Investment Ideas - Dabur India Ltd

Dabur India Ltd
Dabur is a 125 years old company which started functioning in 1884. This company was promoted by the Burman family. In the beginning the company was primarily engaged in manufacturing Ayurvedic preparations. Today Dabur has transformed itself as a world leader in Ayurvedic products. It has over 250 herbal and Ayurvedic products lined up, starting from Heal care products, personal hygiene, digestives, fruit juices, beverages, fairness bleaches and skin care products. The company is said to have access to 2.8 million retail outlets with a high reach in urban and rural areas. 

Dabur India Ltd is one of India’s leading Fast Moving Consumer Goods (FMCG) Companies. It has become a most trusted household name in the Indian Market. Some of the famous brand names of Dabur includes, Vatika (Hair Oil), Dabur Amla Hair Oil, Anmol Coconut oil, Vatika shampoo (a wide range of products from anti-dandruff to conditioners), Tooth Paste ( Meswak, Neem, Basil, Clove), Soaps (Sandalwood, Neem, Aloe Vera), Gulabari(Rose water), boroglow (Antiseptic cream), Vatika fairness cream, Chyawanprash, Hajmola, Pudin Hara, Dabur Balm ( pain reliever), Restora, Honitus syrup ( Cold syrup), Rheumatil gel, Itch care, Ring Ring ( ring worm reliever), Baby Olive Oil.
In the Food Product range, the brand name includes, Dabur Honey, Real fruit Juice, Real Active, Cooking Pastes, Coconut milk, red pepper sauce, Lemoneez, cardamom extract, Glucose D, Rose syrup.

The company’s Revenues are said to be above Rs. 6146 Crores. Its Market Capitalisation stands at 5 Billion US Dollars.
Dabur’s product ranges have reached beyond the Indian markets to make its presence in over 60 countries. There is a large concentration of Indian Communities living in overseas. Indian communities in the Middle+ East, SAARC countries, Africa, US, Europe and Russia find Dabur products familiar and trustworthy. It is reported the Dabur's overseas revenue accounts for over 30% of the total turnover.
Dabur has 11 manufacturing facilities in India. It has also factories abroad too. Altogether Seventeen manufacturing facilities help maintain the product line of Dabur. Dabur is also exporting Active Pharmaceutical Ingredients (APIs) to Europe, Latin America, Africa, and other Asian countries

In the month of June 2012 Dabur International Limited sold off its entire interest in Weikfield International (U.A.E.) Ltd. In November 2012, the Company established a subsidiary Company in Brazil, named Namaste Cosmeticos Ltd.

According to the available sources, The Company has registered a revenue growth of 12.5% during Q4 FY13. Domestic revenues increased by 15.1% yoy.  It has registered domestic volume growth of 12% yoy. The hair care segment has crossed Rs10bn mark and recorded 9.6% yoy. Shampoos and Hair oils growth of 29.4% and 13% respectively the Toothpaste segment growth rate was 12.3%. However, the brand Babool did not register any growth. The brands Odomos, Odonil, and Sanifresh have seen increase of 33.3%. The Skin care products have seen growth of 11.1%.

In the Foods segment Real has given a thrust to boost the growth to a 22.6%.  The Health supplements have recorded  a good growth of 22.6% ( Dabur Honey and Glucose) The overall revenue of the company is currently at 16.4% yoy. 

The overseas operations have also yielded good revenues, a growth of 11.6%. The company hopes the Namaste business could do well in the future to bring more revenue.

The Debt/Equity  has come down from 0.6 to 0.5. There is a good chance to this figure to come down even lower in the forthcoming Financial Years. The Current EPS stands at 4.4 and it is expected to rise to 5.1 and 6.0 for FY14 and Fy15 respectively.

The promising growth rate and the company’s stand in the Indian Market, Dabur becomes an important stock, which an investor should actively consider for his portfolio. At the time of writing this notes the Dabur’s shares were trading at Rs. 155.40.Traders with a view of short term investment plan can accumulate this share for the targets of 173 and 183.

Disc: I do not hold any shares or any interests in the above said company.