Shares of Procter & Gamble Hygiene & Healthcare (PGHH) spurted as much as 10.93 per cent on Thursday after the company reported an 84.37% increase in its standalone net profit to Rs 250.62 crore for the second quarter ended 31 December 2020.

The company, which follows July-June financial year, had posted a net profit of Rs 135.93 crore in the same quarter of the previous fiscal. Net sales rose 18.5 per cent to Rs 1,018.44 crore in December 2020 versus Rs 859.27 crore in December 2019 as it received a major boost owing to its superior strategy, robust product portfolio, strong retail execution, and market recovery the company witnessed during the quarter.

Profit after tax registered robust growth annually on account of strong sales growth, productivity savings and a one-time help in the quarter. Standalone profit before tax (PBT) soared 85.6 per cent to Rs 337.71 crore in December 2020 as against Rs 182 crore in December 2019.

Analysts at Motilal Oswal Financial Services in a note said changes to the company’s business model have led to an increase in the forecast by 7 per cent and topline momentum is here to stay and the base of sales growth is far less challenging in the remaining two-quarters of FY21.

“Two factors make PGHH an attractive long-term core holding such as huge category growth potential in the feminine hygiene segment, coupled with the potential for market share gains due to considerable moats, and potential for higher-margin gains from premiumization in the feminine hygiene segment over the long term. With the return of strong topline and earnings momentum and among the best of breed return on equity of over 50%, valuations look attractive at 48.7 times / 40.5 times FY2022 estimates / FY2023 estimates earnings per share. The brokerage has a buy rating on the stock” it added. The board has declared an interim dividend of Rs 85 on every equity share of Rs 10. The record date for the dividend is 11 February 2021.

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