4QFY2012 Result Update | FMCG

May 3, 2012

Dabur India
Performance Highlights
(` cr) Revenue EBITDA OPM (%) PAT
Source: Company, Angel Research

NEUTRAL
CMP Target Price
4QFY11 1,108 211 19.1 147 % yoy 23.0 1.9 (328)bp 16.0 Angel Est. 1,301 228 17.5 161 % Diff. 4.8 (5.6) (171)bp 5.9

`106 -

4QFY12 1,364 215 15.8 171

Investment Period

Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code FMCG 18,475 0.5 122/92 175,962 1 17,151 5,188 DABU.BO DABUR@IN

For 4QFY2012, Dabur India (Dabur) posted 23% yoy growth in its top-line, driven by a mix of volume and value growth and was slightly ahead of our estimates. The company’s net profit rose by 16.0% yoy to `171cr, aided by robust performance on the top-line front. We recommend Neutral on the stock. Higher input costs lead to margin compression: During 4QFY2012, Dabur’s domestic business growth stood at 19.2% yoy, driven by strong growth in hair oils, home care and food categories. Hobi and Namaste reported healthy top-line growth of 19.5% yoy and 12.4% yoy, respectively. The company reported a 328bp yoy decline in OPM due to increased input costs, high inflation and a rise in ad spends and other expenses. Outlook and valuation: We expect Dabur’s top line to post a ~13.4% CAGR over FY2012–14E, backed by its recent acquisitions. The bottom line is expected to post a 15.2% CAGR, aided by top-line growth and margin expansion. At the CMP, the stock is trading at 21.5x FY2014E EPS. We recommend Neutral on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 68.7 6.5 18.8 6.1

Abs. (%) Sensex DABUR
FY2011 4,077 20.3 569 13.7 18.5 3.3 32.3 13.2 48.9 37.5 4.7 25.4 FY2012E 5,283 29.6 644 13.3 16.4 3.7 28.5 10.9 42.0 29.3 3.6 21.9 FY2013E 5,878 11.3 721 11.9 16.8 4.1 25.4 9.2 39.3 30.2 3.2 19.2 FY2014E 6,799 15.7 855 18.5 17.0 4.9 21.5 7.5 38.6 31.6 2.8 16.4

3m (1.6) 9.4

1yr (7.5) 5.9

3yr 50.4 104.8

Key Financials (Consolidated)
Y/E March (` cr) Net sales % chg Net profit (Adj.) % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

V Srinivasan
022-39357800 Ext: 6831 v.srinivasan@angelbroking.com Amit Patil 022-39357800 Ext: 6503 amit.patil@angelbroking.com

Please refer to important disclosures at the end of this report

1

May 3.8 26.0 31.3 38 18. Items) Extr. respectively.0 147 13.9 15.3 569 13.4 186 13.4 13.9 174 3.0 4QFY11 1.6 38.0 147 0.9 127 11.0 30 95 59 708 708 17.0) 0.5 10.4 139 19.4 28. led by volume growth of 12.2% in 4QFY2012 and FY2012.Dabur India | 4QFY2012 Result Update Exhibit 1: Quarterly performance Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Advertising (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM (%) Interest Depreciation Other Income PBT (excl.5 309 7.0 FY2012 5.303 774 19. In constant currency terms.0 1.0 41 22.5 10.4 54 103 80 790 790 15.1 523 12.8) 645 12.2 174 FY2011 % chg 4.4 13.5 161 14.1 171 0.5 174 1.3 13.5 644 (0.415 868 16.108 521 47.7 23.0 146 18.2 96 7.6 16.364 685 50.9 (64.3 11.7 77.7 Double-digit volume growth in domestic business Dabur posted strong top-line growth of 23% yoy to `1. Items) (% of Sales) Provision for Taxation (% of PBT) PAT (Before Minority) Minority Interest Reported PAT PATM (%) Equity shares (cr) FDEPS (`) Source: Company.3 174 0.5 29.9 4.3 11.4 34.4 9.6 535 13. 2012 2 .938 47.1 16 29 22 188 188 17.9) 16.0 16.364cr on a consolidated basis.8 6 29 28 208 208 15.5 897 211 19.283 2.0 87 7.077 1. Income/(Expense) PBT (incl.5 (8.2 5. International business (excluding acquisitions) grew by 45.685 50.2% in FY2012.6 1. growth of international business excluding acquisitions stood at 35% for 4QFY2012 and 23.0 182 13.3 660 12. Extr. Extr.7 12.5 8.4 25.8 % chg 23.8% and 27. Angel Research 4QFY12 1.6 569 0.148 215 15.4% yoy.7 33.8 387 7.0 171 12.8 3.0 3.6 42.5 683 12.1 30.

0 10.0 15.0 30.0 20.8% due to inflation and higher ad spends. 2012 3 .9 19.000 (`cr) 800 600 400 200 4Q10 2Q11 Top-line (LHS) Exhibit 3: Modest volume growth 40.0 13.0 52.0 30.0 (%) 10.Dabur India | 4QFY2012 Result Update Exhibit 2: Top-line growth 1.0 4Q11 2Q12 4Q12 4Q10 2Q11 4Q11 2Q12 4Q12 yoygrowth (RHS) 25.2 15.0 20.0 5.4 Source: Company.0 5.5 14.1 4Q11 Gross margin 4Q11 2Q12 yoy growth (RHS) 4Q12 2Q12 4Q12 A&P Spends Source: Company.6 10.6 10.3 19.0 30.6 18.200 1.0 40.0 10.1 13. Exhibit 4: Growth in profit 190 170 150 130 (` cr) 110 90 70 50 30 10 4Q10 2Q11 PAT (LHS) Exhibit 5: OPM contracts as ad spends rise 35.0 10. Angel Research Source: Company.0 49.2 13.1 14.7 20.5 12.0 15.0 15.9 51. Net profit grows by 16% yoy Dabur’s reported earnings for the quarter on a consolidated basis registered growth of 16% yoy to `171cr.0 47.5 11.0 20. Angel Research May 3.0 10.5 12.600 1.6 13. Angel Research OPM remains under pressure On the operating front.6 53.0 12.8 19.0 50.0 (yoy %) (%) 20.0 60.0 49.8 10.4 12.0 4Q10 2Q11 OPM 54.0 35.8 50. Angel Research Source: Company.7 50.0 10.0 5.8 12. Dabur reported a margin contraction of 328bp yoy to 15.400 1.4 19.7 8.7 15.1 18.0 (yoy %) 25.0 25. above our estimates.

5 71.5 23.9 9.5 30.4 May 3.2% in 4QFY2012.2 (2.2 8. crossing `100cr in sales Robust growth across all regions and channels Oral Care Health Supplements Digestives & Baby care Skin care 7.6 Home Care Foods Division 18.5 28.2 101.5 International Business Division (excluding acquisitions) Source: Company.8% Toothpastes grew by 8.8 Growth was driven by volume and price hikes.Dabur India | 4QFY2012 Result Update Exhibit 6: 4QFY2012 category-wise growth (Consolidated) Growth (%) Comments Business Division Consumer Care Division Hair Care 14.6) 4.5 21.9 19. with Dabur Amla hair oil and Vatika performing well.1 23.5 (2.3 12.2 25. gaining market share.7 30.0 288 259.8 % chg 23.481 493 21 82 986 897 94 -9 4 24. Also.9 4QFY11 1. driven by price hikes and volume growth.364 1.7 (23.2 20.1 (44.9 25.3 50. Hajmola Tablets reported strong growth due to media initiatives Gulabari sales were tepid on account of low category growth and heightened domestic competition Fem portfolio grew by 20.0 83. Hobi Group recorded `34cr sales and Namaste Group reported sales of `137cr Exhibit 7: Segment-wise performance (Consolidated) Y/E Mar (` cr) Total Net Sales Consumer Care Foods Business Retail Others Total PBIT Consumer Care Foods Business Retail Others PBIT Margin (%) Consumer Care Foods Business Retail Others Source: Company.8 19.108 951 126.283 4. Hair oils grew by robust 20. Dabur Honey and Chyawanprash contributed to the category’s growth.1 22.6% Odonil drove the category’s growth.3%.8 7.8 Constant currency growth stood at 35%. Nigeria.0 30. Dabur Red Toothpowder grew marginally. Angel Research 4QFY12 1.8 8. 2012 4 .5 21. almond hair oil continued to receive good consumer response.9 28.1 19.6 (33.7 10. Shampoo category witnessed revival.7 18.2 (30.3) 2.490 602 42 149 1082 975 111 -12 7 20.6 32.3) FY2012 5. Egypt and GCC grew well.0 108.9) 1.140 161.0 27.4 % chg 29.077 3.4 18.7 18.6) 8.1 6.9) 2. with growth of 16.4 (27. Angel Research 45.4) 4.9 FY2011 4.7 24 265 241.8 18.4 17.9 19.

home care and foods leading growth. Outlook and valuation We expect Dabur’s top line to post a ~13. We model in a 20% CAGR in revenue over FY2011-13E. backed by its recent acquisitions.4% CAGR over FY2012-14E. baby care. Management has stated that integration of Hobi Group and Namaste Group is on track and the company plans to introduce its core products in international markets. the stock is trading at 21.2% CAGR. We recommend Neutral on the stock. based on its ayurvedic/herbal positioning.Dabur India | 4QFY2012 Result Update Investment rationale Niche positioning and acquisitions to drive growth: Dabur’s niche positioning.5x FY2014E EPS. Acquisition rationale: Acquisition of Hobi and Namaste Group provides Dabur entry into an attractive new market. We believe the recent acquisitions will contribute steadily to the company’s top-line growth. with health supplements. May 3. The company’s bottom line is expected to post a 15. 2012 5 . aided by top-line growth and margin expansion. At the CMP. offers it an attractive and unique proposition in terms of product portfolio.

0 8.5 21.9 76.1 18.5 3. Note: denotes CAGR for FY2012-14E.5 73.4 13.3 0.6 13.0 4.4 18.4 (5.2 29.0 2.8 Source: Company.8 15.8 61.047 (3.1 4.0 3. Angel Research FY2013E FY2014E EPS (`) Angel estimates Consensus Diff (%) FY2013E FY2014E 5. Angel Research.457 18.1 18.0 25.2 (5.4 39.2 15.9 FY14E 2.9 1.1 4.1 42.3 8.0 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Apr-12 Exhibit 13: One-yr forward Premium vs.7 22.1 4.0 10.1 120.2 2.707 11.9 5.2 25.3 16.1 27.7 39.8 3.0 36.5 19.9 5.2 129.*December Year Ending Exhibit 9: Angel v/s Consensus estimates Top-line (` cr) Angel estimates Consensus Diff (%) Source: Company.3 29.4 27.8 30.8 2.2 28.5 5.2 18.2 3.4 EV/Sales (x) FY13E 2.4 2.7 16.0 20.6 3.6 8.7 44.652 15.0 22.4 20.9 45.3 84.5) 4.8 RoE (%) FY13E 36.0 15.2 0.5) 6.2 26.4 23.7 33.6 10.638 93.3 17.5 2. Sensex 130% 120% 110% 100% 90% 80% 70% 60% Aug-11 Nov-11 May-11 Mar-12 Dec-11 Feb-12 Apr-11 Jun-11 Jul-11 Sep-11 Oct-11 Apr-12 Jan-12 Exhibit 11: One-year forward P/E band 140 120 Share Price (`) 100 80 60 40 20 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 34x Dec-11 Apr-12 Apr-12 Sensex Dabur 16x 22x 28x Source: Company. Angel Research Source: Company.0 5.3 6.5 1.Dabur India | 4QFY2012 Result Update Exhibit 8: Peer valuation Company Asian Paints Britannia Colgate Dabur India Godrej Con GSK Con* HUL ITC Marico Nestle* TGBL Reco.340 11.0 25.3 19.462 7.0 25. Angel Research Exhibit 12: One yr forward P/E chart 35.272 # CMP (`) 3601 557 1127 106 567 2767 434 242 179 4611 118 TP (`) 650 136 Upside (%) 17 16 P/E (x) FY13E 29.1 13.329 18.799 7.5 12.9 33.4 23.0 31.0 35. Angel Research Source: Company.2 CAGR # Sales 19.9 FY14E 34.3 17.878 6.9 15.1 28.091 (3. Neutral Buy Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Buy Mcap (` cr) 34.540 6. Angel Research May 3.3 31.5 FY14E 24.7 PAT 17.001 44.5) Exhibit 10: Absolute returns of Dabur vs. Sensex chart 120% 100% 80% 60% 40% 20% 0% -20% Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Source: Company.8 25.8) 4.6 28.3 34.0 30. 2012 6 .7 17.4 24.701 188.

4 13.3 15.323 1.8) 644 644 13.878 11.5 643 (0.7 13.7 890 169 19.1 17.3 3.687 660 387 681 867 14.1 1.2 FY10 3.7 445 54 12.6 56 573 36.761 1.0 721 (0.5 2.3 13.4 FY12 5.5 May 3.891 2.799 15.1 4.055 18.8 49 421 14.9 51 67 9.8) 499 501 28.4 103 764 13.874 764 464 788 987 13.6 4.8 112 875 14.9 28. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY09 2.9 3.643 3.9 16.3 4.3 3.9 18.8) 722 722 12.5 FY13E 5. 2012 7 .9 FY14E 6.0 18.0 790 11.1 14.9 4.6 569 0.4) 391 391 17.376 343 235 381 470 14.5 54 80 8.551 493 285 432 629 33.3 569 569 13.5 708 17.9 2.5 14.8 708 139 19.5 16.1 12.8 2.Dabur India | 4QFY2012 Result Update Profit and loss statement (Consolidated) Y/E March (` cr) Total operating income % chg Total Expenditure Cost of Materials Advertising Exp Personnel Others EBITDA % chg (% of Net Sales) Depreciation& Amortization EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Share in profit of Associates Recurring PBT % chg Extraordinary Expense/(Inc.0 23 47 10.5 1.3 12.2 13.335 1.5 14.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of associates Less: Minority interest (MI) PAT after MI (reported) ADJ.2 17.5 30 65 10.055 200 19.1 2 599 100 16.1 391 (0.8) 855 855 18.7 5.5 12.8 16.282 29.9 4.7 18.308 884 537 914 1.077 20.7 3.1 11.1 FY11 4.0 16.3 4.0 854 (0.6 4.415 2.1 50 78 10.9 20 48 8.2 890 12.5 82 673 17.905 535 322 561 755 20.2 3.7 15.6 790 146 18.7 498 (0.156 17.9 16.805 18.8 5.026 17.8 601 35.0 130 1.390 20.8 2.5 445 15.

817 1.274 1.060 87 848 935 4 179 11 1.035 3.035 174 2.853 272 516 1.567 414 680 1.Dabur India | 4QFY2012 Result Update Balance sheet (Consolidated) Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders’ Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc.504 1.438 4 991 19 3.452 FY09 FY10 FY11 FY12E FY13E FY14E May 3.652 440 12 2.672 651 2.060 986 339 647 30 264 1.129 1. 2012 8 .465 2.264 2.752 174 1.092 419 528 1.051 19 2.752 2.391 4 1.064 1. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Misc Exp Total Assets 799 299 500 59 347 951 148 249 553 805 146 9 1.090 780 2.129 174 1.499 43 427 1.310 77 577 2.106 192 367 546 920 186 3 1.322 460 588 1.465 174 1.458 395 101 2.678 4 1.217 1.145 1.021 19 3.934 435 1.473 2.452 87 732 819 5 230 7 1.991 4 1.402 538 1.091 476 12 3.051 19 2.863 458 12 3.863 60 377 2.021 67 477 2.

/(Dec. Tax) Interest / Dividend (Net) Cash Flow from Financing Inc. in Fixed Assets (Inc.055 130 (78) 50 200 13 969 (429) (100) (529) (30) 407 50 (487) (46) 460 414 May 3.)/ Dec.)/ Dec.Dabur India | 4QFY2012 Result Update Cash flow statement (Consolidated) Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Interest / Dividend (Net) Direct taxes paid Others Cash Flow from Operations (Inc.) in loans Dividend Paid (Incl.124) 872 233 10 629 80 192 272 FY12E 791 103 133 54 146 57 991 (485) 50 (435) 356 54 (410) 146 272 419 FY13E 890 112 (30) 51 169 52 907 (277) (100) (377) (30) 407 51 (488) 42 419 460 FY14E 1.) in Cash Opening Cash balances Closing Cash balances FY09 445 49 (95) 23 54 (29) 340 (129) (122) (251) 5 131 130 23 (17) 72 77 148 FY10 601 56 (48) 12 100 (11) 510 (134) (104) (238) (14) (51) 151 12 (228) 44 148 192 FY11 708 82 (135) 10 139 50 576 (961) (163) (1. in Investments Cash Flow from Investing Issue of Equity Inc. 2012 9 ./(Dec.

9 6.5 42.8 3.9 1.7 1.7 11.2 21.0 9.6 4.2 8.4 29.9 FY09 FY10 FY11 FY12E FY13E FY14E May 3.5 5.7 6.1 37.9 25.4 54.1 4.3 3.7 9.5 1.6 21.8 2.8 1.2 16.9 4.7 25.5 42.0 11.4 6.3 51.2 6.2 17.0 14.4 7.9 5.8 28.9 29.9 6.5 49 23 60 (0) 3.7 7.1 4.9 3.0 10.8 16.4 22. 2012 10 .3 27.7 3.2 49 30 63 1 47.5 18.2 1.4 52.3 1.3 32.2 49 30 63 (0) 2.6 39.5 9.4 46 13 50 (1) 2.3 27.6 16.2 1.5 34.2 28.8 9.3 29.3 3.2 13.0 4.6 10.1 63 32 64 11 2.1 1.3 28.0 30.7 4.2 49 30 63 1 2.9 39.6 48.Dabur India | 4QFY2012 Result Update Key ratios (Consolidated) Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Returns (%) RoCE Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover Inventory / Sales (days) Receivables (days) Payables (days) Net Working capital (days) 3.5 2.4 2.9 5.1 1.4 36.8 2.9 2.2 5.0 3.5 24.7 3.4 4.7 2.2 19.9 20.0 46.2 47.6 57.1 4.

contents or data contained within this document. Broking relationship with company covered Dabur India No No No No Note: We have not considered any Exposure below ` 1 lakh for Angel. to the accuracy. compliance. its proprietary trading and investment businesses may.com DISCLAIMER This document is solely for the personal information of the recipient. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. 2012 11 . nor make any representation or warranty. internal data and other reliable sources believed to be true. or other reasons that prevent us from doing so. outstanding positions and trading volume. as such. This document is being supplied to you solely for your information. and must not be singularly used as the basis of any investment decision. Angel Broking Limited has not independently verified all the information contained within this document. employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. from time to time. and the company may or may not subscribe to all the views expressed within. as this document is for general guidance only. directly or indirectly. and its contents. Neither Angel Broking Limited. as opposed to focusing on a company's fundamentals and. Nothing in this document should be construed as investment or financial advice. may not match with a report on a company's fundamentals. its Group companies and Directors Ratings (Returns): Buy (> 15%) Reduce (-5% to 15%) Accumulate (5% to 15%) Sell (< -15%) Neutral (-5 to 5%) May 3. nor its directors. but we do not represent that it is accurate or complete and it should not be relied on as such.39357800 E-mail: research@angelbroking.Dabur India | 4QFY2012 Result Update Research Team Tel: 022 . While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material. Accordingly. information or data may not be reproduced. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved). redistributed or passed on. there may be regulatory. directors. investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance. express or implied. The information in this document has been printed on the basis of publicly available information. Analyst ownership of the stock 2.com Website: www. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report. we cannot testify. Also. Angel Broking Limited. Angel and its Group companies' Directors ownership of the stock 4.angelbroking. and should consult their own advisors to determine the merits and risks of such an investment. The views contained in this document are those of the analyst. Disclosure of Interest Statement 1. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel and its Group companies ownership of the stock 3. Reports based on technical and derivative analysis center on studying charts of a stock's price movement. make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. as on the date of this report or in the past. its affiliates.

Sign up to vote on this title
UsefulNot useful