In this video, we have discussed two FMCG companies, Hindustan Unilever Ltd (HUL) and Britannia. We have done a fundamental analysis and compared these companies on certain financial parameters. Both these companies have a diversified portfolio and own brands we all have used at one point or another. We talk about the market cap, revenue, profit, and some financial ratios about these companies to give you an insight on them.

HUL and Britannia are two companies you have probably heard about before. They both operate in the FMCG sector and have a diverse portfolio.

HUL operates has a market cap of 5 lakh crores and is India's third largest company surpassing HDFC in the recent past. Britannia has a market cap of 65,000 crores.

The revenue of HUL is divided among, beauty and personal care, home care and food and refreshments, the highest chunk of which comes from beauty and personal care (46%). The highest profit of HUL also comes from the beauty and personal care segment (58%).

Let us discuss financial ratios of both these companies and compare them.
The first ratio is Price to Earning ratio (P/E). If the P/E ratio is high, an investor becomes more sceptical to invest in a company. HULs P/E ratio is 70+ and Britannia's P/E ratio is 47.

Operating profit margin is next. Higher the operating profit margin, the better. HUL has an operating profit margin of 27% and Britannia's is 17%. Next is P/B ratio. This tells us that if the company sells all its assets and pays off its liabilities, the value of per share remaining is the book value.

HULs P/B ratio is 66 and Britannia's is 18%. Return on equity tells us the return an asset gave on an equity investment. This is important to see the returns this asset gave in the past. HULs ROE in 2019 was 79% and Britannia's was 30%.

Inventory turn over ratio tells us how many times a company's inventory was empty in one year. HULs inventory turn over ratio was 15.46 and Britannia's was 15.46.

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