>FMCG (IDFC SSKI)

‘Small’ – The next BIG play!

Outperformance for the right reasons

■ Growth traction untouched by macro economic slowdown
■ Average revenue growth of 18%yoy in FY09
■ No leverage risk - near debt free / cash surplus companies
■ Healthy cash flow generation – cash profit at 4-5x the capex
■ Strong payouts – 50-70% of profits

Outlook remains ‘attractive’

What does our consumer channel checks suggest?

■ No signs of slowdown – metros witness 6-7%yoy volume growth, tier II 10-12% and rural growth strong at 15%+

■ Rural India, the driving force – 35%+ increase in agri commodity realizations, service sector employment and non-farm incomes

■ No material signs of consumer downtrading – barring in soaps, detergents and edible oil categories

■ Price cuts selective and no risk of price wars

To see full report: FMCG