Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Dabur: Topline concerns - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 26, 2001

    Dabur: Topline concerns

    Dabur India has posted a 23% growth in 1QFY02 net profit to Rs 88 m. This growth in bottomline has come despite a negligible topline growth. Reduction of interest cost by 8% and an 11% jump in other income contributed to the company's bottomline growth.

    (Rs m) 1QFY01 1QFY02 Change
    Net Sales 2,479 2,489 0.4%
    Other Income 14 16 11.1%
    Expenditure 2,302 2,304 0.1%
    Operating Profit (EBDIT) 177 185 4.2%
    Operating Profit Margin (%) 7.2% 7.4%  
    Interest 57 53 -8.0%
    Depreciation 53 53 -0.4%
    Profit before Tax 82 95 16.9%
    Tax 10 7 -27.0%
    Profit after Tax 71.5 88 23.1%
    Net profit margin (%) 2.9% 3.5%  
    Effective tax rate (%) 12.3% 7.7%  
    No. of Shares (eoy) (m) 28.5 285.2  
    Diluted earnings per share 0.3 1.2  
    P/E ratio (excl. extraordinary items)   47.8  

    Dabur is a 115 year old FMCG ‘ayurvedic’ company operating in the niche (natural/ayurvedic) segment with a portfolio of over 500 products. Its core competence lies in its ability to conceive, develop and market products based on herbs and other natural resources. Its products include leading brands like Dabur Chyawanprash, Hajmola, Pudin Hara, Lal Dant Manjan, Amla, Vatika hair oils, Dabur Honey and Real fruit juices.

    Dabur has clarified that its FMCG business (which accounts for approximately 70% of the total) grew by 5.6% during the quarter. It was a slowdown in its ethical business that really affected the overall topline growth. By ethical we mean over the counter (OTC) products like Hajmola and Pudin Hara.

    This performance pales in comparision to the company's performance in the previous quarter (4QFY01) where the company recorded over 16% growth in turnover and a significant 52% growth in bottomline. But the encouraging fact is that Dabur has improved its margins, though only marginally.

    Dabur has made no provision towards diminution in the value of some of its investments, which relate to group/subsidiary companies. The management believes that the total market/break up value of all quoted /unquoted investments exceeds cost.

    At the current price of Rs 59 the stock trades at a P/e of 48 times its annualised 1QFY02 earnings, which seems high especially in these difficult market conditions. Ultimately, Dabur is an FMCG company and so the valuation norms of FMCG companies should apply to it also.



    Equitymaster requests your view! Post a comment on "Dabur: Topline concerns". Click here!


    More Views on News

    GSK Consumer: On the Recovery Path (Quarterly Results Update - Detailed)

    Jun 20, 2017

    While GSK consumer reported muted revenue growth, volumes are seen to be recovering.

    Apex frozen food Ltd. (IPO)

    Aug 21, 2017

    Should you subscribe to the IPO of Apex Frozen Foods Ltd?

    Dabur: Premiumisation Efforts to Keep Competition at Bay? (Quarterly Results Update - Detailed)

    May 4, 2016

    Dabur announced its results for the quarter ended March 2016. The company reported a revenue growth of 11% YoY during the quarter, while profits moved up by 17% YoY.

    Dabur: Moving along... (Quarterly Results Update - Detailed)

    Nov 2, 2015

    Dabur announced its results for the quarter ended September 2015. The company reported a revenue growth of 9% YoY during the quarter, while profits moved up by 19% YoY.

    A Little Gem in the FMCG Sector (Sector Info)

    Jul 18, 2016

    Will investing in Bajaj Corp yield high returns on account of a rural revival in sight?

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 22, 2017 (Close)



    Compare Company With Charts