P&G Hygiene and Healthcare surged on Friday on renewed buying support after a recent fall.
By 12:40 IST, the stock leaped 11.16% to Rs 363 on the BSE, recording a volume of 1,735 shares.
The renewed buying support for the stock is mainly due to its attractive valuation after a battering in the last few sessions. On Thursday, the stock shed 14.2% to Rs 326.55. In three sessions, between 7 and 10 April 2003, the stock of the fast moving consumer goods company lost 17% to Rs 326.55 from Rs 392.
Last month, there were reports that the parent company plans to hike its equity stake in the Indian arm from 65% to 70%. Cincinnati-based Procter & Gamble has approached the Foreign Investment Promotion Board to seek its permission for restructuring the capital of P&G Hygiene and Healthcare. The move is part of a strategy to hike its stake in PGHH. Once the parent firm gets the FIPB nod, the stake hike may take place through the creeping acquisition route (similar to the modus operandi of multinational Nestle which has been continuously raising its stake in Nestle India). However, the US company has stated that it is not planning to de-list the shares of its Indian arm from the bourses.
PGHH's products are mainly targeted at urban consumers. The company has not entered the rural market in a big way.
PGHH mainly concentrates on four categories-feminine care, healthcare, haircare and home care. 70% of its revenues are drawn from healthcare and feminine hygiene care business.
PGHH owns the rights to such brands as Vicks and Whisper. The company also manufactures detergents. It has also entered the premium fragrances market in India through Hugo Boss, Giorgio and Lacoste brands.
However, the performance of the company has been dismal due to the slowdown in the FMCG sector. For the second quarter ended 31 December 2002, PGHH recorded a 4.6% rise in net profit to Rs 32.04 crore on a 1.02% increase in sales to Rs 136.10 crore (Rs 1.36 billion).
As on 31 December 2002, public and institutions held 19.30% and 7.91% equity stake in PGHH respectively.
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