The Hindu Business Line : Investors flocking Gillette counter

Brokers said that given that competitive risk remains low for the company, the stock presents attractive potential via-a-vis other FMCG companies. According to market sources Vector and Mach III remain the key growth drivers for the company, nullifying market concern of down-trading risk.

According to Mr Nikhil Vora, Vice-President research, SSKI Securities, the company's grooming business will remain unmatched. "Mach3 and Vector Plus continue to drive the growth momentum in the grooming business. Grooming which is the fastest growing category within Gillette is also its most profitable and generates the highest RoC.

"Grooming now accounts for 79 per cent of revenues and 83 per cent profitability, with EBIT margins of 40 per cent. As per our reading of the business, the past three years has seen a sustentative capacity of systems seeded in the market and incremental demand will be cartridge driven leading to higher profitability," he added.

Analysts maintain that the company is looking at a CAGR of 45 per cent through CY05. "It has better room for growth when compared to other FMCG companies," an analyst tracking the company said. The stock ended the day at Rs 628.35 up 1.35 per cent on the BSE today.

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