DABUR INDIA LTD.
 
  

 
 

SHARETIPSINFO >>Research Reports >> Dabur India Ltd.    (06-12-2008)

 

LISTING
BSE
CMP
Rs 81
52 WEEK HIGH/LOW
Rs 126/Rs 60
FACE VALUE
Rs 1.00
PE RATIO
20
P/BV
19
Market Cap
7093 Crore

COMAPANY OVERVEIW:
Dabur India is head quartered in Ghaziabad, is a leading FMCG company India. It was promoted by S K Burman in 1884.the company was given the name `Dabur India` in 1986. Earlier it was operating under the name of Dabur (S K Burman) pvt ltd, since 1930.The company business is carried out by three divisions.


The divisions are:
Consumer Care Division(CCD)
Consumer Health Care(CHD)
Dabur Food ltd.
The consumer care division offer wide range of products in hair care, oral care, health supplements, digestive and candy.
Consumer Health Care division offers product based on Ayurveda.
Dabur food ltd which produces fruits juices, cooking pastes, sauces.
Dabur has some of the famous brand in its portfolio. Some of the famous brands are:
Dabur Chawanyaprash.
Babool tooth paste.
Meswak tooth paste.
Vatika shampoo.
Anmol hair oil.
Hajmola.
Hajmola candy.
Dabur Honey.
Odomas.
Odonil.
Pudin hara.
Livfit.
Dabur Amla hair oil.
Vatika hair oil.
Binaca tooth paste.
Glucose D.
Hingoli.
Dabur Janam Ghutti.
Dabur Lal Tel.
Lemoneez
Promise tooth paste
Satisabgol
Shilajit
Shankha Pushpi.

Dabur has manufacturing units in the following places in India:
Sahibabad (UP).
Baddi (Himanchal).
Alwar (Rajasthan )
Katni (MP).
Narenderpur (West Bengal).
Rudrapur (Uttaranchal).


Dabur has manufacturing facilities at following places outside India:
Dubai.
Egypt.
Nigeria.
Nepal.
Bangladesh.

SHARE OF DIFFERENT SEGMENT OF BUSINESS IN THE REVENUE:

Consumer care division (CCD) has shown a YOY growth of 13.9%.
Consumer health division (CHD) has shown YOY growth of 24.9%.
International business (IBD) grew at rate of 40%.


INDUSTRY OVERVIEW:
FMCG is the fourth largest sector in the Indian economy with a market size of   around of Rs 75000 crore. The industry size could be Rs 1, 40000 crore by 2010.it is a key component of India’s GDP as FMCG accounts for 5%of the total factory employment in the country and it also creates employment for 3 million people in downstream activities. Modern retailing store are the future for the FMCG product and they are growing at exponential rates.
INVESTMENT RATIONAL:
Dabur is setting up new manufacturing unit.
Dabur to grow at rate 20%.
Diversified investment strategy.
Dabur International Ltd, wholly owned subsidiary of Dabur India Ltd, has set up a green field manufacturing unit in the UAE.
Dabur India is planning to expand its production capacity double 2010 with Rs 100 crore investment.
FEM acquisition will give Dabur an access to bleaching segment. FEM is the number one in the segment.

KEY RISKS:
Sustained price war in the FMCG segment.
Downtrend in the business cycle.

SHAREHOLDING PATTERN:

 

 

NO.OF SHARE

%OF SHARE

PROMOTER

611567473

 

70.69%

 

INSTITUTION

191068932

 

22.12%

 

GENERAL PUBLIC

62172844

 

7.19%

 

GRAND PUBLIC

864809249

 

100.00%

 

FINANCIAL:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

TOTAL INCOME

1546.16

1375.03

2259.63

2395.08

EXPENDITURE

-1329.62

-1135.97

-1890.47

-1957.41

OPERATING PROFIT

216.54

239.06

369.16

437.67

DEPRECIATION

-28

-19.05

-34.26

-36.43

PBIT

 

188.54

220.01

334.9

401.24

INTEREST

 

-12.44

-5.66

-15.38

-16.8

PBT

 

176.1

214.35

319.52

384.44

TAX

 

-19.1

-25.78

-37.32

-51.36

PAT

 

157

188.57

282.2

333.08

CHANGES IN TOTAL INCOME: CAGR IN TOTAL INCOME IS 15.7%.

 
CHANGE IN OPERATING INCOME:  CAGR IN OPERATING INCOME IS 26.4%.

CHANGE IN NET PROFIT: CAGR IN NET PROFIT IS 28.49%.

RATIOS:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

 

EPS

1.81713

2.182523

3.266204

3.851526

 

NPM

10.15419

13.71388

12.48877

13.90684

 

OPM

14.00502

17.3858

16.33719

18.27371

INTEREST COVERAGE

15.15595

38.87102

21.77503

23.88333


EPS is showing compounded annual increase of 28%.
Interest coverage remains high at 23.That is company is well positioned to take more debt on its balance sheet for expansion.
NPM and OPM are showing a continuous increase though at slower pace.


COMPARISON OF Q2FY2009 WITH Q2 FY2008:

 

 

30-Sep-07

30-Sep-08

TOTAL INCOME

480.57

705.66

EXPENDITURE

-375.67

-568.14

OPERATING PROFIT

104.9

137.52

DEPRECIATION

-5.64

-10.55

PBIT

 

99.26

126.97

INTEREST

 

-1

-3.95

PBT

 

98.26

123.02

TAX

 

-12.48

-15.61

PAT

 

85.78

107.41

CHANGE IN INCOME, OPERATING PROFIT&NET PROFIT:


VALUATION:
Company is trading at 20X to trailing twelve month earning. PE/Growth ratio comes at around 0.7,which is at lower than 1.On conservative basis even if PE/Growth stand at 0.9.The price is expected  to be anywhere around Rs 100.8.


CONCLUSION:
Downside in the stock is very limited. The FMCG sector will show resilience to the downtrend in the economy and is expected to perform better. We expect 20-25% gain on this counter. Investor could accumulate the stock on every decline.

 

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