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Does Dabur Ltd. address the needs of the entire FMCG Spectrum

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Dabur At a Glance

1.Turnover of Rs. 5,283 Crore (FY12)

2. 2 major strategic business units (SBU)

3. Consumer Care Business

4. International Business Division (IBD) – 2 Subsidiary Group companies, Dabur International, NewU

5. 17 ultra-modern manufacturing units spread around the globe

6. Products marketed in over 60 countries

7. Wide and deep market penetration with 50 C&F agents

8. More than 5000 distributors

9. Over3.4 million retail outlets all over India

The whooping numbers very well show that Dabur has made its presence felt to a majority of population in India and abroad as well.

Read more about List of FMCG Manufacturers in India.

Dabur Businesses

Consumer Care Business – The business addresses consumer needs across the entire FMCG spectrum through four distinct business portfolios of Personal Care, Health Care, Home Care & Foods. Some of the master brands produced by Dabur are as follows:

      • Dabur – Ayurvedic healthcare products
      • Vatika – Premium hair care
      • Hajmola – Tasty digestives
      • Real – Fruit juices & beverages
      • Fem – Skin care products

International Business Division or the IBD caters to the health and personal care needs of customers across different international markets, spanning Nepal, Bangladesh, the Middle East, North & West Africa, EU and the US.

Dabur Facts

  1. Dabur (Dabur India Ltd.) is the largest Ayurvedic medicine manufacturer
  2. Fourth largest FMCG Company in India
  3. Revenues of US$1 Billion (over Rs 5,300 Crore)
  4. Market Capitalization of US$4 Billion (Rs 20,000 Crore)
  5. Building on a legacy of quality and experience of over 125 years
  6. Operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care & Foods
  7. Set up Dabur in 1884 to produce and dispense Ayurvedic medicines by Dr. S.K.Burman, a physicist in Bengal
  8. Dabur’s Ayurvedic Specialties Division has over 260 medicines for treating a range of ailments and body conditions-from common cold to chronic paralysis.

Dabur Key Fundamentals

      • Market Cap (Rs Cr.): 21,804
      • EPS – TTM (Rs): 3.08
      • P/E Ratio (x): 40.75
      • Face Value (Rs): 1.00
      • Book Value /sh. (Rs): 7.47
      • P/B Ratio(x): 16.74

Dabur Key Financials

Mar-12 Mar-11 Mar-10 Mar-09
Key Ratios
Debt-Equity Ratio 0.22 0.2 0.17 0.13
Long Term Debt-Equity Ratio 0 0.02 0.03 0.02
Current Ratio 1.08 1 0.94 0.94
Turnover Ratios
Fixed Assets 4.59 4.53 4.78 4.91
Inventory 7.65 8.68 10.28 10.47
ROCE (%) 32.19 47.24 62.58 62.66
RONW (%) 38.54 50.95 58.27 58.99

The company has written off its long term debt to bring its long term D/E ratio to 0 which is a desirable state. Also the company’s D/E is very low as compared to industry standards of 0.31 though historically seen the company’s D/E has increased. Company’s turnover has improved on fixed assets but we can see its return on Capital Employed and Net worth has declined significantly which is a matter of concern for company’s operations.

Dabur Valuation Ratios

Mar-12 Mar-11 Mar-10 Mar-09
Price Earning (P/E) 43.43 38.12 34.11 24.55
Price to Book Value ( P/BV) 14.22 15.17 18.36 11.57
EV/EBIDTA 27.78 24.82 23.94 18.28
Market Cap/Sales 4.9 5.07 4.78 3.52

If we look at the company’s stock performance we see that the P/E ratio has improved historically which indicates investors’ willingness to pay for a share has improved over the years making the share a good stock to look at. The Enterprise value as compared to EBITDA has also improved.

Some other facts

      • Close to 69% of the company’s share is held by Indian Promoters and Group
      • Company has regularly taken care of the shareholder’s wealth and have announced annual dividend since 1992 the latest being a payout of 130% with an yield of 1.22%. It was announced in March 2012

Dabur Outlook

The FMCG companies are expected to sustain its double-digit growth in coming quarters as seen historically. The volume growth might see pressure but the overall mix of volume and price rise will drive the growth for the industry which will be positive and preferable for the economy, industry, companies and of course investors. Thus, outlook is positive for near term.


Niraj Satnalika

Niraj is an MBA in International Business (Finance). Prior to this he completed B.Tech in Electronics and Instrumentation. He is currently working with Confederation of Indian Industry (CII), Kolkata in capacity of Consultant. Satnalika is actively involved with an NGO and works towards promoting education among the underprivileged.

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