Final - AFSA

Financial Statement Analysis
N.L Dalmia Institute of Management Studies and Research
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Table of Contents
ECONOMIC ANALYSIS.............................................................................................................................2
GDP Growth Rate and Inflation Trends:............................................................................................2
Impact of Global Economic Trends:...................................................................................................4
SECTOR ANALYSIS...................................................................................................................................8
Sector Growth: ...................................................................................................................................9
Market share of major players in FMCG: ........................................................................................10
SWOT / Porters of the Sector...........................................................................................................11
Contribution to GDP:........................................................................................................................14
Regulatory Framework: ...................................................................................................................15
Competitive Advantage Peculiar to FMCG:.....................................................................................16
Forecasted Sector Growth ...............................................................................................................16
DABUR INDIA LTD:................................................................................................................................20
Introduction:.....................................................................................................................................20
Performance and Market Share of Dabur in various products: .....................................................21
Major Competitors...........................................................................................................................22
Profitability Trend ............................................................................................................................23
Sales Trend: ......................................................................................................................................23
Share Holding Pattern changes:.......................................................................................................24
Core Management Team: ................................................................................................................24
Financial Ratio Analysis:.......................................................................................................................25
Profitability Ratios:...........................................................................................................................25
Turnover Ratios:...............................................................................................................................27
Valuation Ratios:..............................................................................................................................29
Leverage Ratios: ...............................................................................................................................31
Liquidity Ratio: .................................................................................................................................32
Cash Flow Analysis: ..............................................................................................................................33
Comparative Analysis:..........................................................................................................................37
Balance Sheet:..................................................................................................................................37
Profit and Loss:.................................................................................................................................39
Common Size Analysis..........................................................................................................................41
Balance Sheet:..................................................................................................................................41
Profit & Loss: ....................................................................................................................................44
Free Cash Flow to the Firm ..................................................................................................................46
Share Price Trend: ................................................................................................................................46

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ECONOMIC ANALYSIS
GDP Growth Rate and Inflation Trends:
Real GDP: Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value
of economic output adjusted for price changes (i.e., inflation or deflation). This adjustment
transforms the money-value measure, nominal GDP, into an index for quantity of total
output.
According to an update of its World Economic Outlook by International Monetary Fund,
India is set to become the world’s fastest growing major economy ahead of China, in the
next couple of years. India is expected to grow at 7.6% in 2016 as per recent updates by the
IMF.
Index of Industrial Production: The Index of Industrial Production (IIP) is an index for India
which details out the growth of various sectors in an economy such as mining, electricity
and manufacturing. The all India IIP is a composite indicator that measures the short-term
changes in the volume of production of a basket of industrial products during a given period
with respect to that in a chosen base period. It is compiled and published monthly by the
Central Statistical Organisation (CSO) six weeks after the reference month ends.
The IIP which had slipped into negative territory during the year is indicating a revival over
the next few months touching a high of 5% in February 2015.

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Inflation Trends: The recent decline in Oil prices have been favourable for India which
imports almost 80% of its domestic oil needs. This has led to reduced imports, curtailed
inflationary pressures and helped the government’s finances by reducing its subsidy bill.
India’s inflation is measure by two trends, Consumer Price Index (CPI) and Wholesale Price
Index (WPI).
India’s consumer inflation (depicted in CPI) which had been stubbornly high in the double
digits between 2010 and 2013, has come down to about 5% currently, in part due to RBI’s
tight monetary policy and sharp decline in commodity prices. From November 2014
onwards the WPI has started to show deflationary trends. Cooling of inflation is generally a
positive indicator for consumption and demand and has helped reduce pressure on margins
across the industry.
While these indicators are positive for the industry, on the ground revival in business is still
slow and taking more time than expected.
FMCG Sector: According to the Nielson Global Survey of Consumer Confidence and Spending
Intentions, India was at the top spot in consumer confidence among 60 countries at 129 in
the fourth quarter of 2014, up from 126 in the third quarter and an average of 120 from
2009 until 2014. This was also near its all-time high of 131 in the fourth quarter of 2010.

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Despite a marked buoyancy in consumer confidence as reported by Nielsen, it did not
translate into increased consumption across sectors including the FMCG industry. The sector
reported muted growth for most part of the year with some key segments even reporting
de-growth, blamed largely on the sense of uncertainty prevailing among consumers during
the past few years.
If fiscal 2013-14 was considered a tough year for Indian consumer sector, it only worsened
in 2014-15. Though the emerging trends did indicate that the growth deceleration has
bottomed out, it was still too early to detect any signs of recovery. According to the Nielson
Company, FMCG sector growth rates slipped further to low single digits around the middle
around the middle of fiscal 2014-15. With growth rates beginning to inch up marginally
towards the end of the fiscal, the sector is expected to stage a recovery in the coming
quarters.
Impact of Global Economic Trends:
1. Big Data
Data explosion is underway as the ability to acquire, store and process data continues to
improve exponentially. This includes social media related brand engagement scores
generated through mentions, searches, likes, comments etc. all of which can be analysed to
deliver meaningful insights.

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The FMCG world already had weekly consumer sales, brand tracking, consumer panels,
shopper data from friendly and well compensated retailers and another few hundred
metrics depending on which data/analytics organisation you talk to. 95% of the data being
generated and sold to eager marketers and analysts is useless. Some of it, due to its very
high frequency of delivery is probably detrimental to the business, as it leads the
organisation to believe in a short term truth that does not actually exist in the long term.
This leads to poor strategic options being taken. The smarter organisations will buy only the
relevant data (manage information costs), deduce the correct linkages to consumer
behaviour and use it effectively to develop products, manage trade and communicate
effectively to consumers.
2. Speed of social media
Information now moves at a rapid speed. A tweet, FB post or a Youtube video can go viral in
hours. No longer can an organisation sell a product that was unsaleable in a developed
market due to health concerns in another less developed market as regulations had not
caught up. Regulations will take time to catch up but consumer information is just a Google
search away. The brands may not all be global but we have the global consumer who may
live in Australia, but shops from the UK & China and is aware of the child labour issues at the
tea gardens in Assam where her tea comes from. To get an idea of the volume and speed:
when Germany defeated Argentina in the final there were 618,725 tweets per minute. PSY’s
music video ‘Gentleman’ had 100 million views in 4 days. Information dissemination will be
rapid and with no place to hide. Smarter brands will use this effectively to reach globally
while limiting brand communication costs.
3. Health Concerns:
This will continue to impact consumer food buying decisions. This is one of the biggest
trends with a few key sub trends
a. Fresh & locally sourced and at premium prices
Consumer desire for fresher products without any additives will drive development of fresh,
locally sourced, ready to cook products. A number of these products will appear in the
“chilled” part of the supermarket. This growth will be at the cost of highly processed
products in a tin or pouch, stored at ambient temperatures with long shelf life ranging from
6 months to a few years, will decline. Organisations with experience in managing a chilled
supply chain will get a head start.
b. Increase in boutique / artisan manufacturers
To provide locally sourced products there will be an increase in the number of small artisan
or gourmet producers who will showcase their products in a non-commercial package while
demanding premium prices. Most small operators will fail, but a constant pipeline of local
producers will emerge, motivated in some way by the growing number of food shows which
makes many believe they are the next Jamie Oliver. This will continue for a while till the
bigger organisations figure out a smart way to operate local operations again. This will be
hard as they would have spent a good part of the last 20 years closing local factories for
bigger more efficient units in cheap labour markets
c. Sugar
Everything with high sugar in products disguised as ‘food’ will need to re-invent itself at
some point in the future. Cereals with 20%+ sugar are definitely on the way out and this
trend will continue to accelerate. Sugary beverages, confectionery, snacks and biscuits etc.
will see reduced consumption and will have to re-invent themselves with smaller pack sizes
(150ml can of fizzy), warn consumers of over consumption, and not be seen to be fighting

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this trend among others. This will happen voluntarily or the local laws will take over.
Consumer knowledge of high sugar products to avoid will improve dramatically over the
next 10 years. Grocery shopping apps will not only tell you how much you have bought in
dollars, but also the total nutritional value of your purchase: for e.g. what percent of your
weekly purchase was sugar. Fat was the old villain, now it is sugars turn. Will obesity
reduce? I hope so.
Organic and Free Range will continue to grow and will gain substantial market share in some
categories. Current flaky rules around what is organic or free range will be tightened as
more players get attracted to this segment. Brands will enter this premium segment to
overcome the low profits of the mass segments.
4. Online grocery shopping
This is growing rapidly in most developed markets albeit off a small base. While most major
brick and mortar retailers now offer online shopping and delivery, the birth of smaller online
retailers with tight product lines and deeper prices will begin to emerge. Most modern
developed market retailers carry anything from 10,000 to 25,000 Stock Keeping Units
(product lines). Imagine an online retailer with only 500 SKUs or even lower. And when
some of these tight range online retailers grow big, brands which grew on the strength of
adding a new flavour or fragrance every quarter will struggle as category and range
management for a 500 SKU business will be easier, but brutal for brand owners.
5. Environment & Sustainability
Organisations that can demonstrate sustainability across their total ecosystem will benefit
from stronger consumer bonding scores. However the ability to charge a premium to cover
increased costs will remain limited as consumers will increasingly see sustainability as a
given rather than a perk to be afforded by few. The Tesla of the FMCG world is still to be
created. However, the larger manufacturers will try and create separate brands and
business units to capture the green consumer, some of these will succeed provided they
manage to distance their legacy brand from the new green offering.
6. Manufacturing Consolidation
As mega factories open across Asia and Eastern Europe, cost of production will continue to
come down due to massive economies of scale. Helped by the increase in number of free
trade zones and agreements, it will make less sense to have factories all over the world –
rather a mega unit optimised to be placed near source of raw materials and the bigger
markets. Over the last 50 years the growth of global FMCG organisations has been driven by
trying to sell a broadly similar product to all parts of the world. This has also resulted in
organisations becoming more centralised in new product and brand development while
keeping local operations to optimise the in-market execution.
7. Retailer polarisation
The current trend of the price discounters and premium high end retailers both growing at
the expense of the middle ground retailers will continue for a while till the middle ground
figures out a way to fight back. Fight back they will with sharper and more relevant
positioning (using themes of sustainability, ethical & local sourcing, etc.) while re-inventing
their range architecture and pricing strategies. Those that don’t will perish rapidly as they
get stuck in the middle with reducing share and supplier investment (trade spend)

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8. Ageing
How different would a supermarket product range look if everyone shopping there was 50+.
Filled with fresh foods, fish (salmon), wholegrain and few premium sweet offerings along
with a large aisle of health supplements. This demographic has more money and will place a
higher value on food quality. The challenge will be for brands to appear relevant to this
ageing demographic while being ‘cool’ enough to attract the younger consumers.

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SECTOR ANALYSIS
Fast-moving consumer goods (FMCG) or Consumer Packaged Goods (CPG) are products
that are sold quickly and at relatively low cost. Examples include non-durable goods such as
soft drinks, toiletries, over-the-counter drugs, processed foods and many other
consumables. In contrast, durable goods or major appliances such as kitchen appliances are
generally replaced over a period of several years.
FMCG have a short shelf life, either as a result of high consumer demand or because the
product deteriorates rapidly. Some FMCGs, such as meat, fruits and vegetables, dairy
products, and baked goods, are highly perishable. Other goods, such as alcohol, toiletries,
pre-packaged foods, soft drinks, chocolate, candies, and cleaning products, have high
turnover rates. The sales are sometimes influenced by some holidays and season.
Though the profit margin made on FMCG products is relatively small (more so for retailers
than the producers/suppliers), they are generally sold in large quantities; thus, the
cumulative profit on such products can be substantial. FMCG is probably the most classic
case of low margin and high volume business.
As explained above, FMCG consists of a lot of varieties of products. Some of them are given
below:
Food & Beverages: Holding a share of 18% in the FMCG segment, the size of the Food and
Beverage segment is estimated to be USD 8.5 billion. This segment includes products like
staples / cereals, bakery products, snacks, chocolates, ice cream, tea/coffee/soft drinks,
processed fruits and vegetables, dairy products, and branded flour.

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Health Care: Health care holds a share of 32% (one of the largest share in the FMCG market)
and the size is estimated at USD 15.2 billion. This segment includes products like OTC health
products like digestive products etc, and Ethicals.
Household and Personal Care: Standing as the largest stakeholder of the FMCG sector,
household and personal care occupies close to 50% of the market share of the FMCG sector.
Estimated at close to USD 23 billion this is the largest selling sector. It includes Oral care,
hair care, care, skin care, cosmetics/deodorants, perfumes, feminine hygiene and paper
products, Fabric wash, household cleaners.
Sector Growth:
The FMCG sector has grown at an annual average of about 11 per cent over the last decade.
The overall FMCG market is expected to increase at (CAGR) of 14.7 per cent to touch US$
110.4 billion during 2012-2020, with the rural FMCG market anticipated to increase at a
CAGR of 17.7 per cent to reach US$ 100 billion during 2012-2025.Food products is the
leading segment, accounting for 43 per cent of the overall market. Personal care (22 per
cent) and fabric care (12 per cent) come next in terms of market share.
Growing awareness, easier access, and changing lifestyles have been the key growth drivers
for the consumer market.
A Crisil report on the growth of various sectors in India till Q3 of FY 15 is given below:
If we have a close look, we can see that FMCG sector stands at the 5th
position in the growth
among all the sectors in India with an average of 7% YoY (Year-on-Year).

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Market share of major players in FMCG:
Source: www.ibef.org
Hair Oil: While the market leader is Marico with the bestselling product Parachute, Dabur is
not far behind with a market share of 17% with the brands of Vatika hair oil and Amla.
Oral Care: Colgate, the market leader and single line of product (oral care) have a whooping
55% share followed by HUL which has Pepsodent as the oral care brand capturing 30% of
the market. Dabur is at around 13% with Babool, Meswak and Dabur Red as the brands. The
product line of Dabur include toothpaste and toothpowder.
Fruit Juice: This is the sector where Dabur is the market leader with brands like Real, Activ,
Burrst, Hommade, Lemoneez etc occupying 55% of the market. Together with Pepsico these
two companies occupy close to 85% of the market share in the Fruit Juice segment.

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SWOT / Porters of the Sector
SWOT Analysis:
Strengths:
Presence of established distribution networks in both urban and rural areas:
FMCG is one of the strongest sectors in terms of distribution networks. One may not find a
book to write on in the remote areas, but a soap to bathe with is easily available.
Presence of well-known brands in the FMCG sector:
Due to its popularity of the brands and the loyalty and trust the consumers have it is fairly
easy to introduce a new product by the existing companies.
Foreign Direct Investment:
With an ease in the FDI policy of 100% in Single brand retail and 51% in Multi-brand retail,
the government is only helping the sector to grow. Entry by foreign brands will aid in
increase in the variety for the consumers.
There are various such policies by the government which act as catalysts in the growth of
the sector.
Weakness:
Lower Scope of Investing in technology for small players:
Not all the companies in the sector are leaders and operate on a large scale. It is sometimes
difficult for the small single product manufacturers to operate on a large scale and take the
benefit of economies of scale. Also, due to limited capital infusion and low scale of
operations, technological advancements are limited to these companies.

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Counterfeit Products:
FMCG sector is one of the highly targeted sector by companies bringing in counterfeit
products. These counterfeit products penetrate in the rural sector where brand awareness
is a little less hence earn the benefits of the actual brand.
Opportunities:
Untapped Rural Market:
India comprises of 70% rural markets. Despite having a vast distribution network, rural and
semi-urban markets account only for 35% of the revenues in the FMCG sector. There is a big
opportunity here for the companies to grow.
Rising Income Levels:
Incomes have risen at a brisk pace in India and will India’s nominal per capita income (USD)
continue rising given the country’s strong economic growth prospects. According to IMF,
nominal per capita income is estimated to have recorded a CAGR of 5.43 per cent over
2010-19E.
Threats:
Removal of Import Restrictions:
Having less import restrictions will only hamper the domestic companies. The domestic
brands will be replaced by international brands in the Indian market.
Slowdown in rural demand:
Rural demand is cyclical in nature and depends upon the seasons. Since the rural population
depends on agriculture for their income, a bad monsoon (or any bad crop favouring season
for that matter) will hamper the demand of the FMCG.
Rupee Depreciation:
The recent volatility in commodity prices and weakness in Indian rupee makes it difficult for
companies to finalize raw material prices, which affect the final price of the product.

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Competitive Rivalry (High):
Private label brands competing with Mainframe brands: Small private label brands in the
sector have similar products but due to lower quality they are priced at a discount and
hence compete with the mainframe brands.
Competition from MNC’s: Multi-national corporations give a big competition to the
domestic manufacturers. Due to the economies of scale which benefit the MNC’s at large,
they are able to price their products at a discount.
Threat of New Entrants (High):
Huge Investments in Setup: There is a high setup cost involved in opening a manufacturing
unit of an FMCG. Due to the high volume the companies are required to setup huge
factories with a large production capacity hence the high costs of setup.
Aggressive Spending on Advertisements: FMCG is such an industry where the
advertisements are a major expenditure to increase the sales volumes. Hence, a very high
cost is involved in spending on the advertisements (mainly print and television).
Substitute Products (High):
Presence of Multiple brands:
Since there are many brands in the FMCG sector competing against each other on similar
products the force of Substitute products is high.

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Narrow Product Differentiation:
Since many companies have similar products, there is narrow product differentiation among
the competitors.
Bargaining Power of Suppliers (Low):
Big FMCG companies are able to dictate the prices through local sourcing from a
fragmented group of key commodity suppliers.
Bargaining Power of Customers (High):
Low switching cost:
The cost of switching for the customers of the FMCG sector is extremely low hence the
bargaining power of the customers is high.
Influence of marketing strategies:
Since FMCG sector spends most of its selling expenses on advertisements, there is a direct
influence of the marketing strategies on the customers.
Availability of same or similar alternatives:
When a customer knows he/she has a choice of another brand in the same product, it
becomes easy to evaluate the rate the brands and then decide what to choose. This
increases the bargaining power of the customers.
Contribution to GDP:
The fast-moving consumer goods (FMCG) sector is an important contributor to India's GDP.
India's FMCG sector is the fourth largest sector in the economy and creates employment for
more than three million people. Its principal constituents are household care, personal care
and food and beverages. The market is expected to maintain a high growth rate as the the
population (particularly the middle class and rural segments) converts to branded products.
In 2014, retail e-commerce sales in India generated over five billion U.S. dollars. That figure
is expected to increase to over 17 billion U.S. dollars by 2018.
With an approximate share of 2.2% in the current GDP of India, FMCG is the 4th largest
sector in the Indian economy in terms of size.

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Regulatory Framework:
The upcoming Union Budget has depicted certain changes in the Regulatory Framework of
the FMCG sector. The confirmation of the below changes will only be formalised when the
budget is announced officially however, below are the excerpts:
GST:
1. Implementation of GST from April 1, 2016.
2. The rate of GST on services is likely to be 14 per cent and on goods is proposed to be
20 per cent.
3. FMCG sector wants an early rollout of the Goods‐and‐Services tax (GST) so as to
reduce supply chain constraints, improve competitiveness of FMCG companies
against unorganised players.
Excise Duty
1. Excise duty on instant tea, quick brewing black tea, and ice tea would be decreased
to reduce the retail price by 30 per cent.
2. Excise duty on other beverages and lemonade would be decreased to reduce retail
sale price by 35 percent
Relaxation of License Rules:
1. Industrial license is not required for almost all food and agro-processing industries,
barring certain items such as beer, potable alcohol and wines, cane sugar, and
hydrogenated animal fats and oils as well as items reserved for exclusive
manufacture in the small-scale sector.
Statutory Minimum Price:
1. In October 2009, the government 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)
FDI in Organized Retail:
1. The government approved 51 per cent FDI in multi-brand retail in 2006, which will
boost the nascent organised retail market in the country.
2. It also allowed 100 per cent FDI in the cash and carry segment and in single-brand
retail.
Add FDI inflows: Rise over current years
Food Security Bill:
1. FSB would reduce prices of food grains for Below Poverty Line (BPL) households,
allowing them to spend resources on other goods and services, including FMCG
products.
2. This is expected to trigger higher consumption spends, particularly in rural India,
which is an important market for most FMCG companies.

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Telecom Regulatory Authority of India (TRAI) advertising regulations:
1. FMCG companies, which are top advertisers on television (above 50 per cent share),
are likely to face the twin risks of reduced inventory to advertise, which could be cut
by 25–30 per cent, and increased prices as broadcasters hike prices.
SETU Scheme:
1. Government has initiated Self Employment and Talent Utilisation (SETU) scheme to
boost young entrepreneurs. Government has invested USD163.73 million for this
scheme.
Source: SBI, Union Budget 2015 – 16, TechSci Research
Competitive Advantage Peculiar to FMCG:
Distribution Network: Since FMCG is one sector where reach to the remotest corner of the
country is of utmost importance, this is one competitive advantage the FMCG has over
other sectors. Today we might not find a small mobile phone in the interiors of Maharashtra
or India but a soap, shampoo or other toiletries are definitely available. Electricity may not
reach in the interiors but a book and a pencil will definitely reach.
This strength of the FMCG sector in its distribution network can be considered as a
competitive advantage which FMCG has over any other sector.
Forecasted Sector Growth
The size of FMCG in India in 2015 was close to USD 47.3 billion and expected to grow at a
CAGR of 20.6% and is expected to reach USD 103.7 billion till 2020.
Rural – set to rise
Rural areas expected to be the major driver for FMCG, as growth continues to be high in
these regions. Rural areas saw a 14 per cent, as against 12 per cent rise in urban areas and is
expected to grow at a CAGR of 18.1% by 2025. Most companies rushed to capitalize on this,
as they quickly went about increasing direct distribution and providing better infrastructure.
Companies are also working towards creating specific products specially targeted for the
rural market.

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The Government of India has also been supporting the rural population with higher
minimum support prices (MSPs), loan waivers, and disbursements through the National
Rural Employment Guarantee Act (NREGA) program. These measures have helped in
reducing poverty in rural India and given a boost to rural purchasing power.
Hence rural demand is set to rise with rising incomes and greater awareness of brands.
Total rural income, which is currently at around USD572 billion, is projected to reach USD1.8
trillion by FY21.
Urban trends:
The urban segment is the largest contributor to the sector, Urban/rural industry break-up
(2015) accounting for around 65 per cent of total revenue and had a market size of around
USD20.74 billion in 2015
Urban market accounts for around 65% of the total revenue of the FMCG sector.

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With rise in disposable incomes, mid- and high-income consumers in urban areas have
shifted their purchasing trend from essential to premium products. In response, firms have
started enhancing their premium products portfolio. Indian and multinational FMCG players
are leveraging India as a strategic sourcing hub for cost-competitive product development
and manufacturing to cater to international markets.
What the millenniums expect
According to a study by TMW and Marketing Sciences that surveyed 2,000 people across
different age groups ranging, young consumers are the most ‘rational’ and likely to spend
more time weighing up potential purchases. The survey also suggests that younger people
are using recommendations from their peers about products and services in order to make
rational purchase decisions. According to the study, shoppers aged 18 to 24 are 174 per cent
more likely to use recommendations on social media than shoppers aged 25 and over.
Another key factor today is – speed. Today's consumer wants packaged goods that work
better, faster, and smarter. The “need for speed" trend highlights the importance of speed
as a potentially decisive purchase factor for packaged goods products in a world where
distinctions between products are shrinking.
Younger consumers express the greatest need for speed, not a huge surprise for the
smartphone generation. Datamonitor's 2013 Consumer Survey found that younger
consumers those in the 15-24 year old age group were twice as likely to say that "results are
achieved quickly" has a "very high amount of influence" on their health and beauty product
choices than consumers in the oldest age group, those aged 65 or older. Speed matters, and
2014 will almost certainly see the introduction of new game-changing timesavers.

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Road Ahead
FMCG brands would need to focus on R&D and innovation as a means of growth. Companies
that continue to do well would be the ones that have a culture that promotes using
customer insights to create either the next generation of products or in some cases, new
product categories.
One area that we see global and local FMCG brands investing more in is health and wellness.
Health and wellness is a mega trend shaping consumer preferences and shopping habits and
FMCG brands are listening. Leading global and Indian food and beverage brands have
embraced this trend and are focused on creating new emerging brands in health and
wellness.
Source: www.shine.com

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DABUR INDIA LTD:
Introduction:
Dabur India Ltd is one of the leading FMCG Companies in India. The company is also a world
leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products. They operate in
key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home
Care and Foods. The company's FMCG portfolio includes five flagship brands with distinct
brand identities, Dabur as the master brand for natural healthcare products, Vatika for
premium personal care, Hajmola for digestives, Real for fruit juices and beverages and Fem
for fairness bleaches and skin care products.
The company operates through three business units, namely consumer care division (CCD),
international business division (IBD) and consumer health division (CHD). Their CCD
business is divided into four key portfolios: healthcare, personal care, home care and foods.
Their CHD business offers a range of healthcare products. Their IBD business includes
brands, such as Dabur Amla and Vatika.
The company has a wide distribution network, covering over 2.8 million retail outlets with a
high penetration in both urban and rural markets. Their products also have a huge presence
in the overseas markets and are available in over 60 countries across the globe. Their brands
are highly popular in the Middle East, SAARC countries, Africa, US, Europe and Russia.
Product Profile:
The Product Profile of Dabur includes variety of product lines in the FMCG segment:
I. Health Care
a. Supplements: Glucose D and Dabur Honey
b. Digestives : Dabur Pudin Hara and Dabur Hajmola
c. OTC Healthcare : Dabur Lal Tail, Dabur Honitus, Dabur Gripe Water
II. Personal Care
a. Hair Care : Dabur Vatika, Dabur Amla
b. Oral Care : Dabur Red, Dabur Babool
c. Skin Care : Fem, Dabur Gulabari, Dabur UVeda
III. Foods
Dabur Real, Dabur Activ, Burrst, Hommade, Lemoneez, Capsico
IV. Home Care
Sani Fresh Shine, Odonil, Odomos, Odopic
V. Consumer Health Ethical
For over 125 years, Dabur has mastered the art of producing Ayurvedic preparations,
blending traditional knowledge of drug manufacturing with scientific update. Today,
Dabur's Consumer Health Division -- which looks after marketing of Ayurvedic

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medicines and Ayurvedic Over-The-Counter products -- has redefined the Ayurvedic
market and healthcare promotion activities involving leading Ayurvedic practitioners
across the globe. At Dabur, we have more than 350 Shastriya (Classical) Ayurvedic
preparations, which form an important part of every Ayurvedic practitioner’s daily
practice.
VI. Professional Grooming Products: This is a range of differentiated offering for the
women and contains grooming products.
a. OxyLife Facial
b. Fem Queen’s Pearl Facial
c. Fem Gold Facial
d. Fem Body Bleach
VII.Guar Gum
Dabur India is one of the foremost companies who started manufacturing guar gum
and other natural gums products in India. The manufacturing facility was christened
as Natural Gums Division. With over 30 years rich experience, Dabur India is
supplying its natural gums products under brand name DABISCO.
Performance and Market Share of Dabur in various products:
Share Sector Brand
75% Branded Honey Market Dabur Honey
65% Ayurvedic Medicine Chyawanprash
60% Digestive Tablets Hajmola
90% Herbal Digestive Tablets Pudin Hara
55% Fruit Juices Real

22
Major Competitors

23
Profitability Trend
The operating profit as well as the net profit are showing an upward trend over the past 10
years except for 2011-12 where it has shown a decline. This decline is due to the higher
change in the total expenditure as compared to the change in sales.
Sales Trend:
The sales have been on a rise over the past 10 years which is a positive sign for the
company. The company has grown at a CAGR of 16.8% which is well above the industry
CAGR of 11%.

24
Share Holding Pattern changes:
There are no major changes in the shareholding pattern. Only minor changes in the FII and NRI
holdings but they are not very significant.
Core Management Team:
Mr. P D Narang Group Director
Mr. Sunil Duggal CEO
Mr. Mohit Malhotra CEO- IBD, Dabur International Ltd.
Mr. George Angelo ED-Sales
Mr. Sudhir Achar VP- R & D
Mr. K K Chutani ED-Marketing
Mr. Sharukh Khan Head- Operations
Mr. Ashok Kumar Jain VP(Finance) & Company Secretary
Mr. Lalit Malik CFO
Mr. Arun Gupta VP-Corporate Affairs
Mr. Vikram Bali Director- Business Planning & Reporting, Dabur International Ltd.
Mr. V Krishnan Executive Director-HR
Mr. Adarsh Sharma Busines Head
Mr. Jude Linhares VP-Manufacturing
Mr. Vivek Dhir Chief Marketing Officer, Dabur International Ltd.
Mr. Saibal Sengupta VP- Corporate Accounts

25
Financial Ratio Analysis:
Profitability Ratios:
a. EBITDA Margin: The EBITDA margin ratio shows that every rupee a company
generates in revenues results in what percentage of profits before all taxes and
interest is paid. This percentage can be used to compare the company’s efficiency
and profitability to other companies regardless of size.
The increase in the EBITDA margins of Emami is more than Dabur due to the difference in
certain manufacturing expenses which are explained above.
b. PAT Margin: The PAT margin is a profitability ratio that measures the amount of net
income earned with each rupee of sales generated by comparing the net income and
net sales of a company. In other words, the PAT margin ratio shows what percentage
of sales are left over after all expenses are paid by the business.
Dabur: In the past 3 years the EBITDA margin has remain
almost stagnant and they have never crossed the industry
average. Though the sales have been increasing their total
expenditure has also increased. This is due to the higher
cost of allocation in packing materials. Dabur has changed
the packing materials for many brands like Fem during the
course of the year.
Emami: In the past 3 years the EBITDA margin has been
increasing and they are always above the industry average.
Their packing material cost has lowered due to fall in oil
prices however, they have a larger amount of cost
allocation in Sales and Distribution (Advertising being a
large part of their expenditure) and there is scope of
reducing the cost here.
Dabur: The PAT has increased marginally but has always
been just below the industry average. The reason has
been explained above in the EBITDA margin. The
decrease in the Interest cost has been more or less
compensated by the increase in the Depreciation
amount and hence there is not much change in the PAT
margin due to factors coming after EBITDA.
Emami: The PAT has been on a rise and has also
surpassed the industry average. This effect has come
from the EBITDA due to reasons explained above.

26
The above difference in PAT Margins is due to the difference in the EBITDA margins which is
a result of the huge difference in the packing material cost.
c. Return on Capital Employed (ROCE): Return on capital employed or ROCE is a
profitability ratio that measures how efficiently a company can generate profits from
its capital employed by comparing net operating profit to capital employed. In other
words, return on capital employed shows investors how many dollars in profits each
dollar of capital employed generates. This ratio does not take into consideration the
Tax payments and the finance costs.
d. Return on Equity / Return on Net Worth: The return on equity ratio or ROE is a
profitability ratio that measures the ability of a firm to generate profits from its
shareholders investments in the company. In other words, the return on equity ratio
shows how much profit each rupee of common stockholders' equity generates.
When there are no Preference Shares in the company, the Return on Net Worth is
equal to the Return on Equity.
Dabur: ROCE is well above the industry average and
has remained somewhat in the range of 43% - 46%.
Emami: ROCE is above the industry average and has
consistently increased over the past 3 years.
Emami has been increasing its profitability
continuously at an increasing rate whereas Dabur is
increasing its profitability at a consistent rate. This
change in profitability coupled with no change in the
capital employed has given increasing returns to
Emami as compared to Dabur.
DuPont Analysis
Dabur: The Return to the Equity shareholders have
reduced over the past 3 years. This can be
attributed to the Equity Multiplier in 2014 and to
Asset Turnover ratio in 2015.
Emami: The Return to the Equity shareholders have
increased. A close look via the DuPont Analysis we
can attribute this increase to the PAT Margin since
that has increased significantly.

27
e. Return on Assets: The return on assets ratio, often called the return on total assets,
is a profitability ratio that measures the net income produced by total assets during
a period by comparing net income to the average total assets. In other words, the
return on assets ratio or ROA measures how efficiently a company can manage its
assets to produce profits during a period.
Turnover Ratios:
a. Fixed Asset Turnover: The fixed asset turnover ratio is an efficiency ratio that
measures a company’s return on their investment in property, plant, and equipment
by comparing net sales with fixed assets. In other words, it calculates how efficiently
a company is a producing sales with its machines and equipment.
Dabur: The Return on Assets have reduced over the
past 3 years. This can be attributed to acquiring of
new assets but not using them efficiently. This is not
a good sign for the company.
Emami: If we see in 2014, the Return has increased
due to increase in sales and almost no change in total
assets. In 2015, the company has increased its assets
(fixed and current both) however, the proportion of
increase of assets is more than that of sales and thus
has reduced the return on Assets in 2015.
Dabur: The efficiency of Dabur in terms of using its
Fixed Assets is well above the industry standards and
has increased over the past 3 years.
Emami: The efficiency of Emami in terms of using its
Fixed Assets is below the industry standards but has
increased over the past 3 years.
Dabur is utilizing its Fixed Assets well however, Emami
are not able to utilize their Fixed assets efficiently.

28
b. Inventory Turnover Ratio: The inventory turnover ratio is an efficiency ratio that
shows how effectively inventory is managed by comparing cost of goods sold with
average inventory for a period. This measures how many times average inventory is
"turned" or sold during a period. In other words, it measures how many times a
company sold its total average inventory rupee amount during the year.
c. Debtors Turnover Ratio: Accounts receivable turnover is an efficiency ratio or activity
ratio that measures how many times a business can turn its accounts receivable into
cash during a period. In other words, the accounts receivable turnover ratio
measures how many times a business can collect its average accounts receivable
during the year.
d. Creditors Turnover Ratio: The accounts payable turnover ratio is a liquidity ratio that
shows a company's ability to pay off its accounts payable by comparing net credit
purchases to the average accounts payable during a period. In other words, the
accounts payable turnover ratio is how many times a company can pay off its
average accounts payable balance during the course of a year.
Dabur: They are efficient enough to convert their
inventory into sales as their Inventory Turnover ratio is
well above the industry standards.
Emami: They are highly efficient to convert their
inventory into sales as their Inventory Turnover ratio is
well above the industry standards.
Emami is better at converting their inventory into sales
than Dabur. This is a sign of good inventory
management.
Dabur: This ratio has been decreasing over the past 3 years
and is also below the industry average. This may be due to
the long credit period to the debtors.
Emami: The ratio has been increasing over the past 3 years
and is also well above the industry standards. Their debtors
have reduced and a better Turnover may be because of the
short credit period.
Emami has been able to convert its debtors into cash much
faster than Dabur and hence more efficient in terms of the
credit policies. We do not know the credit policies at the
moment however, looking at the ratio we may safely assume
a shorter credit period than Dabur.

29
Valuation Ratios:
a. Price/Earnings Ratio: The price earnings ratio, often called the P/E ratio or price to
earnings ratio, is a market prospect ratio that calculates the market value of a stock
relative to its earnings by comparing the market price per share by the earnings per
share. In other words, the price earnings ratio shows what the market is willing to
pay for a stock based on its current earnings.
b. Price / Book Value Ratio: The price to book ratio, also called the P/B or market to
book ratio, is a financial valuation tool used to evaluate whether the stock a
company is over or undervalued by comparing the price of all outstanding shares
with the net assets of the company. In other words, it’s a calculation that measures
the difference between the book value and the total share price of the company.
Dabur: The P/E has been increasing over the past 3
years. This implies that the market is asking for more
investment as compared to the earnings it is giving to
the shareholders.
Emami: If we have a close look at the P/E of the past 3
years, we see a sudden rise in the P/E in 2015. This is
due to the increase in the share price in the market
from around Rs 450 in Mar 2014 to around Rs 960 in
Mar 2015.
Dabur has been giving a consistent increase in the P/E
whereas Emami has suddenly increased its P/E.
Dabur: There is no change in the Creditors Turnover
ratio which means that they have been able to pay off
their creditors at the same rate as they used to.
Emami: They have reduced their Creditors turnover
ratio considerably in 2014. This has been due to
increase in creditors and decrease in purchases of raw
materials. It is not clear as to why creditors have
increase even though purchases have reduced. In 2015
it remained stable at 5.70.

30
c. EV/EBITDA: An enterprise multiple is a ratio used to determine the value of a
company. The enterprise multiple looks at a firm as a potential acquirer would,
because it takes debt into account - an item which other multiples like the P/E ratio
do not include.
d. Dividend Payout Ratio: The dividend payout ratio measures the percentage of net
income that is distributed to shareholders in the form of dividends during the year.
In other words, this ratio shows the portion of profits the company decides to keep
to fund operations and the portion of profits that is given to its shareholders
Dabur: The P/BV ratio has been consistently
increasing. This shows that the investors have
faith in the growth of the company and hence
are paying a higher amount as compared to
the book value of the share.
Emami: The P/BV has been similar for 2 years
but has increased in 2014-15. This is due to
the increase in share price as explained
above.
Dabur: This ratio has been increasing since the
past 3 years. This is showing an optimistic
valuation of the company with respect to its
earnings.
Emami: This ratio declined in 2014 but increased
significantly in 2015. In spite of reducing the debt
of the company, the EV/EBITDA has increased
and this can be attributed purely to the increase
in the share price of the Equity.

31
Leverage Ratios:
a. Debt-Equity Ratio: The debt to equity ratio is a financial, liquidity ratio that compares
a company's total debt to total equity. The debt to equity ratio shows the
percentage of company financing that comes from creditors and investors. A higher
debt to equity ratio indicates that more creditor financing (bank loans) is used than
investor financing (shareholders).
b. Interest Coverage Ratio: The interest coverage ratio is a financial ratio that measures
a company’s ability to make interest payments on its debt in a timely manner. Unlike
the debt service coverage ratio, this liquidity ratio really has nothing to do with being
able to make principle payments on the debt itself. Instead, it calculates the firm’s
ability to afford the interest on the debt.
Dabur: The Debt-Equity has been decreasing over the
past 3 years and is well below the industry average. The
decreasing D/E Ratio does not give a leverage to the
Equity shareholders which can be seen in the reducing
ROE and being below the industry average gives scope
to the company to raise more debt.
Emami: The Debt-Equity has been decreasing over the
past 3 years and is well below the average. This
company has not taken the benefit of the financial
leverage however, the ROE has increased purely due to
an increase in PAT. Also, this company has scope of
raising more Debt in case further capital is required.
Dabur: Dabur has given close to 50% of their earnings as
dividends and it has been increasing marginally over the past
3 years.
Emami: They have given close to 40% of their earnings as
dividend to their shareholders.
Dabur has given more dividend out of its earnings than
Emami. In spite of this, Emami has a higher P/E ratio which
shows that investors are more optimistic about Emami than
Dabur and are ready to pay more price in the market to
Emami.

32
Liquidity Ratio:
a. Current Ratio: The current ratio is a liquidity and efficiency ratio that measures a
firm's ability to pay off its short-term liabilities with its current assets. The current
ratio is an important measure of liquidity because short-term liabilities are due
within the next year.
b. Quick Ratio: The quick ratio or acid test ratio is a liquidity ratio that measures the
ability of a company to pay its current liabilities when they come due with only quick
assets. Quick assets are current assets that can be converted to cash within 90 days
or in the short-term. Cash, cash equivalents, short-term investments or marketable
securities, and current accounts receivable are considered quick assets.
Dabur: The ICR of Dabur is much above the
industry standards which implies that the ability
of the company to pay off its Interest out of the
Earnings is crazy!
Emami: The ICR of Emami is way above the
industry standards which implies that the ability
of the company to pay off its interest out of the
earnings is crazily awesome!
Dabur: The Current Ratio is well below the
industry standard for this company and has
remained stagnant at 1.00. This company has a
bad Current Asset management.
Emami: The current ratio has increased and is well
above the industry standards. This increase can be
attributed to an increase in the current assets and
a reduction in the current liabilities.
Dabur: Dabur has a Quick Ratio of close to 0.6. This
implies that for ever Re 1 of the Current liabilities, the
company has 60p to pay off.
Emami: They have a Quick ratio of close to 1.4 which
implies that for every Re 1 of current liabilities, they have
Re 1.4 to pay it off.
Emami can pay off its Creditors quicker than Dabur and
will still have 40p left with them per Re 1.

33
Cash Flow Analysis:
Dabur:
Year Mar 15 Mar 14 Mar 13
Cash Flow Summary
Cash and Cash Equivalents at
Beginning of the year
146.34 67.39 35.72
Net Cash from Operating
Activities
839.2 712.23 702.55
Cash Flow From Operating
Activities
Net Profit before Tax &
Extraordinary Items
976.53 861.33 749.67
Adjustment For
Depreciation 65.97 53.89 49.05
Interest (Net) -102.45 -70.33 -57.47
P/L on Sales of Assets 1.11 0.82 0.66
P/L on Sales of Invest -17.95 -17.02 -9.56
Prov. & W/O (Net) 46.71 25.95 24.73
P/L in Forex -0.87 -1.31 -1.08
Others 23.96 0 0
Total Adjustments (PBT &
Extraordinary Items)
16.48 -8 6.33
Op. Profit before Working
Capital Changes
993.01 853.33 756
Adjustment For
Trade & 0th receivables -42.98 -52.47 -20.88
Inventories 7.6 -57.88 28.83
Trade Payables 85.66 147.75 86.76
Total (OP before Working
Capital Changes)
50.28 37.4 94.71
Cash Generated from/(used in)
Operations
1,043.29 890.73 850.71
Direct Taxes Paid -204.09 -178.5 -148.16
Total-others -204.09 -178.5 -148.16
Cash Flow before Extraordinary
Items
839.2 712.23 702.55
Net Cash Used in Investing
Activities
-613 -98.43 -345.9
Cash Flow from Investing
Activities
Investment in Assets :
Purchased of Fixed Assets -111.06 -96.18 -85.4
Sale of Fixed Assets 14.93 1.06 5.39
Financial/Capital Investment :
Purchase of Investments -6,259.30 -6,544.59 -4,607.18

34
Sale of Investments 5,654.59 6,451.48 4,303.63
Interest Received 84.67 85.62 49.45
Loans to Subsidiaires 0 1.2 -9
Others 3.21 2.98 -2.8
Net Cash Used in Financing
Activities
-336.8 -534.9 -327.8
Cash Flow From Financing
Activities
Proceeds:
Proceeds from Issue of shares
(incl share premium)
45.5 0.05 0.04
Proceed from 0ther Long Term
Borrowings
0 0 3.35
Proceed from Short Tem
Borrowings
86.89 0 0
Payments:
Of the Long Tem Borrowings 0 -0.84 -0.46
Of the short term Borrowings -2.05 -196.45 -34.75
Dividend Paid -394.79 -278.78 -243.43
Interest Paid -5.14 -11.42 -12.94
Others -67.16 -47.41 -39.58
Activities
-336.75 -534.85 -327.77
Net Inc/(Dec) in Cash and Cash
Equivalent
-110.5 78.95 28.87
Cash and Cash Equivalents at
End of the year
35.83 146.34 64.59
Dabur: The cash flow from operating activities has increased over the past 3 years.
Cash used in investing activities declined in 2014 but increased substantially in 2015 due to
the purchases of fixed assets.
Cash used in financing activities increased in 2014 but decreased in 2015 due to the increase
in the payments for short term borrowings and dividends in 2014 and receiving proceeds
form short term borrowings and issue of shares in 2015.
Overall there was a net increase in cash flows and then a decline over the past 3 years.

35
Emami:
Cash Flow Summary
Cash and Cash Equivalents
at Beginning of the year 263.37 278.66 272.48
Net Cash from Operating
Activities 496.62 378.49 326.64
Cash Flow From Operating
Activities
Net Profit before Tax &
Extraordinary Items 576.98 456.07 376.73
Adjustment For
Interest (Net) -52.1 -39.24 -33.12
Dividend Received -101.23 -17.73 -0.47
P/L on Sales of Assets 0.26 0.4 0.55
P/L on Sales of Invest 85.82 -2.44 -5.2
Prov. & W/O (Net) -7.62 8.87 0
P/L in Forex -7.33 -3.11 5.74
Total Adjustments (PBT &
Extraordinary Items) -50.72 -20.43 -11.31
Op. Profit before Working
Capital Changes 526.26 435.64 365.42
Adjustment For
Trade & 0th receivables 17.93 -5.93 20.05
Inventories 18.17 -24.36 -2.85
Trade Payables 23.56 38.59 -11.24
Others 6.06 14.46 4.3
Total (OP before Working
Capital Changes) 65.72 22.76 10.26
Cash Generated from/(used
in) Operations 591.98 458.4 375.68
Interest Paid(Net) 0 0 0
Direct Taxes Paid -95.36 -75.63 -49.04
Advance Tax Paid 0 0 0
Others 0 0 0
Total-others -95.36 -75.63 -49.04
Cash Flow before
Extraordinary Items 496.62 382.77 326.64
Extraordinary Items
Others 0 -4.28 0
Net Cash Used in Investing
Activities -217.08 -130.14 -118.71
Cash Flow from Investing
Activities
Investment in Assets :

36
Purchased of Fixed Assets -99.75 -58.36 -77.55
Sale of Fixed Assets 1.19 0.67 1.74
Financial/Capital
Investment :
Purchase of Investments -1,811.06 -1,305.22 -616.52
Sale of Investments 1,527.44 1,167.26 538.94
Investment Income 0 0 0
Interest Received 56.54 44.65 39.95
Dividend Received 101.23 17.73 0.47
Others 7.33 3.13 -5.74
Activities -220.74 -263.64 -201.75
Cash Flow From Financing
Activities
Proceeds:
Dividend Paid -181.19 -188.94 -120.86
Interest Paid -5 -3.58 -6.41
Others -34.55 -71.12 -74.48
Activities -220.74 -263.64 -201.75
Net Inc/(Dec) in Cash and
Cash Equivalent 58.8 -15.29 6.18
Cash and Cash Equivalents
at End of the year 322.17 263.37 278.66
Emami: the cash flow from operating activities has increased over the past 3 years.
Cash used in investing activities has increased due to the rise in purchases of fixed assets
and investments. Cash used in financing activities has increased in 2014 due to dividend
payments and then reduced in 2015 due to repayment of loans as per the annual report.
Overall the net cash flows have declined and then increased in the past 3 years.

37
Comparative Analysis:
Balance Sheet:
Dabur :
SOURCES OF FUNDS :
Share Capital 0.73 0.05 0.05
Reserves Total 25.03 24.2 23.23
Equity Share Warrants -- -- --
Equity Application Money -- -- --
Total Shareholders Funds 22.81 21.51 20.13
Secured Loans -11.52 -20.83 17.52
Unsecured Loans 327.89 -87.93 -13.61
Total Debt 191.56 -81.7 -11.43
Other Liabilities 6.6 2.19 -2.99
Total Liabilities 26.24 7.57 14.22
APPLICATION OF FUNDS :
Gross Block 7.74 8.66 8.59
Less : Accumulated Depreciation 13.34 13.43 14.98
Less:Impairment of Assets -- -- --
Net Block 4.42 6.01 5.34
Lease Adjustment -- -- --
Capital Work in Progress -26.96 -1.99 47.41
Producing Properties -- -- --
Investments 58.99 8.99 85.65
Current Assets, Loans & Advances
Inventories -1.36 11.57 -5.34
Sundry Debtors 4.85 26.55 13.9
Cash and Bank -58.34 76.66 -35.55
Loans and Advances 34.77 -14.55 -12.07
Total Current Assets -8.88 21.25 -9.37
Less : Current Liabilities and Provisions
Current Liabilities 8.79 20.2 9.94
Provisions -15.55 15.27 28.19
Total Current Liabilities 3.43 19.08 13.62
Net Current Assets -68.44 32.98 -56.7
Miscellaneous Expenses not written off -- -- --
Deferred Tax Assets -1.52 2.57 -0.92
Deferred Tax Liability 10.96 15.67 13.42
Net Deferred Tax 18.08 24.75 26.08

38
Liabilities have increased at a low rate due to the reduction in loans and debt in 2014 but it
has increased significantly due to the increase in borrowings in the form of loans and debt in
2015.
Assets have increased due to the increase in inventories, debtors and cash and cash
equivalents in 2014 and investments in 2015.
Emami:
SOURCES OF FUNDS :
Share Capital 0 50.03 0
Equity Share Warrants -- -- --
Equity Application Money -- -- --
Secured Loans -48.56 -62.53 -59.54
Unsecured Loans 3.85 -47.85 -39.39
Total Debt -23.37 -56.67 -53.34
Other Liabilities 40.16 81 36.87
Total Liabilities 29.09 14.22 0.18
Gross Block -40.1 9.53 10.27
Less : Accumulated Depreciation -71.65 16.22 25.88
Less:Impairment of Assets -- -- --
Net Block 13.46 -0.23 -6.61
Lease Adjustment -- -- --
Capital Work in Progress 195.85 -80.87 -32.79
Producing Properties -- -- --
Investments 69.33 81.14 102.45
Inventories -13.3 21.7 2.6
Sundry Debtors -24.36 -6.54 1.96
Cash and Bank 23.13 -5.11 2.43
Loans and Advances -3.66 -3.09 -30.45
Total Current Assets 4.13 0.51 -3.31
Current Liabilities 15.7 35.19 -10.5
Provisions -18.76 -26.58 4.1
Total Current Liabilities 0.12 -2.07 -2.23
Net Current Assets 8.03 3.16 -4.4
Miscellaneous Expenses not written off -- -- --
Deferred Tax Assets 15.29 143.19 15.16
Deferred Tax Liability 60.12 -14.94 -1.37
Net Deferred Tax 158.66 -64.99 -5.66

39
Liabilities have increased due to an increase in shareholder's funds and other liabilities in
2014 and increase in reserves and unsecured loans in 2015.
Assets have increased in 2014 due to the rise in inventory and in 2015 due to the increase in
Net-block of assets and capital work-in-progress.
Profit and Loss:
Dabur:
INCOME :
Sales Turnover 11.76 11.98 15.88
Excise Duty 32.49 12.91 28.41
Net Sales 11.52 11.97 15.75
Other Income 25.71 16.37 70.89
Stock Adjustments 161.77 -148.09 -143.18
Total Income 12.21 12.99 14.1
EXPENDITURE :
Raw Materials 14.52 12.22 -19.46
Power & Fuel Cost 1.48 7.46 0
Employee Cost 14.26 16.85 26.22
Other Manufacturing Expenses 1.32 12.97 1,228.78
Selling and Administration Expenses 11.09 12.37 23.95
Miscellaneous Expenses 34.53 11.64 -8.48
Less: Pre-operative Expenses Capitalised -- -- --
Total Expenditure 12.11 12.68 12.35
Operating Profit 12.61 14.37 22.5
Interest -48.89 5.16 30.5
Gross Profit 13.91 14.59 22.33
Depreciation 22.42 9.87 -25.55
Profit Before Tax 13.37 14.89 27.71
Tax 13.04 19.23 32.48
Fringe Benefit tax -- -- --
Deferred Tax 13.48 19.66 -24.3
Reported Net Profit 13.46 13.73 27.58
The total income has increased due to the rise in sales. The expenditures such as raw
materials and miscellaneous have increased considerably. Depreciation expense has
increased whereas the tax expenses have reduced. The PAT has increased at a diminishing
rate over the past 3 years.

40
Emami:
INCOME :
Excise Duty 19.61 -5.08 42.53
Net Sales 19.09 4.79 17.07
Other Income 57.31 14.63 3.01
Stock Adjustments -153.85 198.89 -134.41
Total Income 18.16 6.05 19.03
EXPENDITURE :
Raw Materials 7.82 -3.33 19.45
Power & Fuel Cost 27.06 10.9 23.8
Employee Cost 12.61 27.9 26.53
Other Manufacturing Expenses -3.05 32.16 16.81
Miscellaneous Expenses 21.42 -1.62 -31.03
Less: Pre-operative Expenses Capitalised -- -- --
Interest 25.96 -36.23 -60.77
Gross Profit 25.56 21.79 26.41
Depreciation -4.08 54.88 13.62
Tax 56.53 16.12 39.62
Fringe Benefit tax -- -- --
Deferred Tax -185.49 984.15 -202.5
Reported Net Profit 18.43 23 26.07
The total income has increased at a low rate in 2014 but at a higher rate in 2015. The
expenditures have increased in the same pattern as sales interest reduced in 2014 then
increased in 2015 depreciation increased in 2014 then fell in 2015 hence PAT has increased
over the past 3 years at a low rate in 2014 but at a higher rate in 2015.

41
Common Size Analysis
Balance Sheet:
Dabur:
SOURCES OF FUNDS :
Share Capital 7 8.78 9.44
Equity Share Warrants 0 0 0
Equity Application Money 0 0 0
Secured Loans 0.63 0.9 1.22
Unsecured Loans 4.52 1.33 11.89
Total Debt 5.15 2.23 13.1
Other Liabilities 1.71 2.02 2.13
Total Liabilities 100 100 100
Gross Block 44.77 52.46 51.93
Less:Impairment of Assets 0 0 0
Net Block 27.21 32.9 33.38
Lease Adjustment 0 0 0
Capital Work in Progress 0.49 0.84 0.92
Producing Properties 0 0 0
Investments 70.9 56.29 55.56
Inventories 21.95 28.1 27.09
Cash and Bank 4.94 14.97 9.12
Loans and Advances 7.49 7.01 8.83
Total Current Assets 47.89 66.35 58.86
Provisions 8.1 12.1 11.29
Net Current Assets 2.84 11.36 9.19
Miscellaneous Expenses not written off 0 0 0
Net Deferred Tax -2.01 -2.15 -1.85
Total Assets 100 100 100

42
The major portion of liabilities is shareholder's funds due to reserves. The share of total
debt has increased at a low rate in 2014 and high rate in 2015. The major chunk of assets
are held in the form of investments. The next share is in block of assets and inventories.

43
Emami:
SOURCES OF FUNDS :
Share Capital 1.78 2.3 1.75
Equity Share Warrants 0 0 0
Equity Application Money 0 0 0
Secured Loans 0.66 1.65 5.02
Unsecured Loans 1.23 1.52 3.34
Total Debt 1.88 3.17 8.36
Other Liabilities 3.11 2.86 1.81
Total Liabilities 100 100 100
Gross Block 47.33 102.01 106.37
Less:Impairment of Assets 0 0 0
Net Block 33.23 37.81 43.28
Lease Adjustment 0 0 0
Capital Work in Progress 1.96 0.85 5.1
Producing Properties 0 0 0
Investments 39.33 29.98 18.9
Inventories 9.28 13.82 12.97
Cash and Bank 25.56 26.8 32.25
Loans and Advances 4.93 6.61 7.78
Total Current Assets 44.23 54.84 62.31
Provisions 7.7 12.23 19.03
Net Current Assets 23.25 27.79 30.77
Miscellaneous Expenses not written off 0 0 0
Net Deferred Tax -0.97 -0.48 -1.58
Total Assets 100 100 100
Shareholder's funds form a major part of liabilities in the form of reserves (90%-95%) block
of assets, investments and cash and bank balances form major chunk of assets.
Comparing the 2 companies, we can say that Dabur is utilizing its cash better by investing it
and Emami has scope of investing the cash and bank balances.

44
Profit & Loss:
Dabur:
INCOME :
Excise Duty 1.33 1.12 1.13
Net Sales 96.96 97.56 98.45
Other Income 2.46 2.2 2.13
Stock Adjustments 0.58 0.25 -0.58
Total Income 100 100 100
EXPENDITURE :
Raw Materials 38.56 37.78 38.04
Power & Fuel Cost 0.9 1 1.05
Other Manufacturing Expenses 13.5 14.95 14.95
Miscellaneous Expenses 4.48 3.74 3.78
Less: Pre-operative Expenses Capitalised 0 0 0
Interest 0.18 0.39 0.42
Gross Profit 18.61 18.33 18.08
Tax 3.65 3.62 3.43
Fringe Benefit tax 0 0 0
Deferred Tax 0.17 0.17 0.16
The PAT is approximately 13% of the sales over the past 3 years. Expenditures are
approximately 81% of sales as there is huge expenses in raw materials and selling and
administration expenses.

45
Emami:
INCOME :
Excise Duty 1.86 1.84 2.06
Net Sales 95.75 95 96.14
Other Income 4.86 3.65 3.38
Stock Adjustments -0.61 1.35 0.48
Total Income 100 100 100
EXPENDITURE :
Raw Materials 34.48 37.79 41.45
Power & Fuel Cost 0.57 0.53 0.5
Other Manufacturing Expenses 0.93 1.13 0.91
Selling and Administration Expenses 27.02 24.96 26
Miscellaneous Expenses 1.29 1.25 1.35
Less: Pre-operative Expenses Capitalised 0 0 0
Interest 0.23 0.22 0.36
Gross Profit 28.69 27 23.51
Tax 4.61 3.48 3.18
Fringe Benefit tax 0 0 0
Deferred Tax 0.36 -0.5 -0.05
PAT is on an average 20.5% of sales over the 3 years. Expenditure is approximately 73% of
sales with major expenses being raw materials and selling and administration.
Comparing the two companies, it is seen that Dabur needs to reduce its raw material
expenses.

46
Free Cash Flow to the Firm
Dabur Emami
Years 2013 2014 2015 2013 2014 2015
Free Cash Flow to the Firm 671.3 675.16 810.33 419.32 379.34 353.14
Share Price Trend:
As depicted in the graph, the share price of Dabur has always remained between Rs 230.00
and Rs 310.00 over the past 52 weeks.

Final - AFSA

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