GILLETTE - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.2
| Stock Code | GILLETTE | Market Cap | 28,428 Cr. | Current Price | 8,732 ₹ | High / Low | 11,505 ₹ |
| Stock P/E | 45.8 | Book Value | 357 ₹ | Dividend Yield | 1.37 % | ROCE | 56.1 % |
| ROE | 41.6 % | Face Value | 10.0 ₹ | DMA 50 | 8,365 ₹ | DMA 200 | 8,900 ₹ |
| Chg in FII Hold | -0.24 % | Chg in DII Hold | -0.26 % | PAT Qtr | 172 Cr. | PAT Prev Qtr | 144 Cr. |
| RSI | 61.0 | MACD | 137 | Volume | 28,880 | Avg Vol 1Wk | 1,02,038 |
| Low price | 7,412 ₹ | High price | 11,505 ₹ | PEG Ratio | 4.34 | Debt to equity | 0.00 |
| 52w Index | 32.2 % | Qtr Profit Var | 36.9 % | EPS | 190 ₹ | Industry PE | 46.7 |
📊 Analysis: Gillette India shows exceptional efficiency with ROCE at 56.1% and ROE at 41.6%, reflecting strong capital utilization. The company is debt-free, ensuring financial stability. EPS of 190 ₹ supports earnings strength, and quarterly PAT growth (36.9%) highlights operational momentum. However, the PEG ratio of 4.34 indicates overvaluation relative to growth, and the P/E of 45.8 is at par with industry PE (46.7), suggesting limited upside at current levels.
💰 Entry Price Zone: Ideal accumulation range is 8,300 ₹ – 8,600 ₹, aligning with DMA 50 (8,365 ₹) and close to DMA 200 (8,900 ₹). Current price (8,732 ₹) is within this zone, making staggered buying suitable for long-term investors.
📈 Exit / Holding Strategy: For existing holders, maintain positions for 3–5 years given strong efficiency ratios and brand strength. Partial profit booking can be considered near 11,000 ₹ – 11,500 ₹ (recent highs). Dividend yield of 1.37% provides modest income, but the primary focus remains on capital appreciation driven by brand dominance and consumer demand.
✅ Positive
- High ROCE (56.1%) and ROE (41.6%) showing superior efficiency
- Debt-free balance sheet
- Strong quarterly PAT growth (172 Cr. vs 144 Cr.)
- EPS of 190 ₹ supports valuation strength
⚠️ Limitation
- PEG ratio of 4.34 indicates overvaluation
- P/E of 45.8 is premium, limiting upside
- Institutional holdings reduced (FII -0.24%, DII -0.26%)
- Low trading volume compared to weekly average
📉 Company Negative News
- Decline in institutional investor confidence (FII/DII reduction)
- Stock consolidating below 52-week high (11,505 ₹)
📈 Company Positive News
- Quarterly profit growth of 36.9% YoY
- Strong brand positioning in FMCG sector
- Stable moving averages supporting price trend
🏭 Industry
- FMCG sector enjoys steady demand and resilience
- Industry PE at 46.7 reflects investor optimism
- Consumer staples remain defensive plays in volatile markets
🔎 Conclusion
Gillette India is a fundamentally strong FMCG stock with superior efficiency ratios, debt-free status, and consistent profit growth. While valuations are premium, long-term prospects remain attractive due to brand strength and consumer demand. Ideal strategy: accumulate near 8,300–8,600 ₹, hold for 3–5 years, and book partial profits near highs (11,000–11,500 ₹). Best suited for investors seeking stable compounding in consumer staples with modest dividend support.