GILLETTE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.0

📊 Financials Overview:

• Revenue & Profit Growth: PAT slightly declined from 146 Cr. to 144 Cr. (↓ 1.4%), though YoY profit variation shows 8% growth.
• Margins: ROCE at 56.1% and ROE at 41.6% reflect exceptional profitability and capital efficiency.
• Debt Ratios: Debt-to-equity at 0.00 indicates debt-free operations, enhancing financial stability.
• Cash Flows: Dividend yield at 1.40% provides moderate shareholder returns.

💹 Valuation Indicators:

• P/E Ratio: 45.3 vs Industry PE of 49.7 → fairly valued relative to peers.
• P/B Ratio: Current Price / Book Value ≈ 22.3, expensive compared to fundamentals.
• PEG Ratio: 4.29 → valuation stretched relative to growth.
• Intrinsic Value: Fair value estimated near 7,200–7,400 ₹; current price (7,980 ₹) trades at a premium.

🏭 Business Model & Competitive Advantage:

• Gillette operates in personal care and grooming, with strong brand recognition and global market leadership.
• High ROE and ROCE highlight operational excellence and superior efficiency.
• Debt-free operations and consistent profitability strengthen overall financial health.

📈 Entry Zone & Long-Term Guidance:

• Entry Zone: Attractive accumulation range between 7,200–7,400 ₹.
• Long-Term Holding: Strong fundamentals and brand leadership make it suitable for long-term investors; valuations stretched at current levels.

Positive

• Exceptional ROCE (56.1%) and ROE (41.6%) indicate superior capital efficiency.
• Debt-free balance sheet enhances financial stability.
• Dividend yield of 1.40% adds income appeal.
• FII holdings increased by 0.19%, reflecting foreign investor confidence.

Limitation

• P/B ratio of 22.3 suggests extreme overvaluation relative to book value.
• PEG ratio of 4.29 highlights stretched valuation compared to growth.
• DII holdings declined by -0.45%, showing reduced domestic institutional confidence.
• RSI at 35.9 indicates weak technical sentiment, close to oversold zone.

Company Negative News

• No major negative news reported; valuation premium and slight profit decline remain key concerns.

Company Positive News

• Strong brand presence and global leadership in grooming products.
• FII holdings increased, showing foreign investor confidence.

Industry

• Industry PE at 49.7, slightly higher than Gillette’s 45.3, indicating fair valuation.
• Personal care sector growth driven by rising consumer demand and premiumization trends.

Conclusion

⚖️ Gillette demonstrates strong fundamentals with exceptional profitability, debt-free operations, and brand leadership. However, valuations are stretched, particularly on book value and PEG ratio. Long-term investors may consider accumulation near 7,200–7,400 ₹ for margin of safety, while current levels pose valuation risks despite sector strength.