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BROKING | DEPOSITORY | DISTRIBUTION | FINANCIAL ADVISORY|MERCHANT BANKING
DABUR INDIA LTD
Stock Coverage
Date 02nd Aug 2018
BSE Code 500096
NSE Code DABUR
Market Cap (Rs Cr) 75721.28
52 week High/Low 438.35/297
Industry Household & Personal
Products
Face Value Rs 1/Share
Shares O/S (In No) 176.63 Cr
EPS * 8.04
Book Value* 33.55
P/E 53.32
P/B 12.78
*Note: On Consolidated TTM basis
Shareholding Pattern as on June’ 2018
Research Analyst : Astha Jain
Dabur India Ltd is a leading packaged consumer products manufacturer, offering a wide range of products based on traditional Ayurveda and Nature. With a legacy of over 134 years, Dabur is today the oldest and the most trusted name in the field of Ayurveda and Health Care. Some of co’s most iconic brands, which are popular across the globe, are Dabur Chyawanprash, Dabur Amla, Vatika, Real, Hajmola, Fem and DermoViva. Robust Distribution Network: During fiscal 2017-18 co’s direct reach crossed 1 million retail outlets, making it one of the largest direct distribution networks in the FMCG space in India. Co have also significantly strengthened its rural footprint with now reaching close to 42,000 villages across the country with 370 super-stockists and over 10000 sub stockist. The company covers over 200,000 chemists and over 10,000 Ayurvedic pharmacies to promote and sell its healthcare products. At the end of FY18, NewU’s (co’s chain of beauty retail stores )retail footprint stood at 83 stores across 31 cities. Healthy double digit growth across segments in Q1FY19 : During Q1FY19 , Shampoo business posted a growth of over 30%. Dabur’s Honey sales continued to report strong gains, growing by around 42%, driving the Health supplements category growth to 27.5% during the same quarter. Skin Care category grew by 27.1%, while the foods business, led by strong demand for co’s packaged juices, posted over 26% growth during Q1’19. Digestives business also grew by nearly 22% during the quarter, while Dabur’s Home Care and Oral Care businesses reported an over 17% growth. The domestic FMCG business reported a highest-ever volume growth of 21% during the quarter. Strong growth strategy: The company’s strategy is to pursue a strong growth path with increasing focus on Ayurveda and nature-based products in Healthcare, Personal Care and Foods segments. Company considers its healthcare portfolio as unique and a strong generator of profitable growth for a long time to come. The penetration of OTC products is very low in India. This provides enormous opportunities for growth in the future. In addition, the increasing consumer preference for Ayurvedic products provides Dabur a unique platform for offering products which are in sync with consumer preferences.
Valuation
The company is currently trading at 53.32 of TTM eps of Rs 8.04 while it is trading at 47x of FY19E eps & 41x of FY20E eps. During Q1 FY19, co has shown strong financial performance with approx. 7 % increase in margin & healthy double digit growth in volumes across all segments which is significantly ahead of market .With co’s continuous focus on brand building & margin expansion along with innovation, we believe that Dabur will sustain strong growth going forward. Hence we are recommending “Buy”
on the stock with price target of Rs 515 for long term horizon.
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For Private Circulation Only HEM RESEARCH
BUY CMP 428.70 TARGET 515 LONG TERM INVESTMENT
DABUR INDIA LTD
BROKING | DEPOSITORY | DISTRIBUTION | FINANCIAL ADVISORY|MERCHANT BANKING
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Company Overview
Dabur India Limited is one of India’s leading FMCG Companies. The company’s business model is based upon its three verticals: Healthcare (HC), Home and Personal Care (HPC) and Foods.The healthcare vertical is based on Ayurveda and the company has the entire range of Ayurvedic classical medicines in its portfolio. In addition, the company offers a wide range of proprietary products called Branded Ethicals, which are based on the principles and knowledge of Ayurveda. The company’s HPC vertical also has strong linkages with Ayurveda as most of the products incorporate herbal and natural ingredients, which provide additional health benefits as compared to other products. Co’s Hair Care and Oral Care portfolios are strongly positioned as ‘Herbal’ and have been gaining market share based on this proposition. The company’s Foods portfolio is strongly positioned on the Health & Wellness platform. The brands Réal, Activ and Hommade are centered on the theme of Health and Nutrition and provide a host of products based on the goodness of fruits and vegetables in a convenient format. Dabur India's FMCG portfolio today 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, Réal for fruit-based beverages, and Fem for fairness bleaches & skin care. Co’s brand portfolio includes 16 brands in the billion rupee turnover basket with Dabur Anmol Coconut Oil joining this coveted list this year. The year also saw co’s flagship toothpaste brand Dabur Red Paste cross Rs 500 crore turnover mark, making it the fourth Dabur brand to reach this mark after Dabur Amla, Vatika and Réal. Brands such as Hajmola, Dabur Red, Real and Dabur Amla featured in the Most Trusted Brands survey reflecting the trust of millions of consumers. In India, Dabur’s manufacturing units are spread across 12 locations: Baddi (Himachal Pradesh), Pantnagar (Uttarakhand), Sahibabad (Uttar Pradesh), Tezpur (Assam), Jammu, Silvassa, Katni, Narendrapur, Pithampur, Nashik, Alwar and Newai (both in Rajasthan). Co’s key overseas markets are Gulf Cooperation Council, Iran , North Africa , Egypt , South Africa , Nigeria, Kenya , Turkey, UK , US ,Canada ,Nepal , Bangladesh , Sri Lanka , Myanmar . Pakistan , Afghanistan. In the 2017-18 financial year, the R&D team developed 16 new products for India and International markets. In the domestic market, these new launches have helped further establish Dabur as the Science-based Ayurveda expert. In addition to the products launched in Indian market, the company is also introducing a range of healthcare products in its overseas markets. Moving forward in this direction, Dabur introduced the world’s first pure vegetarian single-herb capsule that does not have any chemicals and preservatives. The capsule with a revolutionary vegetable origin capsule cover has been introduced under the Nature4U brand, which sells in a few of co’s international markets such as UK. The first new product in this range was Dabur Nature4U Boswellia, for promoting bone and joint health.
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DABUR INDIA LTD
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Strong growth across segments in Q1FY9
For Private Circulation only HEM RESEARCH
In Q1FY19 Oral care
recorded a growth of
17.3%
Hair oil category grew by
18.8% on the back of
strong growth in Anmol
Coconut Oil, Amla Hair
Oil, Brahmi Amla Hair Oil
and Dabur Almond Hair
Oil
Homecare category
posted double digit
growth of 17.4% mainly
on account of strong
growth in Odonil and
Sanifresh
Skin care recorded
growth of 27.1% driven
by double digit growth in
Gulabari, Fem bleaches,
HRC and facial kits
Health Supplements grew by 27.5% led by strong double digit growth in Chyawanprash & Honey
Higher media spends,
focus on impactful
media and more weeks
on air driving growth
DABUR INDIA LTD
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New Product Launches In line with its focus on Ayurvedic medicinal products Dabur launched 3 new products in FY18 in its branded ethical portfolio: • Agnisandeepam Churna, an Ayurvedic medicine for improving digestion. Introduced in a powder format, this product is enriched with anardana, amaltas, elaichi and kutki among other ingredients. • Dadimavaleha, a digestive tonic with Anar juice as the main ingredient. It helps cure acidity besides improving digestion. • Vasant Meha Ras, an Ayurvedic medicine for managing diabetes and its complications. It comes in a tablet format and is packed with Shilajit, Swarna Bhasma and Moti Bhasma, among other ingredients Dabur Honitus Hot Sip, a readyto- use Ayurvedic kadha for relief from cough and cold was also made available nationally and the product received a good response. In the Home and Personal Care vertical, Dabur Red Gel, India’s first Ayurvedic Gel toothpaste was rolled out nationally Strengthening its presence in the Shampoo market, Dabur relaunched the Vatika Shampoo range with Satt Poshan (power of Seven Natural ingredients). Packed with seven natural ingredients, this range of Shampoos is a unique blend of nature and science,offering gentle cleansing and conditioning. Dabur also unveiled a new and improved Vatika Enriched Coconut Hair Oil packed with the power of seven Ayurvedic herbs that help rejuvenate scalp and reduce hair fall With the flavoured variants of Hajmola gaining momentum, Dabur added a new variant Amrud (Guava) to its kitty. The new variant has received a good response from the market. Going forward, the company will continue to expand this range with addition of new variants and formats. Dabur has entered the fruit drinks market with the launch of a lower priced mango drink Réal Koolerz. The brand has been launched in 4 flavours – orange, apple, mixed fruit, mango and will be targeting the fruit drinks category which is estimated at more than Rs 6,000 crore.
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International Business
posted 10.5% growth in
constant currency terms
during Q1 FY19
In Q1FY19 , Ethicals
grew by 23.4% led by
medico marketing
initiatives and on the
ground activations
Shampoos category
grew by 30.3% driven
by focused marketing
initiatives and
improving bottle
saliency
Digestives posted growth of 21.6% on the back of strong performance of Hajmola tablets & launched a new variant Hajmola Chat Cola
Beverages grew by
26.8% on the back of
strong double digit
growth in Real and
Activ
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DABUR INDIA LTD
Consolidated P&L A/c
Rs Cr
Particulars FY16 FY17 FY18 FY19E FY20E
Net Sales 7779.66 7613.59 7721.85 8880.13 10212.15 Growth ( %) (2.13) 1.42 15.00 15.00 Expenditure 6261.38 6106.49 6106.88 6970.90 8016.54 EBIDTA 1518.28 1507.10 1614.97 1909.23 2195.61 Growth (%) -- (0.74) 7.16 18.22 15.00 EBIDTA Margin (%)
19.52 19.79 20.91 21.50 21.50
Other Income 217.19 303.33 305.18 350.96 403.60 Depreciation 133.19 141.02 159.71 184.35 212.00 EBIT 1602.28 1669.41 1760.44 2075.84 2387.21 EBIT Margin (%) 20.60 21.93 22.80 23.38 23.38 Interest 48.48 59.01 53.05 61.01 70.16 Exceptional Item (14.54) PBT 1553.80 1610.40 1692.85 2014.83 2317.05 Tax 299.90 330.34 335.35 398.94 458.78 PAT 1253.90 1280.06 1357.50 1615.89 1858.27 Min Int & Ass Sh (2.75) (3.12) (3.11) (3.11) (3.11) Consolidated PAT 1251.15 1276.94 1354.39 1612.78 1855.16 Growth (%) 2.06 6.07 20.37 15.03 NPM (%) 16.09 16.77 17.54 18.16 18.17
Ratios
Particulars FY16 FY17 FY18 FY19E FY20E
EPS 7.11 7.25 7.69 9.13 10.50
ROCE(%) 32.15 28.87 26.83 29.75 31.18
ROE(%) 30.00 26.34 23.73 26.89 28.40
Book Value 23.71 27.52 32.40 33.96 36.99
Debt/Equity 0.20 0.19 0.15 0.16 0.17
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DABUR INDIA LTD
Consolidated Balance Sheet
Rs Cr
Particulars FY16 FY17 FY18 FY19E FY20E
Sh Capital 175.91 176.15 176.15 176.63 176.63
Res & Surplus 3903.84 4566.98 5419.80 5711.58 6245.75
Sh App/Warrants 90.86 104.26 110.57 110.57 110.57
Minority Interest 21.71 24.77 26.53 26.53 26.53
Total Debt(Long Term+Short Term Borrowings)
792.16 910.72 828.83 953.15 1096.13
Other Long Term Liab & Provison
322.99 57.11 60.75 109.08 115.99
Net Deferred Tax Liability
88.24 108.04 109.05 109.05 109.05
Sources Of Fund 5395.71 5948.03 6731.68 7196.59 7880.65
Net Fixed Assets 1712.20 1945.51 2015.46 2297.55 2609.03
Non –Current Investments
1941.51 2554.40 3145.94 3173.29 3285.48
Intangible Assets 0.00 0.00 0.00 0.00 0.00
Other Non –Current Assets
330.08 117.86 100.48 108.98 133.38
Total Current Assets 3683.65 3114.47 3439.75 3783.69 4336.00
Current Liabilities & Provisions
2271.73 1784.21 1969.95 2166.93 2483.23
Net Current Assets 1411.92 1330.26 1469.80 1616.76 1852.77
Uses Of Funds 5395.71 5948.03 6732.68 7196.58 7880.66
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DABUR INDIA LTD
Consolidated Quarterly Financial Highlights
Rs Cr
Particulars Q1FY19 Q1FY18 Q4FY18 YoY% QoQ%
Total Income 2080.68 1790.06 2032.91 16.24 2.35
Total Expenses 1694.56 1481.17 1547.73 14.41 9.49
Operating Profit 386.12 308.89 485.18 25.00 (20.42)
Net Profit 329.22 264.14 396.20 24.64 (16.91)
PBIDTM % 18.56 17.26 23.87 7.54 (22.25)
NPM % 15.85 14.77 19.55 7.30 (18.93)
EPS 1.86 1.50 2.25 24.30 (17.33)
Past Price Movement
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