
from the analysis are:
1. In the above analysis we have observed that the price of the share
suddenly fell down in September to Rs.100 & even below that, but here
we can see that the share has gained the momentum pretty quickly.
2. Sharp rise can be observed from February to March.
3. Then a sharp fall is registered in between March & April.
4. Then the prices have been continuously increasing despite of normal
fluctuations till the month of may
• For One year
Now the period of analysis is 1 year & major inferences drawn are as
follows:
The biggest inference we can draw is that again in the month nearby
September, the price of the share has fallen drastically. We observed a major
fall in the price of share of Dabur in the month of September last year, i.e,
2009 & now again in the month of September in 2010 the share price has
fallen down to almost same level, i.e, 100 approx.