INSUBCONTINENT EXCLUSIVE:
That script now seems to be changing, and changing rather quickly
Business models that have largely been commoditised no longer offer the margin of safety they once did.
The cement sector is one such
So, investors should look at companies with distinctive moats, strong cashflows, and predictable profits.
HINDUSTAN UNILEVERHindustan
One, its product portfolio is aspirational in nature
Two, these brands are sold at a premium to products from the unorganised segment
In the past 10 years, the company has increased prices of its products at a CAGR of 12%, which has ensured superior volume growth than
It is known for its brands Wills Navy Cut, Gold Flake Kings and Gold Flake Premium lights
It commands 75% total cigarette volumes in India
It serves as a huge entry barrier for other consumer staples companies to replicate
Analysts believe that the company's cigarette volumes are expected to stabilise and increase in the coming quarters.
ASIAN PAINTSAsian
Paints has more than 50% market share in the decorative pain segment
Its large distribution network, which is almost two times that of its nearest competitor, wide product offerings which cover most price
It has close to 53% volume share in the toothpaste category and 45% market share in the toothbrush category
The company has better free cash flow generation compared to its peers in consumer staples, thanks to its strong brand, prompt efforts at
(known for its brand Fevicol) and industrial chemicals.
Post the implementation of the Goods and Services Tax (GST), the company has shown
better resilience than its peers in terms of sustained volume growth.
Besides, the management's attention to expansion without resorting
to high debt --- seen in its recent acquisitions --- shows that it believes in steady and sustained earnings growth.
PROCTER GAMBLE HEALTH
HYGIENEProcter Gamble Health Hygiene (PGHH) is the largest player in the sanitary pads segment which is still an underpenetrated market
PG HH is also present in health space through brands like Vicks.
In the listed space, the company has no peer which itself gives it an edge
over other companies in consumer staples space.
