GILLETTE - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.8

📊 Fundamental Analysis

Strengths

Zero Debt: Financially sound with no leverage risk.

Exceptional ROCE (58.9%) & ROE (42.5%): Indicates elite capital efficiency and shareholder value creation.

Strong EPS (₹173): Reflects solid earnings power.

Dividend Yield (1.05%): Decent for a consumer-focused company.

Stable Institutional Interest: FII holding up (+0.49%), though DII slightly down.

Concerns

Very High PEG Ratio (5.97): Suggests significant overvaluation relative to growth — a red flag for long-term value investors.

High P/E (61.8) vs. Industry P/E (54.0): Premium valuation may not be justified by growth.

Quarterly PAT Decline: From ₹159 Cr to ₹146 Cr — a 25.6% drop, indicating margin or demand pressure.

Low Volume & RSI Neutral (51.2): No strong momentum; MACD positive but not decisive.

💡 Is It a Good Long-Term Investment?

Only for conservative, brand-focused investors who value stability over aggressive growth. Gillette has world-class profitability metrics and brand strength, but its valuation is extremely rich and growth is modest.

🎯 Ideal Entry Price Zone

Valuation-Based Entry: ₹9,200–₹9,800 This zone aligns with the 200 DMA (₹9,179) and offers a better margin of safety.

Aggressive Entry: ₹8,500–₹9,200 If the stock corrects due to valuation concerns or weak earnings, this range offers long-term value.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: 2–4 years for moderate compounding and dividend income.

Exit Strategy

Partial Exit near ₹11,500–₹11,800 if valuation remains high and growth stagnates.

Full Exit if ROE drops below 30% or PEG remains above 6.0 for multiple quarters.

Re-evaluate if RSI crosses 75 or MACD turns sharply negative — could signal exhaustion.

Would you like a breakdown of Gillette’s competitive moat or a comparison with other FMCG giants like HUL or Colgate?

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