P&G Q1 Results Review - Topline Below Our Expectation; Ad-Spends Mount Sequentially: Motilal Oswal

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Motilal Oswal Report

Procter and Gamble Hygiene and Health Care Ltd. reported high single-digit sales growth in Q1 FY24 (ending in June), surpassing our initial double-digit growth expectations. Profit after tax up 36% YoY driven by an increase in volume growth, a favorable product price-mix, and enhanced productivity.

Gross profit margin has been expanded 230 bps, while operating margin expanded by 450 bps owing to the benefit of operating leverage. Ad-spends mounted sequentially to 13.5% of sales from 6.3% (albeit, declined 140 bp YoY) during the quarter.

P&G continues to grow with strong product portfolio of sanitary napkins and healthcare business, superior consumer communications and stream of product innovations.

With the challenging valuations of ~64.9 times FY24E earnings per share/~54.4 timesFY25E EPS led us to maintain our 'Neutral' rating on the stock.

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Motilal Oswal P&G Q1 FY24 Results Review.pdf

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