Dabur India Share Price

Dabur India Ltd

Dabur India Ltd. is one of India’s leading Fast Moving Consumer Goods (FMCG) companies with a strong presence in the areas of personal care, healthcare, homecare and foods. Headquartered in Ghaziabad, Uttar Pradesh, Dabur was founded in 1884 by Dr. S.K.Burman and has evolved from a small pharmacy to a multi-product corporation selling its products across the globe. Dabur is among the oldest and largest herbal & ayurvedic companies in the world.

Key Facts

• Founded in 1884 in Kolkata
• Headquarters in Ghaziabad, Uttar Pradesh
• Chairman: Amit Burman
• CEO: Mohit Malhotra
• BSE Code: 500096
• NSE Symbol: DABUR
• Market Cap: ₹89,140 Crores
• Products in the categories of Hair Care, Oral Care, Health Care, Skin Care, Home Care, Foods, Ayurvedic Medicines and Natural Health Products.
• Manufacturing units in India and abroad.
• Products sold in over 100 countries
• Employs over 8,000 people worldwide

History and Evolution

Founding Years

Dabur was founded in 1884 by Dr. S.K. Burman, a physician in Bengal, has a small pharmacy in Calcutta. The company derived its name from the Devanagari rendition of Daktar Burman. In the early years, Dabur was involved in producing ayurvedic medicines, flavored sodas and fruit juices.

Expansion in early 1900s

In the 1900s, Dabur expanded operations to Delhi and set up manufacturing units for ayurvedic products. It launched flagship brands like Dabur Amla Hair oil and Dabur Chyawanprash during this period. By 1919, Dabur was serving markets as far as Afghanistan, Nepal and Burma.

Diversification in 1970s

Dabur entered the consumer goods market in the 1970s with the launch of toothpaste, shampoo and soap. This marked the company's transformation into an FMCG firm. Post liberalization in the 1990s, Dabur accelerated new product launches across categories.

Streamlining in the 1990s

The late 1990s saw Dabur streamline operations by merging erstwhile subsidiaries like Dabur Foods and Dabur Pharma with the parent firm. The management control also shifted from the Burman family to professionals leading the company to rapid growth.

Expansion through acquisitions

In the 2000s, Dabur expanded inorganically through strategic acquisitions like Balsara Hygiene, Namaste Labs in the US and Hobi Kozmetik in Turkey. This enabled widening its portfolio and entering new geographies.

Business Model and Revenue Streams

Dabur operates through three main business divisions:

Consumer Care Division

The consumer care division contributes over 80% of Dabur's sales and comprises the following businesses:

• **Hair Care:*8 Dabur Amla, Vatika, Anmol and Dabur Almond
• Oral Care: Dabur Red Toothpaste, Meswak, Babool, Promise and Lal Dant Manjan
• Skin Care: Gulabari, Fem and OxyLife
• Home Care: Odonil, Sanifresh and Air Fresheners
• Foods: Real Fruit Juices, Real Activ Juices, Real Homemade and Capsico

Consumer Health Division

The consumer health division focuses on the ayurvedic and herbal products portfolio with leading brands like Hajmola, Pudin Hara, Honitus and Digestive tablets.

International Business

Dabur has business operations spread across the Middle East, SAARC countries, Africa, Europe, US and Russia. International business accounts for over 25% of total sales.

Manufacturing and Supply Chain

Dabur has over 12 manufacturing units in India and 8 units overseas with state-of-the-art infrastructure for production, quality control, R&D and innovation. The domestic manufacturing locations are in Uttar Pradesh, Himachal Pradesh, Uttarakhand and Rajasthan while the international units are located in Nepal, Bangladesh, Nigeria, Egypt, Turkey and the UAE.

The company has a wide distribution network reaching over 6 million outlets in India through 5000 distributors. The products are also available on e-commerce platforms like Amazon, Flipkart, BigBasket and on Dabur's own online shopping portal.

Financial Performance

FY24 Financial Performance

• Revenue: ₹12,404 crore, up 7.6% from ₹11,530 crore in FY23.
• Net Profit: ₹1,843 crore, a 7.9% increase from ₹1,707 crore in FY23.
• Operating Profit: ₹2,400 crore, with an operating margin of 19.4%.
• Volume Growth: The FMCG business posted a 5.5% volume growth for the year.

Q4 FY24 Highlights

• Revenue: ₹2,815 crore, up 5.1% year-on-year (YoY).
  
• Net Profit: ₹350 crore, a 16.2% YoY increase.
  
• International Business: Achieved constant currency growth of 12% in Q4 and 16.4% for the full year.
  

Key Drivers

• Strong performance across categories like oral care (22% growth), food business (20.6%), and mosquito repellents (7.5%).
  
• Expansion of premium products and increased investments in brand building (+33% YoY).
  
• International markets contributed significantly to growth, with robust performance in key geographies, positively impacting the Dabur India share price.
  

Dividend

The board recommended a final dividend of ₹2.75 per share for FY24.

Dabur's consistent growth reflects its strategic focus on expanding its product portfolio, strengthening its distribution network, and driving operational efficiencies amidst challenging market conditions.

Recent developments

In recent years, Dabur has focused on power brands, entering new segments like spices and scaling up its ayurvedic medicine portfolio. Sustainability has been a key priority with renewable energy investments. The company is also increasing digital initiatives for connecting with younger consumers.

Management Team

Dabur has a professional management team driving the company's growth strategy. It is led by CEO Mr. Mohit Malhotra who took charge in 2019. The other key executives are:

• A K Jain - EVP (Finance) and Company Secretary
  
• Adarsh Sharma - EVP (Sales)
  
• Sameer Satpathy - Chief Human Resource Officer
  
• Dr. S Chandrasekher - Head of Science Based Health Business
  

The Burman family is represented on the board by Chairman Mr. Amit Burman.

SWOT Analysis

Strengths

• Strong brand recognition and trust of Dabur as a herbal products company
  
• Wide distribution reach in urban and rural India
  
• Ayurvedic medicine portfolio specially positioned to tap into growing demand
  
• Strong focus on R&D and product innovation
  
• Strategic acquisitions and alliances to enter new segments
  

Weaknesses

• Dependent on general trade, wholesale and small retailers for a large portion of sales
  
• Prestige personal care brands face competition from mass brands
  
• Pressure on margins due to increased advertising spends and costs
  

Opportunities

• Growing demand for ayurvedic healthcare and herbal products
  
• Increasing penetration in rural markets to fuel growth
  
• Leveraging e-commerce to reach new customers and geographies
  
• New product categories like hand sanitizers, immunity boosters etc.
  

Threats

• Intense competition from major FMCG players
  
• Markets like US and Europe have stringent regulations for herbal products
  
• Currency fluctuations impacting exports and profitability
  
• Commodity price volatility putting pressure on raw material costs
  

Outlook and Future Prospects

Dabur faces some challenges like subdued demand, high inflation and currency fluctuations in the near term. However, the company is well positioned to tap into the long-term growth drivers. Its strong focus on ayurveda, its brand reputation and expanding rural footprint will enable it to outperform the FMCG market. New product innovations, strategic alliances and leveraging technology also offer growth potential. The stock is a good defensive pick for long term investors.