Thread by @JRP980

Lots of talk about ITC.. people comparing ITC margins with HUL and other FMCG cos.. here are my thoughts.. thread #1/n

First lets look at ITC 10 year fundamentals.. No way its anything less any other good performing co.. It has continually generated good cash..

This is HUL

Compounded Sales Growth
10 Years:6.75%
5 Years:6.10%
3 Years:6.89%
TTM:10.59%

Compounded Profit Growth
10 Years:9.64%
5 Years:11.54%
3 Years:14.11%
TTM:18.67%

This is ITC

Compounded Sales Growth
10 Years:11.32%
5 Years:6.49%
3 Years:7.25%
TTM:11.29%
Compounded Profit Growth
10 Years:14.33%
5 Years:7.88%
3 Years:10.53%
TTM:15.06%

Now lets look at HUL in their initial days.. I have taken this from the Annual reports of HUL 2001. I couldn't find AR before. It has the HUL margins...

When people compare different companies.. they always compare with established player who incubated their brand for decades.. But if you look at those leader they also had to face small margins before they could take off..

They are already number 1 brand in Aashirvaad, sunfast cream biscuit, Bingo, matches (Aim/Ship) and number 2 in Yippe, Fiama, Savlon and Classmate. Plenty of other brands are emerging. These are no way easy goals to achieve competing with established players

ITC is investing lots of money into the produce before they even market and that is denting their margins. but people are concluding that they don't have pricing power..

ITC is a master brand builder.. They do go slow and steady.. they are building 20 ICMLS out of which 9 are ready and 2 are about to open.. 9 more are at difference status of developments.. they will come to work in coming years.. lets talk about FMCG margins then..

@dmuthuk #ITC #FMCG #HUL #undervalued

@unseenvalue #ITC #FMCG #HUL