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ATS Company Reports: Dabur ltd.
1.
2. Current price BSE 274.80
Sector FMCG
No of shares 1756511990
52 week high 276.90
52 week low 170.80
BSE Sensex 29056.55
Nifty 8812.70
Average Volume BSE 52471.00
Average Volume NSE 1143269.00
BSE Code 500096
NSE Symbol DABUR
Dabur India Limited
Recommendation – BUY/HOLD
Date – 09/03/2015
3. Company Overview
Dabur India Limited, a fast-moving consumer goods company, manufactures and sells hair care, oral care,
skin care, health care, home care, and food products worldwide. Its health care products comprise health
supplements; digestive products; and over the counter and ayurvedic ethical products, such as products for
cough and cold, gastro-intestinal, rejuvenation, and women’s health, as well as memory enhancers,
medicated oils, baby care products, and rubs and balms.
The company sells its health supplement products under the brand names of Dabur Chyawanprash, Dabur
Honey, and Dabur Glucose; and digestive products under the Hajmola, as well as Pudin Hara, Hingoli,
Nature Care, Sat Isabgol, Lavan Bhaskar Churana, and Triphala Churana brand names. It also offers
personal care products, such as hair oils under the Dabur Amla, Dabur Vatika, and Dabur Almond brand
names; shampoos under the Dabur Vatika brand name; toothpastes and toothpowders under the Dabur
Red, Babool, Meswak, Promise, and Lal Dant Manjan brand names and natural and ayurvedic skin care
products, including Fem, Dabur Gulabari, and Dabur Uveda range products. In addition, the company offers
fruit juices and beverages under the Real brand, unsweetened juices under the active brand, and cooking
pastes under the HOMMADE brand home care products, including air fresheners, mosquito repellents,
surface cleaners, dish washes, and toilet cleaners under the Odonil, Odomos, and Odopic brand names;
consumer health products professional grooming products, such as professional facial kits and body
bleaches under the OxyLife and Fem brand names; and guar gum and other natural gums. Dabur India
Limited sells its products through independent distributors in India. The company was founded in 1884 and
is based in Ghaziabad, India.
The current market capitalisation stands at Rs 46,890.09 crore.The company has reported a consolidated
sales of Rs 2,073.57 crore and a Net Profit of Rs 283.73 crore for the quarter ended Dec 2014.
5. Industry Overview
The overall fast moving consumer goods (FMCG) market is expected to increase at a compound annual
growth rate (CAGR) of 14.7 per cent to touch US$ 110.4 billion in the period 2012-2020, with the rural FMCG
market anticipated to increase at a CAGR of 17.7 per cent to US$ 100 billion during 2012-2025.
The market size of the Indian FMCG sector is expected to reach US$ 135 billion by 2020 from US$ 44.9 billion
in 2013. The phenomenal growth of the FMCG industry especially in the tier II and tire III cities in India is
mostly due to the improvement in the standard of living of the people of such cities and the rise in the level of
disposable income.
It is also the fourth largest sector in the Indian economy and has grown at an annual average of about 11 per
cent over the last decade. Food products, the leading market segment with 43 per cent of the overall market
revenue together with personal care at 22 per cent make up two-thirds of the sector's revenue.
The Government of India's policies and regulatory frameworks such as relaxation of license rules and approval
of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of
the major growth drivers in this sector. The government has also amended the Sugarcane Control Order,
1966, and replaced the Statutory Minimum Price (SMP) of sugarcane with Fair and Remunerative Price (FRP)
and the State Advised Price (SAP).
There is a lot of scope for growth in the FMCG sector from rural markets with consumption expected to grow
in these areas as penetration of brands increases. Also, with rising per capita income, which is projected to
expand at a CAGR of 7.4 per cent over the period 2013-19, the FMCG sector is anticipated to witness some
major growth.
6. Balance Sheet
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Sources Of Funds
Total Share Capital 174.38 174.29 174.21 174.07 86.76
Equity Share Capital 174.38 174.29 174.21 174.07 86.76
Reserves 1,727.96 1,420.49 1,128.28 927.09 662.48
Networth 1,902.34 1,594.78 1,302.49 1,101.16 749.38
Secured Loans 17.79 22.47 19.12 17.57 24.27
Unsecured Loans 26.50 219.11 254.15 235.78 81.80
Total Debt 44.29 241.58 273.27 253.35 106.07
Total Liabilities 1,946.63 1,836.36 1,575.76 1,354.51 855.45
Application Of Funds
Gross Block 1,017.04 937.70 883.23 766.88 687.23
Less: Accum. Depreciation 363.39 321.12 297.90 269.32 236.28
Net Block 653.65 616.58 584.55 497.56 450.95
Capital Work in Progress 16.73 17.07 25.12 11.92 23.31
Investments 1,118.42 729.41 552.72 519.23 348.51
Inventories 558.20 499.74 528.57 460.58 298.44
Sundry Debtors 323.12 255.32 224.17 202.46 130.48
Cash and Bank Balance 297.47 319.40 261.20 26.08 48.80
Total Current Assets 1,178.79 1,074.46 1,013.94 689.12 477.72
Loans and Advances 154.21 390.37 603.61 461.81 348.94
Fixed Deposits 0.00 0.00 30.09 166.33 115.11
Total CA, Loans & Advances 1,333.00 1,464.83 1,647.64 1,317.26 941.77
Current Liabilities 894.61 771.96 695.70 539.05 471.73
Provisions 280.56 219.57 592.40 535.36 440.10
Total CL & Provisions 1,175.17 991.53 1,288.10 1,074.41 911.83
Net Current Assets 157.83 473.30 359.54 242.85 29.94
Miscellaneous Expenses 0.00 0.00 53.83 82.95 2.74
Total Assets 1,946.63 1,836.36 1,575.76 1,354.51 855.45
Contingent Liabilities 1,338.05 1,719.07 1,337.82 1,075.89 173.48
Book Value (Rs) 10.91 9.15 7.48 6.33 8.64
7. Profit and Loss Account
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Income
Sales Turnover 4,870.08 4,349.39 3,798.05 3,305.42 2,891.00
Excise Duty 0.00 0.00 38.72 30.99 23.58
Net Sales 4,870.08 4,349.39 3,759.33 3,274.43 2,867.42
Other Income 108.85 86.89 6.89 39.16 27.95
Stock Adjustments 12.32 -25.83 59.33 78.31 9.68
Total Income 4,991.25 4,410.45 3,825.55 3,391.90 2,905.05
Expenditure
Raw Materials 2,591.06 2,301.80 2,092.87 1,740.68 1,393.97
Power & Fuel Cost 49.87 48.12 46.41 42.39 35.43
Employee Cost 343.93 281.24 243.36 230.84 212.34
Other Manufacturing Expenses 0.00 0.00 25.22 25.21 22.74
Selling and Admin Expenses 0.00 0.00 605.84 589.09 557.26
Miscellaneous Expenses 1,071.82 937.98 145.04 100.15 103.84
Total Expenses 4,056.68 3,569.14 3,158.74 2,728.36 2,325.58
Operating Profit 825.72 754.42 659.92 624.38 551.52
PBDIT 934.57 841.31 666.81 663.54 579.47
Interest 19.35 18.40 13.40 12.93 13.28
PBDT 915.22 822.91 653.41 650.61 566.19
Depreciation 53.89 73.24 36.81 37.73 31.91
Other Written Off 0.00 0.00 29.07 16.60 5.66
Profit Before Tax 861.33 749.67 587.53 596.28 528.62
PBT (Post Extra-ord Items) 861.33 749.67 587.53 596.53 528.43
Tax 189.23 158.69 123.79 124.85 93.70
Reported Net Profit 672.10 590.98 463.24 471.41 433.33
Total Value Addition 1,465.62 1,267.34 1,065.87 987.68 931.61
Equity Dividend 305.17 261.44 226.47 200.19 173.60
Corporate Dividend Tax 51.87 43.56 36.74 32.82 29.50
Per share data (annualised)
Shares in issue (lakhs) 17,438.13 17,429.35 17,421.01 17,407.24 8,675.86
Earning Per Share (Rs) 3.85 3.39 2.66 2.71 4.99
Equity Dividend (%) 175.00 150.00 130.00 115.00 200.00
13. Investment Thesis
Dabur Ltd. is in a healthy financial position with Rs.1728Cr as reserves and the debt of the company is
significantly decreasing.
Company is able to sustain a CAGR of 39% in RoNW and 14% as Net Profit Margin along with a R0E of
38.5% over past five years.
Company have a well diversified product mix with more than 400 products in customers disposal which will
help the company to tap all segments of customers.
Change in demography pattern and disposable income in Indian population along with huge difference in per
capita expenditure in FMCG products when compared with other developing countries gives company a good
growth opportunity.
Increase in healthcare, skincare, hair care and personal care consciousness among the targeted population
provides good revenue potential.
Availability of vast distribution and marketing network helps the company to tap in market potential.
Selling of products in Asian and African market will guarantee revenue because of untapped FMCG market in
those countries along with fast growth in these countries. And selling of Ayurvedic products in European and
American market can grow significantly due to less competition and increase in awareness about Ayurvedic
products.
Impressive dividend and bonus history of the company.