DABUR - RESEARCH REPORT

 

Dabur India Ltd. is one of India’s leading FMCG Companies with Market Capitalization of over Rs. 96,500 Crore. It is India’s most trusted name and the world’s largest Ayurvedic and Natural Health Care Company with experience of over 139 years. Company has 7.7 million Retail outlets with 3000+ SKUs, 400 products and 21 categories.

It has presence in 120 countries across the globe which includes Saudi Arabia, UAE, Kuwait, Qatar, Bahrain and Qatar in GCC region, Yemen, Jordan, Lebanon, Turkey, Egypt and Iraq in Levant region, India, Kyrgyzstan, Uzbekistan, Kazakhstan, Georgia, Mongolia, Philippines, Malaysia and Singapore in Asian region, Ethiopia, Libya, Algeria, Morocco, Tunisia, Sudan, Uganda, Kenya, Rwanda, South Africa, Congo, Nigeria and Ghana in African region along with major countries like USA, UK, Australia, Fiji, Canada and Russia. The Company has 14 manufacturing locations in India and 8 manufacturing facilities located in UAE, Egypt, Turkey, Nigeria, South Africa, Nepal, Bangladesh, and Sri Lanka and its overseas revenue accounted for 25% of its total revenue in FY24.

Company’s product portfolio includes products from various segments such as Oral Care, Hair Care, Ethicals, Baby Care, Cold and Cough, Energizers, Health Juices, Natural Gums, Health Supplements, Foods and Digestives. Its Oral Care brand includes various products such as Dabur Herbal Tooth Paste, Dabur Red Gel, Dabur Red Pulling Oil, Dabur Dant Rakshak, Dabur Babool, Dabur Laal Dant Manjan, Dabur Meshwak, Dabur Red Paste and Dabur Activated Charcoal Toothpaste. Its Home care brand includes various products such as Odomos, Odonil and Sanifresh. Company’s Skin Care brand offers various products such as Fem Crème Bleach, Oxy Life, Dabur Gulabari, Dabur Gulabari Rose water, Dabur Gulabari Rose Freshner, Dabur Gulabari Hand Sanitizer, Dabur Gulabari Moisturizing cream and Oxylife Men Hair Removal Cream. Company offers various products such as Real Power Fruit Juice, Real Activ 100% Juices, Hommade, Real Milkshakes, Hommade Coconut Milk, Hommade Garli Ginger Paste, Hommade Tomato Puree, Hommade Kalonji Tamatar ki chutney, Hommade Rajasthan ki garlic chutney and Dilli ki Hari Chatpati chutney under its FOOD brands.

Under Health Supplements brands it offers Chyawanprash, Honey, Glucose D, Vedic Suraksha tea, Ashwagandhadi lehya, Chyawanprash Sharangdhar Samhita, Stresscom Capsules, Giloy Neem & Tulsi Juice, Pure Herbs Immunity Booster Giloy Tablets, Pure Herbs Respiratory Health Tulsi Tablets, Dabur Madhu Rakshak, Pure Herbs Immunity Booster Haldi Tablet, Pure Herbs Health Booster Amla Tablet, Dabur ImuDab Syrup, Broncorid Syrup, Mensta Syrup, Rheumatil Tablet, Hepano Syrup and Active Blood Purifier. Its Digestives Brand offers various products such as Pudin Hara, Hajmola, Natural care, Hahmola Candy, Pudin Hara Lemon Fizz, Sat Isabgol, Laxirid tablets, Gastrina Tabelets, Laxirid Syrup and Active Antacid.

Company offers products such as Ashokrishta, Lahuvasava, Shankhpushpi Syrup, Lavanbhaskar Churna, Restora, Giloy Churna, Swarna Guggulu Gold, Shwaasamrit, Abhyarishta, Giloy ki Ghanvati, Camne Vid, Sitopaladi Churna, Ashwagandharishta, Ashwagandha churna and Triphala Churna under Ethicals category. Company also offers various hair care products such as Vatika Select Red Onion Black Seed Oil, Vatika Health Shampoo, Vatika Enriched Coconut Hair Oil for Hair Fall, Amla Hair Oil, Almond Shampoo, Dabur Almond, Anmol Gold Coconut Oil. Apart from this company offers Amla juice under Health Juice category, Dabur lal tail under baby care, Honitus Cough Syrup, Hot Sip, Cough Drops and Madhuvaani under Cold and Cold category and Shilajit and Sjila X Oil under Energizers category.

Company has also acquired 51% stake in Badshah Masala Private Limited, a branded player in the spices and condiments category with a major presence in Gujarat, Maharashtra, and Telangana, at Rs. 588 crs.

Company has been heavily investing towards its R&D and it has 13 Patents Granted to date & 3 Patents waiting for approval. Dabur’s global IPR portfolio comprises 2,827 registered trademarks and 811 pending trademark applications.

Fundamentals:

CMP Rs.	645
52 - week high Rs.	651
52 – week low	489
Dividend % (consolidated)	0.87 %
ROCE	22.3 %
BV (Rs.)	55.7
Sales (Rs.)	12,404 cr.
Debt to Equity ratio	0.14
P/E ratio	61.7
EPS (consolidated) Rs.	10.4
P/B ratio	11.3
Market Cap Rs.	1,11,656 Cr.
Face value Rs.	1
PEG ratio	15.9

 

 

 

Financial Results:

Company has reported Net Sales of Rs 2,814.64 crore in March 2024 which is up by 5.11% from Rs. 2,677.80 crore in March 2023. Its Quarterly Net Profit was at Rs. 349.53 crore in March 2024 up by 16.19% from Rs. 300.83 crore in March 2023. Company’s EBITDA stands at Rs. 595.66 crore in March 2024 up by 12.27% from Rs. 530.56 crore in March 2023. Dabur India EPS has increased to Rs. 1.97 in March 2024 from Rs. 1.70 in March 2023.

Key Updates:

1. Company has expanded its GlucoPlus-C portfolio with the launch of 'Dabur GlucoPlus-C Instant energy Drink.' This new, innovative instant energy drink marks its entry into the ready-to-drink glucose segment, providing consumers, with a dose of glucose, vitamin C, Iron & the benefits of real orange juice.
2. The company has also announced the expansion of its Hajmola portfolio with the launch of Hajmola Mr. Aam, A flavour which goes very well with the chatpata taste of Hajmola. The company has also roped in Bollywood Heartthrob Kartik Aaryan as the face of the brand.
3. Dabur India Ltd recently entered into mosquito Liquid Vaporiser Category with the launch of Odomos Universal Mosquito Liquid Vaporizer. It will be available in Electronic Mosquito Repellent Machine & Mosquito Repellent Refill which fits in all standard machines. The company has roped in Bollywood star Kajol as the face of the new brand.
4. Company has also set up an all-women production line with 100% women employees at its largest-ever greenfield plant near Indore. In this first-of-its-kind development, a crew of 20 women are engaged in the production of Dabur's range of Vatika Hair Oils -- a range of products 'Made by Women, for Women'.
5. It has also announced an investment of Rs 135 Crore for setting up a new manufacturing facility in South India. This new unit would manufacture a range of Dabur’s Ayurvedic Healthcare, Personal care and Home Care products like Dabur Honey, Dabur Red Paste and Odonil air fresheners.
6. Dabur recently completed of one of the largest and most complex cloud migrations in the Indian Consumer Goods industry, making Dabur the first Indian FMCG Cloud-Only Enterprise.
7. Company has recently signed on current youth heartthrob Kartik Aaryan as the face of its newly launched gel toothpaste - Dabur Red Bae Fresh Gel. This extension on the powerhouse mother brand ‘Dabur Red’, which is the World’s No. 1 Ayurvedic Toothpaste brand present in every 1 in 3 households in India, will further strengthen the franchise penetration, especially among the younger Indian population.
8. It has also announced the next big innovation in the world of Hair Care with the launch of Dabur Vatika Rosemary Hair Growth Oil -- a new hair oil fortified with the goodness of Rosemary, Hibiscus & Coconut, under the brand Vatika.
9. Company has recently expanded its Odonil portfolio with the launch of ‘Odonil Exotic Room Spray’, a unique water-based aerosols-spray format that offers superior and long-lasting fragrance.
10. Company has also roped in Bollywood sensation Nora Fatehi as the celebrity brand ambassador for its newly launched cooling oil, Dabur Cool King Thanda Tel.
11. Company created an historic movement as it has now became a ‘Plastic Waste Positive company’ in India, having collected, processed and recycled 35,000 MT of post-consumer plastic waste from all over India.
12. Company has expanded its Odonil portfolio with the launch of ‘Odonil Gel Pocket’, a unique Gel-based air freshener which gives superior and long-lasting fragrance.
13. Dabur has also joined hands with the Center for International Forestry Research (CIFOR) and World Agroforestry (ICRAF) to roll out a mega initiative aimed at improving trees, fruits, medicinal and aromatic plantation practices on farms, outside forests areas, using agroforestry across Uttar Pradesh, Haryana, Rajasthan, Odisha, Andhra Pradesh, Assam and Tamil Nadu.
14. Company marked its entry into the women’s personal hygiene space with the launch of ‘Fem Ultra Care Sanitary Napkins’. This e-commerce exclusive launch, which further strengthens brand Fem’s presence in the personal care market in India, is being launched on India’s leading e-commerce platform Flipkart.
15. Company has also launched two revolutionary breakthrough products – Premium Sugar-Free health restorative Ratnaprash Sugar-Free & Ayurvedic Digestive Tonic Aampachak kadha.

In last 3 Years the stock gave a return of 6.21% as compared to the rise of Sensex and Nifty in the same period.

Fast-moving consumer goods (FMCG) sector is India’s fourth-largest sector and has been expanding at a healthy rate over the years because of rising disposable income, a rising youth population, and rising brand awareness among consumers. With household and personal care accounting for 50% of FMCG sales in India, the industry is an important contributor to India’s GDP. Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector. The urban segment accounted for a revenue share of around 65% and it is the largest contributor to the overall revenue generated by the FMCG sector in India. In Fy23 the FMCG sales in the country grew by 7-9% by revenues and 7.5% by volumes in the April-June 2023 quarter which was the highest in the last eight quarters, led by a revival in rural India and higher growth in modern trade. In upcoming years, the FMCG industry in India is expected to grow more and more owing to strength in the sector and Indian economy. Total revenue of FMCG market is expected to grow at a CAGR of 27.9% by FY27, reaching nearly US$ 615.87 billion. Indian food processing market size is expected to reach US$ 470 billion by 2028, exhibiting a growth rate (CAGR) of 9.5% during 2023-2028. The Union government has also approved a new PLI scheme for the food processing sector, with a budget outlay of Rs. 109 billion (US$ 1.46 billion) and Incentives under the scheme will be disbursed for six years to 2026-27.

Even the The Indian e-commerce market is anticipated to grow from US$ 83 billion in 2022 to US$ 185 billion in 2026. By 2030, it is expected to have an annual gross merchandise value of US$ 350 billion. Mobile wallets, Internet banking, and debit/credit cards have become popular among customers for making transactions on e-commerce platforms and the total value of digital transactions which was US$ 300 billion in 2021 is now projected to reach US$ 1 trillion by 2026. The India online grocery market size has been projected to grow from US$ 4,540 million in 2022 to US$ 76,761.0 million by 2032, at a CAGR of 32.7% through 2032. Dabur has reported 9% Compounded sales growth and 2% Compounded Profit growth in last 3 years with ROE of 20%.

Dabur having years of experience, wide presence and R&D capabilities is well poised to enjoy a sweet spot in India’s growing FMCG market backed by a growing stream of revenue through new product launches and expansion plans in upcoming years. Company has also been maintaining a healthy dividend payout of 53.2% making it a favorable choice for long term investors. Considering company’s financial performance over the years, healthy dividend payout, Government of India’s push for FMCG sector, growth of FMCG in upcoming years and company’s global presence, investors can invest in this company for long term period.

 

HET ZAVERI

info@smartinvestment.in

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