Fundamental Analysis Using One Way Anova  A Study on Selected FMCG Companies in India
Assistant Professor
Department of Commerce
Rabindra Mahavidyalaya,
Champadanga, Hooghly,
UNIVERSITY OF BURDWAN, INDIA
ABSTRACT: In which company to invest or purchase shares is an important question for every investor. Fundamental analysis can help such investor to select company/s to invest. In this study our focus is on FMCG sector. For analysis seven leading FMCG companies have been selected. Such companies are Britannia, Dabur, Godrej, HUL, ITC, Marico and Nestle. Different profitability ratios like Net Profit Margin, Total Assets Turnover Ratio, Operating Profit Margin, Earnings per share, Dividend per share, Dividend Payout ratio, Return on Capital Employed, Return on Equity have been used in this study. Du Pont 5 points analysis is being used to calculate ROE for measuring joint effect of ratios. From the study we found that Nestle, ITC and HUL are profitable sectors where investor can invest. After considering the joint effect of ratios we found that Godrej is the risky profitable concern of the selected companies. Though there is significant difference in variables of the selected companies.
KEY WORDS: Fundamental analysis, Profitability ratios, Descriptive Statistics, One way ANOVA
JEL CODE: G32, G33, G35
Generally, through two types of approaches fundamental analysis is done. They are TopDown approach and Bottom Up approach. Sometimes TopDown approach is replaced by sequential top down approach. In these approaches first of all we have to analyse the securities markets and the economy as a whole. Next we have to analyse the industry the industry with in which the company belongs. Finally, we have to analyse the company itself.
Forecasting industry is depends upon the forecasting of economy. On the other hand, forecasting of company depends upon both the industry and economy. Therefore, we have to first analyse companies that predicts the prospects of industry and finally it strengthen the visions of the economy. Thus, fundamental analysis consists of economic analysis, industry analysis and company analysis.
Economic Analysis: Before investing in shares the investor must analyse the economy and its influences on stock prices. So it is important to measure the effect of their focus on the performance of the company where the investors wish to invest. Economic analysis is the study of economic trends. Growth rate in GDP or GNP, foreign trade, employment are the indicators of economic trends.
Industry Analysis: Industry analysis is very important for the investors because he/she must analyse the industry in which the company belongs. If the investor thinks that there is a chance of growth in the industry then he/she can invest in the company through stock market. In industry analysis the investor must analyse the economic, political and market factors that influence the industry to develop. Suppliers and buyers of the products, competitors’ situation, likelihood of new market entrants are the major factors of industry analysis. These factors are divided into four categories.
In our study we selected Fast Moving Consumer Goods (FMCG) industry for fundamental analysis. FMCG industry is the fourth largest sector of Indian economy. It contributes more to the GDP of India. Product like milk, meat, fruits, vegetable, diary, packaged foods, chocolate, candies, soft drinks, toiletries and cleaning products come under this industry. Different studies have already been made on FMCG industry in India. This study, however provides a new look on fundamental analysis in this sector.
Company Analysis: Britannia: Britannia industries Ltd. manufacturing food products in India. During 2004 to 2018 the market capitalisation of the company moved from Rs. 2400 crore to Rs. 76000 crore. In 201718 the net sales of the company was Rs. 9905.60 crore. The net profit of the company in the year 201718 was 1777.40 crore.
Dabur: Dabur India Limited is well known FMCG company in India. In 2014, first time Dabur launches India’s first Ayurvedic Medical journal. In 2015 there was an agreement between Dabur and Starcom Media Vest Group (SMG). On 26^{th} September 2017 Dabur announced its alliance with Amazon to make its product global. From 2018, Dabur manufacturing products like cosmetic, Body and health products.
Godrej: Godrej consumer product is a famous FMCG company in India. It serves consumers of India over 122 years. This group enjoy the patronage of 1.15 billion consumers globally. Now Godrej expands their products to the emerging markets of Asia, Africa and Latin America.
HUL: Hindustan Unilever Limited is the largest FMCG company in India over 80 years. Around 18000 people are working in the company. HUL is the subsidiary of Unilever, the largest supplier of food. Now HUL is selling their products in 190 countries. It has around 67% shareholding in HUL.
ITC: ITC Ltd. is another popular FMCG company in India. ITC Ltd. produces food, personal care products, education and stationery products, agarbaties, cigarettes etc. It is one of the leading marketers in FMCG. It market capitalisation is nearly US$50 billion. Gross sales value US $ 10.8 billion. 6 billion people’s livelihoods are maintained by ITC.
Marico: Marico Ltd. is another India’s leading consumer goods companies providing consumer products and services in the areas of health, beauty and wellness. It has emerging markets around 25 countries in Asia and Africa. In 2017, it own Flame award. In 2016, it own International business PR awards. Marico’s market capitalisation is 25000 crore.
Nestle: Nestle India is consumer goods company. 8^{th} March, 2018 its famous product Maggi completed 35 years of business in India. It produces mill & nutrition, beverage, chocolate and confectionery items. Marico is selling products in many countries in Asia and Africa.
In 2017 S.M.I. Haque and A. Afzal conducted a study on two FMCG companies. The study period of the study was 201112 to 201516. The objective of the study was to evaluate the financial performance of the selected companies. The results of the study were i) sound return for shareholders, ii) satisfactory liquidity position, iii) firms were not in trading on equity and iv) liquidity and profitability are positively associated with sales.
Khamrui (2012) made a study of two popular FMCG companies – ITC and HUL. In this study he computed different profitability ratios and made a comparison between them considering ROI as the dependent variable. The study revealed that both profitability and liquidity have significant impact on profitability.
Joshi (2013) conducted the study on three major FMCG companies – HUL, Colgate Palmolive & ITC Agro Tech Foods. In this study he focused on various profitability ratios like Net operating profit, net profit margin, PAT to net worth, cash profit to net profit etc. He used mean and ANOVA test. He concluded that there have been vast differences among the selected ratios.
4.1 Research Statement: Fundamental analysis using one way ANOVA – A study on selected FMCG companies in India.
Hypothesis of the study:
H_{0}Null Hypothesis There is no significant difference between the variables (ratios) of the selected FMCG companies. Symbolically we can write µ_{1 = }µ_{2 = }µ_{3 = }µ_{4 =}µ_{5 = }µ_{6 = }µ_{7 = }µ_{8}
H_{1}Alternative Hypothesis There is significant difference between the variables (ratios) of the selected FMCG companies. Symbolically we can write µ_{1 ≠ }µ_{2 ≠ }µ_{3 ≠ }µ_{4 ≠}µ_{5 ≠ }µ_{6 ≠ }µ_{7 ≠ }µ_{8}
4.2 About the research problem: The present study focuses on the profitability analysis of selected Indian companies in FMCG sector for a period of 15 years from 2004 to 2018. One of the important factors affecting the functioning of the company is the size of the unit. I have tried to use Du Pont model to analyse profitability of the selected FMCG companies. In this study my focus is on difference in profitability variables of the selected companies. For this reason One way ANOVA test has been done.
4.3 Research Design: The present study titled “Fundamental analysis using one way ANOVA – A study on selected FMCG companies in India” is an analytical, conclusion oriented and hypothesis testing type of research study. In this study we used different ratios like total assets turnover ratio (i.e. net sales / total assets). The efficiency of the business can be measured with the help of this ratio. To measure the solvency position of the business i.e. the capability of the company to meet its long term debts, we used interest coverage ratio (EBIT / Interest Expense) and equity multiplier (total assets / total debt). Finally, to measure the profitability of the company i.e. the company’s ability to generate revenue / earnings as compared to the expenses of the company, we used net profit margin (net profit / net sales), Return on equity (net income / average shareholders fund) and operating profit margin (EBIT / net sales). Other profitability ratios like earnings per share, dividend per share, dividend payout ratio and return on capital employed of the selected companies has been considered for fundamental analysis.
Du Pont analysis:In our study we used Du Pont 5 points model to calculate ROE of the selected companies. ROE has been computed by multiplying 5 ratios with each other to get a composite ratio. Such ratios are Total assets turnover ratio, Equity multiplier, Operating profit margin, Tax retention rate and Interest expense rate. The joint effect of five ratios can nullify the effect of one or two ratios and help investors to take appropriate decision.
4.4 Objectives of the Study: The Objectives of the present study are as follows;
4.5 Nature and source of data: The present study is based on the secondary data and such data have been collected from Capitaline data base from the University of Burdwan. Other information have been collected from annul reports of the company and also from internet as per requirement.
4.6 Period of the study: The present study covers a period of 15 years from 200304 to 201718.
4.7 Sample Design: In the present study I used purposive sample technique to select the leading FMCG companies from the FMCG industry.
4.8 Population: The population consisted popular FMCG companies in India.
4.9 Sampling units and sample size: For the present study 7 FMCG companies have been selected as the sampling units. These companies are listed in the BSE and NSE or both in India. Out of many companies only the top seven companies have been selected in this study. Then all units of population are classified on the basis of size of the company.
4.10 Tools and Techniques: In the present study we used Ratio analysis and different techniques of average (mean), standard deviation. For testing the difference between variables Descriptive statistics and one way ANOVA test have been used. For homogeneity and robustness of the variables we used Levene Statistics, Welch and Brown Forsythe test respectively. In this analysis mean chart has been used.
Net Profit Margin (NPM): It is the ratio of Net Profit after tax and Net sales. It portrays that how much the company earned from its net sales. Higher net profit margin indicates the efficiency of management in transforming sales into profit. In Table 1 Net profit margin of 7 FMCG companies has been computed. From the table it is clear that ITC (23.67 cr.) registered the highest mean net profit margin (NPM) among the selected companies under study. It depicts the good sign from the management of the company and helps the company to maximise its shareholders’ profit. The variation of NPM is also minimum in case of Nestle than other companies. The alarming fact is that Britannia (5.87 cr.) registered the lowest mean net profit margin among the selected companies.
TABLE – 1 Descriptive Statistics 

NPM 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
5.8750 
1.75927 
.45424 
4.9007 
6.8492 
3.07 
9.38 
DABUR 
15 
12.7768 
3.05594 
.78904 
11.0845 
14.4691 
5.63 
16.02 
GODREJ 
15 
14.8506 
2.55537 
.65979 
13.4354 
16.2657 
9.03 
19.46 
HUL 
15 
13.0675 
2.07361 
.53540 
11.9191 
14.2158 
10.64 
17.68 
ITC 
15 
23.6741 
1.47913 
.38191 
22.8550 
24.4932 
20.82 
25.88 
MARICO 
15 
10.2051 
2.60594 
.67285 
8.7620 
11.6482 
6.90 
15.46 
NESTLE 
15 
11.9534 
.97148 
.25083 
11.4154 
12.4914 
9.60 
13.18 
Total 
105 
13.2003 
5.47434 
.53424 
12.1409 
14.2598 
3.07 
25.88 
For testing whether there is any difference between the selected variables of the selected companies, we conducted one way ANOVA test. From the ANOVA table it is clear that in case of NPM the F value is 93.236 with its Pvalue is 0.00 which is less than 0.05. Therefore, we can say that the difference in the mean values of NPM of the selected FMCG companies is statistically significant.
ANOVA 

NPM 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
2652.108 
6 
442.018 
93.236 
.000 
Within Groups 
464.605 
98 
4.741 


Total 
3116.713 
104 



However it is not clear that which of the various pairs of means of NPM of the selected companies, the difference is significant. For this reason we made Post Hoc Tukey HSD test. If we look at the multiple comparisons table, we can see that significance values have been generated for the mean differences of NPM between pairs of values of the selected companies. The Tukey HSD (Honest Significant Difference) portrays that except Dabur & Godrej group (P=0.135), Dabur & HUL group (P=1.00), Dabur & Nestle group (P=0.944), Godrej & HUL group (P=0.283), HUL & Nestle group (P=0.800) and Marico & Nestle group (P=0.306), all other groups are statistically significant. The P value in those cases is more than 0.05.
Total Assets Turnover Ratio (TATR): Total assets turnover ratio is the ratio between Total assets and Net sales of the company. It indicates the efficiency of the company to convert their assets into sales. Higher total assets turnover ratio signifies that the company is more efficient in converting their assets into sales. Contrary, lower assets turnover ratio indicates the inefficiency of the company in managing their assets properly. In Table 2 Total assets turnover ratio of 7 selected FMCG companies has been computed. From the table it is clear that Nestle (5.986 cr.) depicted the highest mean assets turnover ratio among the selected companies. On the other hand, ITC registered the lowest mean assets turnover ratio. In case of Godrej (4.129 cr.) more variation in assets turnover ratio is observed and in case of ITC (0.148) the variation is lowest.
TABLE – 2 Descriptive Statistics of TATR 

TATR 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
4.4627 
1.37056 
.35388 
3.7037 
5.2217 
2.56 
7.32 
DABUR 
15 
2.9200 
.75220 
.19422 
2.5034 
3.3366 
2.00 
4.53 
GODREJ 
15 
4.7760 
4.12935 
1.06619 
2.4892 
7.0628 
1.29 
13.74 
HUL 
15 
5.6627 
1.81764 
.46931 
4.6561 
6.6692 
2.93 
8.62 
ITC 
15 
1.9200 
.14900 
.03847 
1.8375 
2.0025 
1.62 
2.17 
MARICO 
15 
2.7273 
.95722 
.24715 
2.1972 
3.2574 
1.41 
4.38 
NESTLE 
15 
5.9860 
2.89517 
.74753 
4.3827 
7.5893 
1.95 
10.00 
Total 
105 
4.0650 
2.53589 
.24748 
3.5742 
4.5557 
1.29 
13.74 
From ANOVA table we can say that in case of FATR, F value is 7.95 with its P value is 0.00. The P value is less than 0.05. Hence the difference in the mean values of FATR of the selected FMCG companies is statistically significant.
ANOVA 

TATR 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
219.118 
6 
36.520 
7.959 
.000 
Within Groups 
449.680 
98 
4.589 


Total 
668.798 
104 



From Post Hoc Tukey HSD test of multiple comparisons of FATR depicts that except Britannia and Dabur group (P=0.439), Britannia and Godrej group (P=1.00), Britannia and HUL group (P=0.724), Britannia & Marico group (P=0.295), Britannia & Nestle group (P=0.455), Dabur and Godrej group (P=0.221), Dabur and ITC group (P=0.860), Dabur and Marico group (P=1.00), Godrej and HUL group (P0.916), Godrej and Marico group (P=0.132), Godrej & Nestle group (P= 0.716), HUL and Nestle group (P=1.00), ITC & Marico group (P=0.945), all other groups are statistically significant. The p value of such groups is less than 0.05.
Operating Profit Margin (OPM):Operating Profit Margin is the ratio between earnings before interest & tax and net sales. In Table 3 such ratio of the selected companies has been computed. Operating profit margin is a better meaningful parameter to judge the company’s earning ability to pay off its actual expenses because in it interest and tax deductions are included. From table it is clear that the mean operating profit margin of ITC (39.08 cr.) is highest and of Britannia (11.407 cr.) it is lowest. The variation of operating profit margin of Godrej, HUL and Nestle is similar. Due to higher interest charges the operating profit margin of Britannia is lowest. Hence importance should be given towards the improvement of their revenue as compare to their expenditure, otherwise the company making loss in future.
TABLE – 3 Descriptive Statistics of OPM 

OPM 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
11.4080 
4.59235 
1.18574 
8.8648 
13.9511 
4.89 
21.28 
DABUR 
15 
17.6886 
3.41510 
.88178 
15.7974 
19.5798 
11.17 
22.53 
GODREJ 
15 
20.7850 
2.85008 
.73589 
19.2067 
22.3634 
16.69 
26.91 
HUL 
15 
18.8785 
2.45613 
.63417 
17.5184 
20.2387 
15.94 
23.46 
ITC 
15 
39.0834 
2.90517 
.75011 
37.4745 
40.6922 
34.73 
44.65 
MARICO 
15 
14.8999 
3.91508 
1.01087 
12.7319 
17.0680 
9.06 
21.56 
NESTLE 
15 
19.9340 
2.06313 
.53270 
18.7915 
21.0765 
14.24 
22.46 
Total 
105 
20.3825 
8.82639 
.86137 
18.6744 
22.0906 
4.89 
44.65 
From ANOVA table it is clear that the F value of OPM is 109.813 whereas P value is 0.00 (less than 0.05). It signifies that the difference in mean value of OPM of the selected companies is statistically significant.
ANOVA 

OPM 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
7053.080 
6 
1175.513 
109.813 
.000 
Within Groups 
1049.055 
98 
10.705 


Total 
8102.135 
104 



From Post Hoc Tukey HSD test of multiple comparisons of OPM depicts that except Britannia & Marico group (P=0.063), Dabur & Godrej group (P=0.140), Dabur & HUL group (P=0.954), Dabur & Marico (P=0.239), Dabur & Nestle (P= 0.499), Godrej & HUL (P=0.685), Godrej & Nestle group (P=0.992), HUL & Nestle group (P=0.974), all other groups are statistically significant. The P value of such groups is less than 0.05.
Earnings Per Shares (EPS): Earnings per share is the ratio between Net Income and No. of equity shares. Through EPS we judge the profitability of the company. The company having higher EPS signifies that the earning capability of the company is good. On the other hand lower EPS portrays the less earning capability of the company. In Table 4 EPS of the selected companies has been computed. Table 4 shows that the mean EPS of Nestle (55.164 cr.) is highest and the same in case of Marico (1.978 cr.) is lowest. The variation in mean in case of Nestle is maximum and the same in case of Dabur is minimum of the selected companies in the study. Therefore, importance should be given towards the improvement of EPS of Marico, Dabur, ITC and HUL. Instead of using equity capital debt capital can be used to increase EPS.
TABLE – 4 Descriptive Statistics of EPS 

EPS 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
18.7607 
15.12974 
3.90648 
10.3821 
27.1392 
7.41 
58.35 
DABUR 
15 
2.0780 
1.37266 
.35442 
1.3178 
2.8382 
.37 
4.88 
GODREJ 
15 
9.1140 
6.50859 
1.68051 
5.5097 
12.7183 
1.70 
20.55 
HUL 
15 
9.8540 
4.01899 
1.03770 
7.6284 
12.0796 
4.78 
17.01 
ITC 
15 
3.5253 
2.18213 
.56342 
2.3169 
4.7338 
1.08 
7.14 
MARICO 
15 
1.9780 
1.57753 
.40732 
1.1044 
2.8516 
.41 
4.93 
NESTLE 
15 
55.1640 
34.30745 
8.85814 
36.1652 
74.1628 
16.53 
111.55 
Total 
105 
14.3534 
22.56091 
2.20172 
9.9873 
18.7195 
.37 
111.55 
From ANOVA table it is clear that the F value of EPS is 25.577 whereas the P value is 0.00 (less than 0.05). Thus it signifies that the difference in mean value of EPS of the selected companies is statistically significant.
ANOVA 

EPS 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
32305.620 
6 
5384.270 
25.577 
.000 
Within Groups 
20629.820 
98 
210.508 


Total 
52935.439 
104 



The Post Hoc Tukey HSD test of multiple comparisons of EPS suggests that in most of the groups are statistically insignificant. The groups like Britannia & Dabur, Britannia & Marico, Britannia & Nestle, Dabur & Nestle, Godrej & Nestle, HUL & Nestle and Marico & Nestle are statistically significant because their P value is less than 0.05.
Dividend Per Share (DPS):In Table 5, Dividend per share of the selected companies has been shown. Dividend per share is the ratio between total dividend paid to equity shareholders / total no of equity shares. It also measures the profitability of the company. Higher the ratio better is the position of the company. Higher DPS increases the goodwill of the company. Shareholders evaluate this ratio at the time of investment in the company. From Table 5 it is clear that Nestle (37.1 cr.) registered the highest mean DPS and Marico (1.014) showed the lowest mean DPS among the selected companies. The variation in DPS is maximum in case of Nestle and the same is minimum in case of Dabur. Hence the management of Marico, Dabur, Godrej etc. must take some preventive steps to improve DPS.
TABLE – 5 Descriptive Statistics of DPS 

DPS 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
15.1333 
8.55125 
2.20792 
10.3978 
19.8689 
6.50 
40.00 
DABUR 
15 
1.7233 
.52944 
.13670 
1.4301 
2.0165 
.50 
2.50 
GODREJ 
15 
2.8667 
2.47102 
.63802 
1.4983 
4.2351 
.00 
5.75 
HUL 
15 
8.7667 
4.54292 
1.17298 
6.2509 
11.2825 
5.00 
18.50 
ITC 
15 
9.1600 
7.87022 
2.03208 
4.8016 
13.5184 
2.65 
31.00 
MARICO 
15 
1.0147 
1.32955 
.34329 
.2784 
1.7509 
.00 
4.25 
NESTLE 
15 
37.1000 
14.94538 
3.85888 
28.8235 
45.3765 
14.00 
63.00 
Total 
105 
10.8235 
13.79679 
1.34643 
8.1535 
13.4935 
.00 
63.00 
From ANOVA table it is clear that the F value of DPS is 43.312 and its P value is 0.00 (less than 0.05). Thus the difference in mean value of DPS of the selected companies is statistically significant.
ANOVA 

DPS 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
14375.465 
6 
2395.911 
43.312 
.000 
Within Groups 
5421.088 
98 
55.317 


Total 
19796.554 
104 



From Post Hoc Tukey HSD test of multiple comparisons of DPS depicts that except Britannia & HUL group (P=0.234), Britannia & ITC group (P=0.305), Dabur & Godrej group (P=1.00), Dabur & HUL group (P=0.139), Dabur & ITC group (P= 0.10), Dabur & Marico group (P=1.00), Godrej & HUL group (P= 0.320), Godrej & ITC group (P=0.246), Godrej & Marico group (P= 0.993), HUL & ITC group (P= 1.00), HUL & Marico group (P= 0.075), ITC & Marico group (P= 0.052), all other groups are statistically significant. The P value of such group is less than 0.05.
Dividend Payout Ratio (DPR): Dividend payout ratio is the ratio of dividend per share and earnings per share. It measures the percentage of net income distributed to the shareholders in the form of dividends. Higher the ratio better is the return to the shareholders of the company and viceversa. In Table 6 DPR of the selected companies has been computed. From the table it is clear that HUL (88.72 cr.) showed the highest mean DPR and Marico (32.63 cr.) registered the lowest mean DPR. The variation in DPR in case of Dabur is minimum whereas the same in case of HUL is maximum among the selected companies in study. Marico and Britannia must take initiative to improve their DPR in the future.
TABLE  6 Descriptive Statistics of DPR 

DPR 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
37.0107 
15.75820 
4.06875 
28.2841 
45.7373 
9.91 
59.63 
DABUR 
15 
47.7440 
8.62650 
2.22735 
42.9668 
52.5212 
22.45 
60.99 
GODREJ 
15 
58.6307 
23.88412 
6.16685 
45.4041 
71.8573 
27.05 
89.00 
HUL 
15 
88.7187 
21.16882 
5.46577 
76.9958 
100.4416 
66.75 
127.35 
ITC 
15 
54.9333 
22.50228 
5.81006 
42.4720 
67.3947 
28.00 
111.00 
MARICO 
15 
32.6300 
16.05744 
4.14601 
23.7377 
41.5223 
7.61 
68.42 
NESTLE 
15 
77.0527 
19.25500 
4.97162 
66.3896 
87.7157 
45.06 
107.07 
Total 
105 
56.6743 
26.32459 
2.56902 
51.5798 
61.7687 
7.61 
127.35 
ANOVA table shows that the F value of DPR is 17.622 whereas P value is 0.00 (less than 0.05). Thus the difference in mean value of DPR of the selected companies is statistically significant.
ANOVA 

DPR 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
37402.720 
6 
6233.787 
17.622 
.000 
Within Groups 
34667.595 
98 
353.751 


Total 
72070.315 
104 



The post Hoc Tukey HSD test of multiple comparisons of DPR shows that except Britannia & Dabur group (P=0.706), Britannia & ITC group (P=0.134), Britannia & Marico group (P=0.995), Dabur & Godrej group (P=0.692), Dabur & ITC group (P= 0.942), Dabur & Marico group (P=0.305), Godrej & ITC group (P=0.998), Godrej & Nestle group (P=0.114), HUL & Nestle group (P= 0.619), all other groups are statistically significant. The P value of such groups is less than 0.05.
Return on Capital Employed (ROCE): In Table 7 ROCE of the selected companies has been computed. ROCE is calculated by EBIT by Capital employed and multiply 100. This ratio indicates how efficiently the company manage the long term funds. Higher the ratio better is the management of the company to use long term funds and viceversa. It is another indicator of profitability of the concern. From the table it is clear that the mean ROCE of Nestle (102.03 cr.) is highest and the same in case of Marico (33.195 cr.) of the selected companies is lowest. The variation in ROCE is minimum in case of ITC whereas the same in case of Godrej is maximum. For improvement of ROCE importance should be given to Marico, Britannia and Dabur.
TABLE  7 Descriptive Statistics of ROCE 

ROCE 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
37.2973 
17.44338 
4.50386 
27.6375 
46.9572 
19.81 
75.91 
DABUR 
15 
47.2013 
17.31204 
4.46995 
37.6142 
56.7884 
17.60 
80.43 
GODREJ 
15 
78.9620 
61.24469 
15.81331 
45.0458 
112.8782 
22.23 
198.12 
HUL 
15 
88.5087 
26.26986 
6.78285 
73.9609 
103.0564 
43.62 
121.52 
ITC 
15 
43.9780 
5.52276 
1.42597 
40.9196 
47.0364 
37.38 
52.14 
MARICO 
15 
33.1953 
4.84826 
1.25182 
30.5105 
35.8802 
26.52 
41.22 
NESTLE 
15 
102.0340 
50.93828 
13.15221 
73.8253 
130.2427 
30.52 
174.16 
Total 
105 
61.5967 
41.17830 
4.01859 
53.6277 
69.5657 
17.60 
198.12 
The ANOVA table depicts that the F value of ROCE is 10.408 and P value is 0.00 (less than 0.05). Hence there is difference in mean value of ROCE of the selected companies and such differences are statistically significant.
ANOVA 

ROCE 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
68635.873 
6 
11439.312 
10.408 
.000 
Within Groups 
107711.941 
98 
1099.101 


Total 
176347.814 
104 



From the Post Hoc Tukey HSD test of multiple comparisons of ROCE depicts that except Britannia & Dabur group (P=0.983), Britannia & ITC group (P=0.998), Britannia & Marico group (P=0.983)(P=1.00), Dabur & Marico group (P=0.908), Godrej & HUL group (P=0.986), Godrej & ITC group (P=0.069), Godrej & Nestle group (P=0.481), HUL & Nestle group (P=0.921), ITC & Marico group (P=0.973), all other groups are statistically significant. The P value of such groups is less than 0.05.
Return on Equity (ROE):Return on equity is nothing but the earnings, the shareholders are getting from company by investing their money. Previously, we emphasised on ROA. ROA can be calculated in the following way. ROA= Net Income/Sales*Sales/ Total Assets= Net Income/Total Assets.
In this case both profitability and efficiency of the organisation are impacted. In Du Pont model the first shifts from ROA to ROE was made. ROE is one of the powerful indicators of profitability. In this study we used Du Pont 5 points model. For computing ROE we straight forward multiply equity multiplier (i.e. Total assets/Total equity or Financial leverage), Total assets turnover ratio, Operating profit margin, Tax retention rate (i.e. Subtracting tax rate from 1) and Interest expense rate (i.e. EBIT*TART/ Interest coverage ratio). From table it is clear that Godrej (728.89 cr.) scored the highest mean ROE and ITC (54.73 cr.) registered lowest ROE. The variation in ROE in case of Dabur is minimum whereas the same in case of Godrej is highest. The result of ROE is different from other profitability ratios discussed earlier may be due to incorporation of various aforesaid factors.
TABLE  8 Descriptive Statistics of ROE 

ROE 

Companies 
N 
Mean 
Std. Deviation 
Std. Error 
95% Confidence Interval for Mean 
Minimum 
Maximum 

Lower Bound 
Upper Bound 

BRITANNIA 
15 
127.9159 
163.53704 
42.22508 
37.3521 
218.4797 
5.22 
632.90 
DABUR 
15 
93.8247 
57.81191 
14.92697 
61.8095 
125.8398 
15.08 
203.50 
GODREJ 
15 
728.8961 
1099.04557 
283.77235 
120.2650 
1337.5273 
14.84 
4151.74 
HUL 
15 
88.1429 
90.15103 
23.27690 
38.2189 
138.0668 
.52 
302.04 
ITC 
15 
54.7332 
59.82942 
15.44789 
21.6008 
87.8657 
8.09 
249.11 
MARICO 
15 
139.0517 
140.94367 
36.39150 
60.9997 
217.1037 
17.99 
471.20 
NESTLE 
15 
60.4079 
70.90162 
18.30672 
21.1439 
99.6719 
1.94 
278.37 
Total 
105 
184.7103 
471.44317 
46.00814 
93.4745 
275.9462 
.52 
4151.74 
From ANOVA table it is clear that the F value of ROE is 4.824 and P value is 0.00 (less than 0.05). It signifies that the difference in mean value of ROE of the selected companies is statistically significant.
ANOVA 

ROE 


Sum of Squares 
df 
Mean Square 
F 
Sig. 
Between Groups 
5270687.090 
6 
878447.848 
4.824 
.000 
Within Groups 
17844213.486 
98 
182083.811 


Total 
23114900.576 
104 



From the Post Hoc Tukey HSD test of multiple comparisons of ROE we can conclude that the most of the groups except Britannia & Godrej group (P=0.004), Dabur & Godrej group (P=0.002), Godrej & HUL group (P=0.002), Godrej & ITC group (P=0.001), Godrej & Marico group (P=0.005), Godrej & Nestle group (P=0.001) are statistically insignificant. The P value of such groups is more than 0.05.
The homogeneity of variances of the designated variables of the selected companies, the Levene Statistic is less than 0.05. Therefore, the requirement of homogeneity of variances has been met. The Welch test of equality of means (robustness) of the used variables (except in case ROE of the selected companies due to conglomeration of different factors in calculation of ROE using Du Pont model) is statistically significant (P value less than 0.05) and also Brown Forsythe test of equality of means (P value is less than 0.05) of the selected variables of the companies is statistically significant (‘F’ is asymptotically distributed).
6.Conclusion:From the above discussion and ANOVA tables it is found that the null hypothesis i.e. H_{0} is rejected and H_{1} i.e. alternative hypothesis is accepted^{. }µ_{1≠}µ_{2≠}µ_{3≠}µ_{4≠}µ_{5≠}µ_{6≠}µ_{7≠}µ_{8}. There are differences in mean values of the selected variables of the companies under study.
But in many cases the in between differences of different ratios are statistically insignificant. As in most of the cases the differences persist so we can conclude that there is significant difference between the selected ratios of the companies under study.
From the above discussion we can see that in case of Net profit margin ITC scored highest and Britannia is the lowest among the selected companies in the study. The mean total assets turnover ratio of Nestle is highest and the same in case of ITC is lowest. ITC has highest mean operating profit margin and Britannia has lowest mean operating margin. Nestle has highest mean earning per share and DPS whereas Marico has also lowest mean EPS, DPS, DPR and ROCE. HUL registered highest mean DPR. The ROCE of Nestle is highest among the seven 7 FMCG companies in the study. In case of ROE using Du Pont 5 points model Godrej registered the highest and ITC registered the lowest mean ROE. From ROE point of view Godrej is the risky company among the selected companies. Investors are getting much interested to invest in Godrej at a low interest rate. Godrej confirmed the profitability of the investors. Though, investors can choose Nestle, ITC and HUL to invest their funds in future.
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