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: Sluggish numbers - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Nov 28, 2001

    Dabur: Sluggish numbers

    Dabur India declared its first half FY02 results yesterday. The company reported a small 3% growth in turnover and a 13% growth in bottomline during this period. Comparing 2QFY02 with the corresponding quarter last year, Dabur managed a 5% growth in turnover and a 10% growth in net profits.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Net Sales 2,990 3,134 4.8% 5,469 5,623 2.8%
    Other Income 52 45 -12.5% 66 61 -6.7%
    Expenditure 2,639 2,778 5.3% 4,941 5,082 2.9%
    Operating Profit (EBDIT) 351 356 1.3% 528 541 2.3%
    Operating Profit Margin (%) 11.7% 11.3%   9.7% 9.6%  
    Interest 104 67 -35.6% 161 120 -25.6%
    Depreciation 55 50 -7.7% 108 103 -3.9%
    Profit before Tax 245 284 16.0% 325 379 16.4%
    Extraordinary items -6 0   -6 0  
    Tax 17 39 137.0% 27 46 74.0%
    Profit after Tax/(Loss) 222 245 10.1% 294 333 13.3%
    Net profit margin (%) 7.4% 7.8%   5.4% 5.9%  
    No. of Shares 28.5 285.2   28.5 285.2  
    Diluted Earnings per share* 3.1 3.4   2.1 2.3  
    P/E Ratio   20.7     30.4  

    The company has stated that the net sales during the six-month period ended September 30, 2001 is not entirely comparable with that of the corresponding period of the previous year. The growth in sales, on like to like basis (excluding some of the businesses such as herbal intermediaries, which have been discontinued) for the period has been 5.9%. The sales growth has been much better in 2QFY02 compared to a miniscule 0.4% sales growth in 1QFY02.

    Despite this the company's sluggish topline growth continues to be a concern. Dabur has meanwhile, concentrated on pruning its debt burden as well as restructuring its business operations. The company's interest burden in 1HFY02 has declined 26% YoY and its depreciation provisioning too has declined marginally by 4%. However, the company has not been able prune its operating expenses, which have grown a shade faster than net sales. This has put pressure on operating margins.

    In the first quarter of FY02 (June quarter), Dabur had clarified that its FMCG business (which accounts for approximately 70% of the total) grew by 5.6% during that 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 may still be the case in this September quarter.

    Dabur's net profit growth in the first half would have been far more encouraging had it not been for increased taxes due to the AS-22 provisions. If we exclude the Rs 17 m deferred tax provision, Dabur's YoY net profit growth stands at over 19%. The Dabur management has decided to pay an interim dividend of Re 0.50 per equity share of Rs 1/- each for FY02 aggregating to Rs 143 m.

    At the current price of Rs 71 the stock trades at 30x its 1HFY02 annualised earnings, which seems on the higher side. With competition from Zandu, Baidyanath and Himalaya Drugs increasing, Dabur's monopoly in ayurvedic products is under pressure. With HLL considering entering this segment Dabur has to gear up its act.



    Equitymaster requests your view! Post a comment on "Dabur: Sluggish numbers". Click here!


    More Views on News

    Marico: Earnings Hit by Lower Volumes and Firming Input Prices (Quarterly Results Update - Detailed)

    Aug 9, 2017

    While GST implementation brought down volumes and profitability in the short run, Marico remains optimistic in the long run.

    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.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    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.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    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 18, 2017 (Close)



    Detailed Quarterly Results With Charts