EDELPULSE

CONSUMERGOODS
EdelPulse:DeconstructingGSTanditsimplementation
IndiaEquityResearch|Retail

In our constant endeavour to prescient trends before they become a

norm and in our continuing attempts to enlighten investors on GST, we
met over 50 large FMCG distributors, consultants/experts and several
companies from across India. Our discussions revolved around granular
details and teething problems that may arise on implementation of GST
(settorollfromJuly1,2017).Ourkeytakeawaysare:(a)destockinglikely
in June, but end consumer demand unlikely to see significant fall; (b)
working capital will increase marginally across the chain; and (c) larger
consumergoodscompaniesarelikelytoseemarketsharegainsfromlocal
players; and (d) compliance cost, procedures to increase initially. Most
large companies and distributors are prepared in terms of IT and back
end, but are apprehensive due to absence of procedural clarity. Among
the larger players, Hindustan Unilever, Nestle, Dabur and Colgate are
betterplaced,whilepaintcompanieslikeAsianPaintsandBergerareina
sweetspotduetothelikelyshifttoorganisedsegment.

Palpableexcitementamongdistributors;destockinglikelyinJune
With the deadline for GST registration coming to an end (30 April 2017), our channel
check suggests that most distributors have got themselves registered on the GST
portal.However,amidstexcitementandcuriosity,distributorsarestilltryingtofigure
outthemethodologytoavailinputtaxcredit,availabilityofcreditonthestocklying
from the preGST era, tax rates,etc.Webelieveakin to demonetisation, destocking
willbeseeninJune2017withrecoveryinJuly2017.Theonlydifferencethoughinthe
GSTerawillbethatendconsumerdemandwillnothavesignificantimpact,evenas
issueswillariseincaseofB2B.

Initialcompliancecostsandworkingcapitaltoedgeup
GSTisboundtousherin:1)betterefficiencyinthesystemviaeaseofdoingbusiness
(one tax rate subsuming all other taxes); 2) curtail cascading taxes; 3) faster
movement of goods; and 4) savings in logistics costs. However, we believe working
capital requirement will increase, especially as GST is levied on supply of goods
(coversevenstocktransfers).Bothcompaniesaswellasdistributorswillhavetopay
GST at the time of dispatch of stock even if they are supplied to their own
warehouses, and subsequently claim credit on the input tax so paid.Also,theinput
tax credit mechanism will entirely be online and on realtime basis. For instance, if AbneeshRoy
CompanyAsuppliesgoodstosay100distributors,itwillneedtouploadallinvoiceson +912266203141
abneesh.roy@edelweissfin.com
theGSTportal.IfCompanyAmissesuploadingsay510invoices,thedistributorwillnot
beabletotakecredit.Thiswillentailreconciliationprocessleadingtoatimelag. TanmaySharma,CFA
+912240407586
tanmay.sharma@edelweissfin.com
Further, many consumer goods companies currently have their factories in tax free
zonesanddonothavetopaytaxesonthegoodssupplied.UnderGST,suchcompanies AlokShah
+912266203040
willneedtofirstpaytaxandsubsequentlyclaimrefund.Thiswillalsoresultinhigher alok.shah@edelweissfin.com
workingcapitalrequirement(proceduraldetailsinside).
April24,2017

EdelweissResearchisalsoavailableonwww.edelresearch.com,
EdelweissSecuritiesLimited
BloombergEDEL<GO>,ThomsonFirstCall,ReutersandFactset.
 ConsumerGoods

Moreover,initialcompliancecostalsolikelytoincreaseforbothcompaniesanddistributors.
Theconsumergoodscompanieshavealreadystartedtakingpricehikes,benefitsofwhichwill
bepassedontothedistributorstomaintaintheirmargins.

Ratesoftax,themostsoughtafternumber
WhilealleyesareontheGSTCouncilsMay1819meetingwhenthelikelyGSTrateswillbe
finalisedandannounced,goingbythegeneraltoneofthefinanceministrytilldate,thelikely
taxratesseemtobeasfollows:(i)~70%ofthegoodswillfallunderthe18%taxbracket
thiscouldmeanthatmostofFMCGproductswillfallunderthiscategory,whichcouldbe
one of the biggest positives for the FMCG sector;(ii)processedgoodscouldfallunder5%
category;(iii)salt,milk,freshfruitsandvegetablescouldattractNILtaxrate.Theoverarching
confusion persists for the paint companies as on the one side there is a high chance of
these companies also falling in the 18% tax bracket. However, considering that paint
companiesarehighpollutingindustries,thetaxratemightbesetat28%.

However, if the tax rate for FMCG companies gets finalised at 18%, then there could be a
hugespurtindemandforthelargeFMCGcompaniesandcouldalsoentailashiftindemand
fromunorganisedtoorganisedsegment.

Stringentregulationslikelyformovementofgoods
Under GST, eway bills will need to be issued before goods are dispatched. It would be
importanttocarryewaybillsforthegoodsintransitasanauthorisedofficercouldintercept
theconveyance/truckstoverifyewaybills.Thiswillensurethatunaccounted/nontaxpaid
goodsaredisallowedandrestrictedfrommovingeasily.Itwillalsoleadthelargeorganised
playersgainingmarketsharefromtheunorganisedsegment.

WhataboutstocksheldinpreGSTera?
Onereasonfordestockinginthetradechannelistheambiguitysurroundinginputtaxcredit
on the goods already manufactured/bought in the preGST era. The draft GST rules has
clarified that as a part of transitional provisions, full VAT credit balance will automatically
become part of the opening balance availed under GST. Further, for goods lying at
warehouses on which excise duty is paid, excise duty so paid would become part of the
opening GST balance. However, if the excise value is not ascertainable then 40% of excise
otherwisepayableongoodswillbeconsideredforthepurposeofopeningtheGSTbalance.
Thisclaritywillgoalongwayinavoidingdestockinginthetradechannel.However,sincethis
claritywillnotbeavailableinthetradechannel(withinsmallerdistributors/retailers),some
levelofdestockingwillbeunavoidable.

Taxablevalueincaseofoffersandpromotions
While GST will be leviable on the transaction value, i.e., the value at which the goods are
supplied, the draft GST rules emphatically cover situations in which consumer goods
companiesundertakeoffersandpromotions.Thus,ithasalreadybeenclarifiedthatincase
anFMCGcompanyoffersextraportion(say20%free),GSTwouldstillbepayableonlyonthe
MRP excluding the fair value of that 20% product which has been given for free offers.
Further,evenincaseofBUYONEGETONE(BOGO)offers,GSTwouldbepayableonlyonthe
value at which the goods are sold. This will ensure that the GST incidence on items under
offers/promotionsisnotembeddedintheMRP,therebykeepingthesalepriceundercheck.
Weseethisasabigpositiveforthesector.

2 EdelweissSecuritiesLimited
 SectorUpdate

Apart from this, below are our specific findings while interacting with consumer goods
companies.

ConsumercompaniesGSTready,butwhataboutothers?
As the much awaited GST implementation deadline of July 1, 2017 draws closer, consumer
goods companies are gearing for its seamless implementation. Our interactions with
consumer goods companies indicate that most players had commenced the process to be
GSTreadyalongtimeagoandhavetheITsystemsandprocessesalreadyinplace.Mosthave
set up separate GST committeestotakecareofallthesystems,processesandcompliance
required under the new regime and a few have also appointed consultants from the Big
FourPWC,Deloitte,EY,KPMG.Notonlyinternal,butevenITsystemsofsalesforceshand
helddeviceshavebeenupdated.Thus,ourinteractionsindicatenosignificantissuesasfaras
GSTimplementationisconcernedfromthecompanyend.

However, the state of affairs as far as other stake holders in the systemdistributors,
wholesalers etc.is starkly different. But, on the positive side, all consumer goods
companiesareplanningtoengagewithdistributorstoensurethatthelatterareregistered
withtheGSTdepartment&havethesoftwareofcompaniesinstalledintheirsystemsandare
alsoplanningtoholdsessionstoeducatedistributorsaboutcomplianceandotherpaperwork
involved.

Fig.1:FMCGcompaniesanddistributorsLargelyGSTready

FMCGcompany
LargelypreparedforGST
implementation

Distributor

Wholesaler Expect pushback

consideringincreased
compliancecosts
Retailer

Consumer

Source:Edelweissresearch

Willitbeasmoothimplementation?

Implementation at the distributor end should not be a major issue as they are already
compliant and have been a part of the VAT regime. Hence, they are involved in taking the
inputcreditandlevyingVATonoutput.Weanticipatesomeproblemsatthewholesalerend
asmanyareoutsidethetaxbracketandafewareimprovingtheirmarginssolelybywayof
tax evasion (afew operate on wafer thin margins of close to 1%, by being out of the tax
net). Wwholesalers make gains from unbilled goods which do not attract VAT. Hence, if a

3 EdelweissSecuritiesLimited
 ConsumerGoods

productwhich shouldhavecostthewholesalerINR112.5(assuming12.5% VATandINR100

productcost),costshimonlyINR100.

However,underGST,itwillbedifficulttoevadetaxes.Hence,weanticipatesomepushback
from wholesalers (and also some distributors/ stockists who are outside the taxation net)
whichcouldleadtosomeissuesintrade.Demonetisationhasalreadyimpactedthebusiness
ofwholesalersanddistributionchannelsofconsumercompaniesarealreadygoingthrough
changesdirectdistributionhasnotbecomeabiggerfocusofcompaniesandwithGSTalso
cominginitshouldbethewayforward.

Though HUL (has already more than tripled its direct reach from 0.9mn outlets in 2009 to
3.2mnin2013),Dabur(startedProjectDoubleandincreasedruralcoveragefrom14,000to
44,000villagesbyFY15in3years),Marico(runningProjectONEstartedwiththeobjectiveto
increase direct coverage in top 6 metros which has been merged into regular distributor
coverage), Godrej Consumer (GCPL; urban direct outlet coverage expanded by over 20%in
past 18 months till FY15), among others, sharpened focus on deepening direct coverage,
somehowithaswanedoverthepast12monthsasgrowthintheconsumergoodsspacehas
slackenedandfocushasshiftedtoincreasingqualityofcoverage.However,demonetisation
hascompelledplayerstoonceagainturnthespotlightonexpandingdirectcoverage.

Table1:Currentdirectandoverallreachofafewconsumergoodscompanies
Distributionreach(inmn) Direct Total Directdistributionasa%oftotal
HUL 3.2 7.0 45.7
Britannia 1.4 4.6 30.4
Colgate 1.3 5.0 26.0
Dabur 1.0 5.3 18.9
GCPL 1.0 4.5 22.2
GSK 1.0 3.3 30.3
Jyothy 1.0 2.9 34.5
Marico 0.8 4.0 20.0
BajajCorp 0.7 2.9 24.1
Emami 0.6 4.0 16.0
Source:Company,Edelweissresearch

Willcostofbusinessrise,inturndentingmargin?

WholesaleisapivotalchannelintheoveralldistributionchaininIndiaandconstitutes3545%of
overalltrade.Particularlyinareaswhereitisnotfeasibleforconsumergoodscompaniesto
havesalesforce/directdistribution,wholesalersplayanimportantrole.Hence,weexpect
consumergoodscompaniestoencouragewholesalers(astheywillhavetofaceincreased
compliance costs and taxation) to come in to the organised bracket. This could push up
overall distribution costs of companies, which in our view should not be more than 50
60bpsandwillbeaonetimeexerciseasthesamecanbeeasilypassedontoconsumers.
Ergo,consumercompanieswithhighershareofbusinesscomingfromthewholesalechannel
couldfeelsomeimpactintermsoftraderealignmentandsomeincreaseindistributioncosts.

4 EdelweissSecuritiesLimited
 SectorUpdate

Table2:Shareofwholesalechannelfordifferentdistributioncompanies
Company Wholesaleasa%oftotaltrade
AsianPaints Nil
Britannia 2530
HUL 30
Dabur 35
Marico 35
JyothyLabs 40
BajajCorp 40
GCPL 4045
Colgate 4550
GSKConsumer 50
Emami 50
Source:Company,Edelweissresearch

Fig.2:GovernmentadvertisementencouragingmigrationtoGSTregime

Source:Media

CanJune2017belikeNovember2016?
We anticipate channel realignment by way of destocking in June 2017 (provided GST is
implementedonJuly1).Thereisahighprobabilitythattrademaystartdestockinginventory
due to nonclarity on GST rates (we expect GST rates to be announced very close to the

5 EdelweissSecuritiesLimited
 ConsumerGoods

implementationdate).Butunlikedemonetisation,wheretheimpactlastedformorethana
quarter,GSTimplementationleddestockingimpactislikelytobeforalesserduration.

WhathappenedwhenVATwasintroducedin2005?
WhenVATwasimplementedw.e.f.April1,2005,tradersacrossIndiahadgoneonastrikein
protestandhaddisruptedtrade,whichhadimpactedthebusinessofFMCGcompanies.

CommentarybyconsumergoodscompaniesrelatedtoVATduring2005:

DaburIndia:However,therewaspoorofftakebyinstitutionalbuyersduetoissuesarisingout
ofVATimplementationinthefirstquarteroftheyear.Thesehavebeensubsequentlyresolved.

Marico:VAThasevokedamixedresponse,withtradersinafewstatesgoingondaystrikes.
The matter is, however, expected to stabilise over the next couple of months as benefits of
VAT become clearer. Marico's turnover in the first quarter of FY06, like all other industry
players,islikelytobeimpactedtothetuneof1015%inApril.

Emami: The concerns and confusions in the trading community, over the impact of
implementationofVATw.e.f.April1,2005,alsoaffectedofftaketowardstheendoftheyear.

However, under GST, we perceive less likelihood of trade disrupting business by way of
strikesetc.ThereasonbeingthatunderGSTthingshavebeenplannedinamuchbetterway.
Moreover,unlikeVATwhereeachstatedecidedrates,GSTispanIndiaandaseparateGST
committeehasbeensetuptomakeensurethatthingsareclearinadvanceandrunsmoothly.

Opportunityfororganisedplayerstomakemarketsharegains
GST will be one of the biggest drivers propelling shift from the unorganized to organised
sector.Organisedplayerswillmakemarketsharegainslargelyincategorieswheretheshare
of unorganized segment is higheralmost one third of the overall FMCG market is
unorganized. Also, those categories where penetration levels are lower will tend to gain
more compared to highly penetrated categories.EvenwhenVATwasimplemented,afew
unorganisedplayershadtoshutoperationssincetheirbusinesseshadbecomeunviable.

Table3:Shareofunorganisedsegmentinafewkeycategories
Segment Shareofunorganisedandlocalplayers(%)
Toothpaste 5.0
Soaps 5.0
Valueaddedhairoil 10.0
HouseholdInsecticides 10.0
Haircolor 25.0
Biscuits 30.0
Paints 35.0
Coconutoil 35.0
Dairy 70.0
Jewellery 85.0
Source:Company,Edelweissresearch

Stringent compliance norms will hit unorganised players in the GST regime. GST, a
destinationbased tax, will create a trail of different transactions. At every level, credit
mechanism has moved on online GST portal this would ensure either the unregistered
dealerstolosebusinessormovetomainstreamtaxnet.Inaddition,therecentprocedureof
6 EdelweissSecuritiesLimited

GSTwillenabletrackingof
movementofgoodsacrossstates,
highercomplianceandwidenthe
taxbase
SectorUpdate
transport of goods via eway will further ensure reduction in movement of non tax paid
goods. In addition, the entire process will result in lower logistics costs due to decline in
transit time on account of elimination of multiple check points (octroi/state borders) and
consolidationofwarehouses.ThiswillreducepanIndiaorganisedplayerslogisticscostsand
enablethemtocompetewithregionalunorganisedplayerswhoincurlowerlogisticscosts.
Fig.3:AfterGSTcompletetrackingofgoodsacrossvaluechain
Distributor/
Manufacturer Retailer Consumer
dealer
Source:Edelweissresearch
Businessefficiencytoimprove
The current indirect tax regime in India is a complex multilayered system under which
governments at various levelscentre, state and localhave the power to levy taxes at
different points in the value chain. This creates a complex structure, cascading impact of
taxation,hindersinterstatetradeandtriggerslitigation. However,GSTbeingtheonlyduty
willsubsumeothertaxessuchasservicetax,exciseduty,VAT,CST,Octroiandentrytax.
KeybenefitsforconsumergoodscompaniesunderGST:
Easeofdoingbusiness:Underthecurrentregimetherearedifferenttaxestobepaidby
thecompanyrangingfromexcisetoVATetc.,consumergoodscompaniesarerequired
tofiledifferentreturns(forVAT,exciseetc)andwithdiversetaxdepartments.However,
underGST,therewillbeasingletaxacrossIndia,curtailingcomplexityinbusiness.Also,
thegovernmenthassetuparobustITinfrastructurewhichwillmakesystemseasyfor
businessintermsofreturnsfiling,formsubmission,payments,refundsetc.
Table4:AfewtaxesthatwillsubsumeunderGST
CentralIndirectTaxes StateIndirectTaxes
CentralExcise VAT/SalesTax
ServiceTax Entertainmenttax(otherthanthoseleviedbylocalbodies)
AdditionalExciseDuty CentralSalesTax
Octroiandentrytax
Purchasetax
Luxurytax
Source:Industry
Reduced cascading effect: Currently, consumer goods companies are unable to take
creditoftaxespaidundercentralsalestax,interstateVAT,octroi,localbodytaxesetc.,
leading to cascading effect (tax on tax). However, GST will eliminate this as it will
subsume these taxes with only one tax. This can lead to some savings for consumer
goodscompaniesbutwayofhighercreditoftaxes.
Fastermovementofgoodsandsavingsinlogisticscosts:GSTimplementationwillentail
fastermovementofgoodsasinterstatetaxessuchascentralsalestax,localbodytaxes,
octroi etc., will be subsumed, eliminating delays at check posts, leading to better
movement of inventory. Also, it is expected that as the requirement of increased
7 EdelweissSecuritiesLimited
 ConsumerGoods

logistics will increase transportation companies will achieve better economies of scale,
which will lead to lower travel costs per km. Apart from this, absence of CST will
precludetheneedtokeepadditionalwarehousesineachstatetosaveinterstatetaxes,
encouraging the hubandspoke model. Hence, under the GST regime decisions on
warehousinganddistributionwillbebasedpurelyonoperationalandlogisticsefficiency
andnottaxconsideration.

Table5:Depotrationalisationandsupplychainmanagement

Supplychain Warehouse/
Company Distributor Retailer Customer
Depot

CurrentsituationInterstatesaletodistributorCSTapplicable
CostofProd'n 200 287 345
Margin 50 20 10
Total 250 NA 307 355 Pricetoconsumer
Excise@12.5% 31
Total 281 307 355 361
CST@2% 6
VAT@12.5% 38 44
VATsetoff (38)
Total 287 345 361

CurrentsituationLocalsaleviadepot/warehouse:
CostofProd'n 200 281 281 339
Margin 50 20 10
Total 250 281 301 349 Pricetoconsumer
Excise@12.5% 31
Total 281 281 301 349 355
VAT@12.5% 38 44
VATsetoff (38)
Total 281 281 339 355

UnderGST:

Warehouse/
Company Distributor Retailer Customer
Depot

CostofProd'n 200 Notrequired 300 334

Margin 50 20 10
Total 250 320 344 Pricetoconsumer
GST@20% 50 64 69 349 3.5%
GSTsetoff (50) (64)
Total 300 334 349
Source:Edelweissresearch

8 EdelweissSecuritiesLimited
 SectorUpdate

Ultimatecosttoconsumersmayfallby3.5%(at20%GSTrate)to5.7%(at18%)underGST.
Theoretically,companieswithvariousdepots/warehousessetupacrossstateswillbenefitin
the 23% range. They will save on warehousing costs due to rationalisation of warehouses.
However, as far as savings are concerned in terms of rationalisation of warehouses, we do
not expect much of rationalization to happened considering the fact that most of the
consumergoodscompaniesareoperatingatclosetooptimumnumberofwarehouses.Also,
companiesoperatinginbulkyinventorysuchaspaintswillhavelowerscopeofrationalisation.
Even in case of nonbulky products such as personal care, rationalisation will not be
significantandlimitedtoonlyacoupleofwarehousespercompany.

butwithhigherworkingcapitalrequirement
Though GST will usher in efficiency and ease of doing business, it will lead to marginal
increase in working capital requirement for various stakeholders in the overall distribution
chainrightfromtheconsumergoodscompaniestodistributorstowholesalerstoretailers
essentiallyonaccountofGSTbeingleviedonsupplyofgoodsevenifthatsupplyisbetween
warehouses.

Theimpactofhigherworkingcapitalwillbeinthefollowing2areas:
Highercostofprocurement:UndertheGSTregime,acompanywillberequiredtopaytaxin
caseofinterstatetransferofgoodstothebranchwhichisexemptunderthecurrentregime.
Hence,nowwhenthecompanytransfersgoodstoitsbranchinotherstateitwilltransferthe
sameatcostsplustheGSTrateandwillhavetopayGSTtothegovernment.However,itwill
get the credit of GST paid only when the brand to which the goods have been transferred
sellsthesame.Thus,therewillbeincreasedrequirementofworkingcapital.However,itwill
be more of a challenge to a smaller player who works on lower working capital. Also, the
impactcanbehigherforseasonalbusinesseswheremajorityoftheactualsalehappensina
particularpartoftheyear,whilemanufactureandtransfercanhappeninotherpartofthe
year,leadingtolargerworkingcapitalrequirement.

Also, under the current regime when a consumer goods company transfers goods to a
distributor,itleviesVATonthesamewhichcanbeinthe114%rangedependinguponthe
product.However,onceGSTisimplemented,thelevycanbehigher(18%onessentialgoods).
Hence, it will increase cost of procurement for distributors who will get credit of the same
onlywhenitissoldbythem,leadingtohigherworkingcapitalrequirement.

Availing refund for excise free zone: Another area where the working capital requirement
willincreaseisinsalesfromexciseexemptplants.Underthecurrentregime,excisedutyis
notleviedonproductionsoldfromexciseexemptplants(inHimachalPradeshetc).However,
underGSTcompanieswillhavetopayGSTonsuchproducts,butwillbeentitledtorefunds.
Ergo,thiswillentailhigherworkingcapitalastherefundcreditwilltaketime.

Significantmarginexpansionunlikelyforconsumergoodscompanies
The GST draft has also proposed antiprofiteering measure which will restrain companies
from keeping tax advantage that they may get due to lower tax rate with them and make
increased margins. Hence, we anticipate consumer companies to pass on some of the
benefitstoconsumers,increaseadspends,alsothebenefitswillbepassedonaftertakingin
to account the increased costs of compliance costs and increased distribution margins
(providedconsumercompaniesaccepttobearthesame)thattheymighthavetopaytothe

9 EdelweissSecuritiesLimited
 ConsumerGoods

distributorfortheirincreasedcosts.However,itwillbedifficultforthegovernmenttotrack
theantiprofiteeringmeasureduetopresenceofvariousmovingpartsinacompanyscost
structure.

GoingbytheGSTCouncilsrecentcommentaryitislikelythatmostrateswillbearoundthe
ratethatisleviedunderthecurrentregime.Hence,evenifthereisnoantiprofiteeringrule,
theratedifferentialisnotlikelytobesignificantsoastowarrantasharpmarginexpansion.

ThoughfinalratesunderGSTarenotoutasyet,thefinanceministerdidmakeitclearthat
dailyconsumptiongoodssuchassoaps,toothpasteetc.,wheretheoveralltaxrateiscloseto
2324%willbechargedatalowerrateof18%.Inourview,itwillbenefitcompaniessuchas
HUL(especiallysoapbusiness),GCPL(especiallysoapbusiness)andColgate,whomayhaveto
passonbenefitstoconsumers,whichinturnwillleadtobettervolumes.Apartfromthis,we
alsoexpectoveralltaxationtonotbesignificantlydifferentforITC(GSTplussincessshould
largely be equivalent to current VAT plus excise) further corroborated by the state of
Karnatakaminister(partoftheGSTCouncil).

Table6:Cumulativetaxpaidundervariouscategoriesbysomeconsumercompanies
Company Category Currentcumulativetaxrate
AsianPaints Paints 2324%
Colgate Toothpaste 2324%
Dabur Companylevel 1718%
Personalcare 2324%
Foods 1011%
Ayurvedic(healthcare) 1112%
Emami Companylevel 56%
HUL Soapsanddetergents 2324%
Personalproducts 2324%
GCPL Companylevel 2223%
ITC Cigarettes 6570%
Marico Companylevel 1718%
Coconutoil 89%
Edibleoil 89%
Valueaddedhairoil 2324%
Source:Company,Edelweissresearch

10 EdelweissSecuritiesLimited
 SectorUpdate

EdelweissSecuritiesLimited,EdelweissHouse,offC.S.T.Road,Kalina,Mumbai400098.
Board:(9122)40094400,Email:research@edelweissfin.com
Digitally signed by ADITYA NARAIN

ADITYA
DN: c=IN, o=EDELWEISS SECURITIES
AdityaNarain LIMITED, ou=HEAD RESEARCH,
cn=ADITYA NARAIN,
serialNumber=e0576796072ad1a3266c2
7990f20bf0213f69235fc3f1bcd0fa1c3009
Headof Research
NARAIN
2792c20, postalCode=400005,
2.5.4.20=3dc92af943d52d778c99d69c48a
8e0c89e548e5001b4f8141cf423fd58c07b
aditya.narain@edelweissfin.com 02, st=Maharashtra
Date: 2017.04.24 15:47:24 +05'30'

Coveragegroup(s)ofstocksbyprimaryanalyst(s): ConsumerGoods
AsianPaints,BajajCorp,BergerPaints,BritanniaIndustries,Colgate,Dabur,GodrejConsumer,Emami,HindustanUnilever,ITC,Marico,NestleLtd,Pidilite
Industries,GlaxoSmithKlineConsumerHealthcare,UnitedSpirits

RecentResearch
Date Company Title Price(INR) Recos

17Apr17 BajajCorp CageyquarteramidDeMon 402 Hold

aftermath;ResultUpdate
07Apr17 Hindustan Pruningcosts:Takingaleaf 935 Hold
Unilever outofUnileversbook;
EdelFlash
21Mar17 Consumer CountdownonGST:Are
Goods consumercompaniesready?;
SectorUpdate

DistributionofRatings/MarketCap
EdelweissResearchCoverageUniverse RatingInterpretation

Rating Expectedto
Buy Hold Reduce Total
RatingDistribution* 161 67 11 240 Buy appreciatemorethan15%overa12monthperiod
*1stocksunderreview
Hold appreciateupto15%overa12monthperiod
>50bn Between10bnand50bn <10bn
Reduce depreciatemorethan5%overa12monthperiod
MarketCap(INR) 156 62 11

11 EdelweissSecuritiesLimited
 ConsumerGoods

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12 EdelweissSecuritiesLimited
 SectorUpdate

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13 EdelweissSecuritiesLimited
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14 EdelweissSecuritiesLimited