Corporate Financial Reporting & Analysis

Project Report

Financial Analysis of Dabur India Limited

Submitted By:
Vivek Jain
Shavir Bansal
Shubham Gupta
Vikram Anand
Udit Chandana
(Section F)

0404/51
0337/51
0347/51
0393/51
0381/51

DABUR FINANCIAL HIGHLIGHTS

BALANCE SHEET
BALANCE SHEET

MAR'14

MAR'13

MAR'12

MAR'11

MAR'10

Shareholder's Funds
Total Non-Current
Liabilities
Total Current
Liabilities
Total Equity &
Liability
ASSETS
Total Non-Current
Assets

19023.4

15656.1

13032.7

11011.6

7493.8

3555.1

3470.3

3910.9

3829.1

1219.2

11413.8

12441.1

11473.8

9238.4

8721.6

33992.3

31567.5

28417.4

24079.1

17434.6

14246.8

12186.2

11273.2

10105.9

5729.1

Total Current Assets

19745.5

19381.3

16605.9

13973.2

11678.1

Industry Outlook
Dabur has shown consistent performance in the last 5 years. It has
been able to build on its performance steadily with rapid growth in
the shareholders growth and total assets. Its market capitalization
has almost tripled and the share price has almost quadrupled in 5
years which is a phenomenal performance.
In 2010, Dabur undertook its 4 year plan up to 2014, which aimed
at doubling its consolidate Sales Revenue to INR 70,000M. Driven
by its Project Double, it was able to successfully surpass this target
in fiscal year ending 14. The rural outreach has spanned across
approximately 38000 villages from a lowly 14000 villages in 2009

INCOME STATEMENT
MAR'14

P&L Statement

MAR'13

MAR'12

MAR'11

MAR'10

Net Sales

48700.8

43493.9

37575.4

32806.1

28559.6

Total Expenditure

40443.6

36265

31279.3

26609.7

23251.7

PBIDT (Excl OI)

8257.2

7228.9

6296.1

6196.4

5307.9

Operating Profit

9352.9

8171.2

6847.5

6459.9

5724.3

Profit Before Tax

8613.3

7496.7

5870.3

5962.6

5270.3

6721

5909.8

4632.4

4714.1

4333.3

BASIC

3.85

3.39

2.66

2.71

2.5

DILUTED

3.83

3.37

2.64

2.69

2.49

MAR'13

MAR'12

MAR'11

861.33

749.67

631.92

596.26

527.03

715.21

702.55

520.12

351.54

499.59

-101.41

-343.11

-218.58

-228.82

-259.65

-534.85

-327.77

-232.66

-94.22

-227.87

78.95

31.67

68.88

28.5

12.07

67.39

35.72

192.41

163.91

151.84

143.36

64.59

261.29

192.41

163.91

Profit After Tax

Earnings / share

Accounting Policies
Depreciation on Fixed Assets has been provided on straight
line method
Inventories are valued on the weighted Average Cost method
of accounting to make sure that none of the values are over or
under stated
In 2012, fixed Assets purchased for less than Rs. 5000 were
depreciated at the rate of 100% while in 2013, fixed Assets
purchased for less than 0.05 were depreciated at the rate of
100%. In 2014, fixed assets purchased for less than 0.0005
were depreciated at the rate of 100%.

CASH FLOW STATEMENT

Parameters
Net Profit Before
Taxes
Cash Flow from
operating activities
Cash Flow from
investing activities
Cash Flow from
financing activities
Net cash and cash
equivalents
Opening Cash & Cash
Equivalents
Closing Cash & Cash
Equivalent

MAR'14

Interpretation of Balance sheet & Income statement

MAR'10

Shareholder funds have seen a continuous rise from INR 7494M

to INR 19023M- driven by a substantial growth in the Reserves
& Surplus account
Value of its secured or unsecured loan is close to 0- indicates the
firms strong financial position as they rely on equity and not
liability to finance their assets
Standalone Net Sales for the firm have grown staggeringly from
INR 28559M to INR 48700M
PAT fell for the financial year Mar 12 from INR 4714M to INR
4632M -can be explained from rise in the raw material prices

Interpretation of Financial Statements

Cash Flow from operating activity has always been able to overpower its negative effect
Repayment of Short Term Loans increased from INR 481M to INR 1918M. -not a good sign as company might be holding up the payment to its
creditors for some time
Trade Receivables has increased by INR 524.7M suggesting that the firm has increased its credit sales over the past year
depreciation has increased constantly in sync with the increase in assets, and does not reflect the non-uniform distribution of a Written Down
Value method

Dabur & Competitors

1000
800
600

Other
Income

Profit After
Tax

Operating
Profit

400
200
0

Total
Expenditure

Net Sales

120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%

Net Sales

Daburs liquidity ratios quick (1.73) and current (0.81) stand better to its
competitors of Marico & Godrej -reflects strong cash position
Though companys equity has grown substantially by over 150%, primarily
fuelled by the increases in Reserves & Surplus account, growth for Maricos
and Godrejs equity account has been close to the tune of 250%. Thus
Daburs growth has been slightly sluggish with comparison to the industry
When compared to Marico, we see a stark difference in Daburs NonCurrent Liability account.
The growth in total assets owned by Dabur has been significantly lower
(93%) as compared to Marico (166%) and Godrej (344%). Though Godrejs
increase in assets has in turn substantially increased its liability account,
Dabur still is far behind its other competitor Marico
Daburs FLM has fallen to 1.8 in March 14 which clearly indicates the
managements ideology on focusing growth driven by equity rather than
liability

Total
Expenditure

Operating
Profit
Profit After
Tax

Daburs Performance
Net Sales for Dabur grew by 70% from 10 levels as compared to 80% for
Marico and 220% for Godrej.
Total expenditure for Dabur as a percentage of its revenue (~80%) falls
somewhere in between that of Marico (84%) and Godrej (77%)

80.00%

Total Current
Liabilities

60.00%
40.00%

Total NonCurrent
Liabilities

20.00%

Shareholder's
Funds
Total NonCurrent
Assets

0.00%

5 year average profit margin for Dabur is lower than both Marico and Godrej.
This is possibly because it did not increase its product price in tandem with
the increase in expenses and thus lost out on the margins
Though the profit margins for Dabur is lower than Marico and Godrej, its
EBIDTA as a proportion of its Sales is higher than both the competitors,
indicating that the apparent bottom line is affected a lot by exceptional
income and losses. It can thus be concluded that Dabur has a less volatile
and reliable bottom line as compared to Godrej

Conclusion
Dabur has shown impressive
performance over the past 5years with
consolidated net sales doubling to INR
7,000 Cr. It boasts of a strong liquidity
position with both its current and quick
asset ratios standing at a healthy 1.7
and 0.8 respectively. However, its profit
margins are lower than the major
competitor Godrej. It has tried to improve
upon its leverage with focusing more on
equity financing than liability financing.
According to us, Dabur has been slightly
over-cautious in its approach. It can go
on an aggressive path with more
expansion and portfolio enlargement,
improving its overall margins and ROE

Financial Strengths & Weaknesses

In the last 5 years, Dabur has ensured low debt to equity ratio and
brought it down every year. It is also the lowest among its
competitors ensuring more stability.
In the last 5 years, Dabur has successfully increased its Interest
Coverage Ratio to 45 from 40 and this has been almost double as
compared to its competitor Godrej and Marico
Another of Daburs strength is his efficient employment of its current
assets and over the years course it has ensured marginal increase in
current asset turnover every year
One of the areas of concerns for Dabur are its profitability ratios
which has been constant over the five years (Gross Profit Margin
0.168, Operating Profit 0.190 and Profit Margin 0.136). Though these
are healthy but could be improved.
From an investor point of view, Daburs EPS is lowest among the
three (3.85 as compared to 16.59 of Godrej and 8.95 of Marico), As
company has been able to increase sales consistently and the stock
gave 5 year long term 280% return , company can afford to go for
increasing EPS