RESULTS REVIEW 3QFY20 31 JAN 2020

Dabur India
BUY
Outperformance continues INDUSTRY
CMP (as on 30 Jan 2020)
FMCG
Rs 479
Dabur posted healthy 5.6% domestic volume growth (est 5%) Distribution expansion and (3) High share of power brands. Target Price Rs 510
despite weak consumer sentiments in rural India. Focused Foods continued to decline led by downtrading in beverages
strategy on power brands, innovative launches and increase (aerated drinks and dairy beverages vs. juices). Diwali gift Nifty 12,036
in rural reach is driving share gains. Rural growth outpaced packs were also impacted by the shift in Diwali this year Sensex 40,914
urban by 400bps for Dabur (in contrast to industry). Oral care (from Nov-18 to Oct-19). Ex-Diwali Gift Packs, Juices grew KEY STOCK DATA
growth at 8.5% was much better than category growth and by 5%. Dabur is now entering PET bottles to spur out-of-
market leader (Colgate posted 4%). Health Supplements and home consumption for juices and drinks. Co is also Bloomberg DABUR IN
Digestive also posted healthy 12% and 16% growth. Food expanding number of SKUs and launching premium juices No. of Shares (mn) 1,767
remained muted due to category issue, will be keen to watch (Real Aloe Vera with Kiwi). MCap (Rs bn) / ($ mn) 846/11,832
performance in upcoming season. Despite near term  International business grew by 11.7% (12% cc growth) 6m avg traded value (Rs mn) 819
headwinds, we believe Dabur will outperform peers owing to owing to robust growth in Hobi (32%) and Nepal (21%).
(1) Focus on power brands, (2) Expanding addressable Management remains confident to deliver mid-high single STOCK PERFORMANCE (%)
market, (3) Healthy growth in natural category, (4) Rising digit revenue growth. 52 Week high / low Rs 506/357
distribution reach and (5) Innovative launches. We value  GM expanded by 80bps owing to benign commodity 3M 6M 12M
Dabur at 40x on Dec-21E EPS, arriving at a TP of Rs 510. inflation and richer mix. Employee/A&P/Other expenses
Maintain BUY. grew by 3/14/7%. EBITDA grew by 11% and EBITDAM Absolute (%) 4.0 13.2 11.0
HIGHLIGHTS OF THE QUARTER expanded by 70bps to 20.9% (in-line). APAT grew by 13% to Relative (%) 1.8 3.8 (3.9)
 Domestic revenue/volume growth was in-line at 6/6% Rs 4.14bn vs. exp of Rs 4.08bn. SHAREHOLDING PATTERN (%)
despite heavy base (15/12% in 3QFY19, 5/5% in 2QFY20). STANCE
Dabur’s rural growth outpaced urban growth by 440bps Dabur has outperformed in a tough environment as its brand Sep-19 Dec-19
owing to distribution expansion and corrective strategies. building initiatives are beginning to pay dividends. Mohit Promoters 67.88 67.88
 HPC/Health Care/Foods grew at 4/11/2%. Dabur gained Malhotra is focusing on (a) Scaling power brands (8 brands FIs & Local MFs 7.74 7.71
healthy market share in categories like Oral care/Hair with 65% revenue mix) which have a large addressable
oil/Juices by 80/50/530bps respectively. Health care opportunity, (b) Deeper rural penetration led by higher direct FPIs 17.64 17.48
portfolio (41% mix) drove overall growth led by (1) Market reach (targeting 55k/60k villages in FY20/21) and (c) Public & Others 6.74 6.93
share gains in Chyawanprash (>300bps) and Glucose Innovation of new products. We remain optimistic for Dabur Pledged Shares 0.00 0.00
(>100bps), (2) Strong 16% growth in digestive and (3) and expect co will be opportunistic in the rural recovery.
Source : BSE
Financial Summary
YE March (Rs mn) 3QFY20 3QFY19 YoY (%) 2QFY20 QoQ (%) FY18 FY19 FY20E FY21E FY22E
Net Revenues 23,530 21,992 7.0 22,120 6.4 77,219 85,331 91,456 102,175 114,672
EBITDA 4,929 4,454 10.7 4,895 0.7 16,174 17,396 19,619 23,038 26,871 Naveen Trivedi
APAT 4,138 3,661 13.0 4,346 (4.8) 13,663 14,436 15,756 20,032 23,175 naveen.trivedi@hdfcsec.com
Diluted EPS (Rs) 2.34 2.07 13.0 2.46 (4.8) 7.76 8.20 8.92 11.34 13.12 +91-22-6171-7324
P/E (x) 61.7 58.4 53.7 42.2 36.5
EV / EBITDA (x) 50.6 47.0 41.7 35.2 30.0 Aditya Sane
Core RoCE (%) 47.3 50.1 52.4 59.3 65.5 aditya.sane@hdfcsec.com
Source: Company, HDFC sec Inst Research +91-22-6171-7336

HDFC securities Institutional Research is also available on Bloomberg ERH HDF <GO>& Thomson Reuters
 DABUR INDIA: RESULTS REVIEW 3QFY20

Dabur India Quarterly Commentary

4QFY19 1QFY20 2QFY20 3QFY20
Industry / Co - Agrarian stress and liquidity crunch led - Demand was sluggish and the industry - Demand remains under pressure. - No indicators of a revival in demand are visible for
Strategy to a general slowdown in the economy growth witnessed a slowdown in both - Volumes in Hair, Oral and Skin care saw near term
- Home Care market surged ahead of the urban and rural markets growth falling off to flat or into negative - Liquidity pressure in channels continues
company growth - Juice category saw a slowdown due to territory. - Co is working towards improving direct reach to
- Juices market saw a decline owing to increased competitive intensity by milk - Juice consumption saw a sharp reduce dependency on wholesale channel.
weak sentiments and downtrading based players slowdown, but penetration is low and Consolidation of distributors will enable them to take
- 70% of industry will get impacted by the room for growth is huge. advantage of scale and offer more discounts
new red dot (high sugar content) in the - Rural is outpacing urban mkt by 400bps
packaging regulations by FSSAI
Revenues
Healthcare - Gained back entire mkt sh loss to - Showed strong performance led by new - Overall business stayed resilient, Glucose - Focus on power brands has helped drive growth
Patanjali in Honey variants, distribution expansion and and Chyawanprash saw robust growth - Co saw mkt share gain across categories like
- Seeing some pressure from smaller focused marketing - Reliance on wholesale continues, but Chywanprash, Digestive and Glucose
players like Apis and Hitkari - Investments will be restricted to Pudin efforts under way to expand direct reach - Lower competitive intensity allowed the co to take
- Taking steps through sales promotion Hara, Honitus and Lal Tail which have marginal price hikes
to counter that performed exceedingly well - Total ayurvedic market Rs 30-40bn. Dabur is very
low in terms of mkt share. Branded ethical market
share is 20-25%, but some regional players have
higher market share. RTM so far for ayurvedic has
been ayurvedic outlets. Now co is tying up with
doctors and regular chemists to drive growth in
ayurvedic

HPC - Co made mkt sh gains in shampoos - Vertical posted a strong growth - Dabur grew ahead of the categories in - Oral care growth was seen across brands.
- Red Franchise continued to perform - The co was able to gain mkt sh in the hair HPC and gained mkt sh across all segments Downtrading was witnessed within low cost
well, but Babool remained under oils segment toothpaste units but not between brands
pressure - Oral care performed very well and gained - Meswak returned to a growth trajectory
- Odonil and Sanifresh drove HC's mkt sh due to increased penetration and - Dabur is working on reimaging Babool as ayurvedic
performance, delivering strong results aggressive marketing rather than a low price brand
- However, Co saw a decline in mkt sh in - Restarted investment in tooth powder, wants to
HC take share from leader (Rs 5bn category)
- Dabur Amla Hair oil mkt share grew 50bps. 80% of
Dabur's hair oil portfolio is perfume oil. Co has lost
mkt share to low price players in some segments over
the few years. Presence in coconut oil is low and co
could gain mkt share
- Shampoo saw 60bps mkt share gain to 5.6%
- Odomos gained 250bps in mkt share

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 DABUR INDIA: RESULTS REVIEW 3QFY20

4QFY19 1QFY20 2QFY20 3QFY20

Foods - Despite the segment witnessing weak - Launched Juice alternatives with reduced - Focusing on launching differentiated - Beverages impacted by downtrading in the category
performance, Real Juice continued to sugar content products in J&N with low or no sugar. Saw (juices to low priced aerated drinks and dairy
gain mkt sh - Also launched Real Koolerz Mango at the significant gain in mkt sh beverage)
Rs 10 price point - Have entered drinks segment and - Introduced Real Aloe Vera Juice (@Rs 110) in the
launched PET bottle at Rs 10 price point premium segment
- Real gained 530 bps in mkt share to 62.4%
- Co is entering PET bottles to spur out-of-home
consumption
- Honey marginally declined. Smaller players have
been chipping away at the mkt share
Margins
Gross Margins - Inflation in RM has been benign and - Volume growth is compensating for - Benign raw material and commodity - Agri inflation was high but crude based derivatives
has been set off by price hikes reduction in absolute gross margins due to prices provided support to margins saw deflation. It leads to GM expansion besides
aggressive promotions favourable base
- Don’t expect inflationary pressure going
forward

Profitability - Growth was lower than prev Q due to - International business showed signs of - VCTS in Nepal and infiltration issues in - EBITDA margin in the International business grew
prolonged winter recovery with encouraging constant Bangladesh negatively impacted constant 100bps
- Don’t intend to take margins forward. currency growth. Should see minor currency growth. - Cost operating initiatives by the co helped improve
Looking to keep it stable. Growth will improvement over the next year - Operating margin saw an improvement, EBITDA margins
come from premiumisation - Overall operating margin saw an partly on account IndAS 116 changes - Co is looking to maintain margins. Savings or margin
improvement, increasing by 157bps - Exceptional provision of Rs 400mn made expansion will be reinvested behind brands
for impairment of investments

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 DABUR INDIA: RESULTS REVIEW 3QFY20

Domestic business grew by 6% Quarterly Financials

(exp. of 6%) driven by 6% Year to March (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%)
volume growth Net Revenue 23,530 21,992 7.0 22,120 6.4 68,382 64,049 6.8
Material Expenses 11,745 11,153 5.3 10,885 7.9 34,106 32,397 5.3
International biz posted robust Employee Expenses 2,448 2,376 3.0 2,415 1.3 7,177 6,960 3.1
growth of 11.7% contributing to Advertisement and Publicity 2,035 1,781 14.3 1,442 41.1 5,498 5,106 7.7
overall growth Other Operating Expenses 2,374 2,229 6.5 2,482 (4.4) 7,201 6,762 6.5
EBITDA 4,929 4,454 10.7 4,895 0.7 14,401 12,823 12.3
Consolidated GM expanded by Depreciation 544 449 21.3 545 (0.1) 1,616 1,307 23.7
80bps owing to benign EBIT 4,385 4,005 9.5 4,351 0.8 12,785 11,517 11.0
commodity inflation and richer Other Income 745 753 (1.0) 818 (9.0) 2,295 2,301 (0.3)
mix Interest Cost 105 167 (37.3) 152 (31.2) 410 472 (13.1)
PBT before exceptional 5,025 4,591 9.5 5,016 0.2 14,670 13,346 9.9
Exceptional item of Rs 200mn Exceptional (200) - na (400) na (800) - na
was on account of provision for PBT 4,823 4,596 5.0 4,618 4.4 13,874 13,356 3.9
impairment in treasury Tax 835 924 (9.6) 582 43.5 2,211 2,608 (15.2)
investment (due to rating PAT before minority interest 3,989 3,672 8.6 4,036 (1.2) 11,663 10,748 8.5
Minority Interest 10.6 11.6 (8.6) 10.6 - 31.8 28.6 11.2
downgrade and default in
PAT 3,978 3,661 8.7 4,026 (1.2) 11,631 10,719 8.5
repayment)
Adjustment 160 - na 320 na 644 - na
APAT 4,138 3,661 13.0 4,346 (4.8) 12,276 10,719 14.5
Employee/A&P/Other expenses
grew by 3/4/7%. EBITDAM
Margin (% of sales) Q3FY20 Q3FY19 YoY (bps) Q2FY20 QoQ (bps) 9MFY20 9MFY19 YoY (bps)
expanded by 70bps to 20.9%
Material Expenses 49.9 50.7 (80) 49.2 70 49.9 50.6 (71)
(in-line).
Employee Expenses 10.4 10.8 (40) 10.9 (52) 10.5 10.9 (37)
ASP Expenses 8.6 8.1 55 6.5 213 8.0 8.0 7
Other Operating Expenses 10.1 10.1 (4) 11.2 (113) 10.5 10.6 (3)
EBITDA 20.9 20.3 70 22.1 (118) 21.1 20.0 104
Tax Rate 17.3 20.1 (279) 12.6 471 15.9 19.5 (360)
APAT Margin 17.6 16.6 94 19.6 (206) 18.0 16.7 122
Source: Company, HDFC sec Inst Research *like-like growth

Page | 4
 DABUR INDIA: RESULTS REVIEW 3QFY20

Quarterly Segmental
Consumer care business Year to March (Rsmn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%)
contributed to Dabur’s overall Segmental Revenues
growth but Foods continued to Consumer Care Business 20,614 19,116 7.8 18,847 9.4 57,906 53,443 8.4
Foods 2,289 2,266 1.0 2,671 (14.3) 8,623 8,795 (2.0)
be a drag
Retails 346 342 1.1 292 18.6 962 929 3.5
Others 217 214 1.2 246 (11.8) 699 679 3.0
Unallocated other operating revenue 64 54 18.7 64 0.2 192 202 (5.1)
Total 23,529 21,992 7.0 22,120 6.4 68,382 64,049 6.8
Segmental EBIT
Consumer Care Business 5,001 4,647 7.6 5,008 (0.1) 14,345 12,962 10.7
Foods 253 296 (14.7) 366 (30.9) 1,163 1,301 (10.6)
Retails (2) 13 (111.3) (2) (6.3) 4 32 (89.1)
Others 18 17 3.5 17 6.0 51 60 (13.6)
Total 5,270 4,973 6.0 5,389 (2.2) 15,562 14,354 8.4
Less:
(a) Interest Cost & Bank Charges 105 167 (37.3) 152 (31.2) 410 472 (13.1)
(b) Other Un-allocable Expenses 140 216 (35.1) 220 (36.5) 482 537 (10.1)
PBT 5,025 4,591 9.5 5,016 0.2 14,670 13,346 9.9
Capital Employed
Consumer Care Business 25,737 23,190 11.0 25,761 (0.1) 25,737 23,190 11.0
Foods 4,725 3,488 35.5 4,411 7.1 4,725 3,488 35.5
Retails 259 308 (16.0) 282 (8.1) 259 308 (16.0)
Others 355 342 3.9 280 26.7 355 342 3.9
Total 31,076 27,327 13.7 30,733 1.1 31,076 27,327 13.7
Unallocable Capital Employed 32,038 25,399 26.1 31,120 3.0 32,038 25,399 26.1
Total Capital Employed 63,114 52,727 19.7 61,853 2.0 63,114 52,727 19.7
Source: Company, HDFC sec Inst Research

EBIT margins contracted across EBIT Margin

Year to March (Rsmn) Q3FY20 Q3FY19 YoY (bps) Q2FY20 QoQ (bps) 9MFY20 9MFY19 YoY (bps)
the board owing to higher
Consumer Care Business 24.3 24.3 (5) 26.6 (231) 24.8 24.3 52
investment behind brands by
the co Foods 11.0 13.1 (203) 13.7 (265) 13.5 14.8 (131)
Retails (0.4) 3.9 (432) (0.5) 11 0.4 3.4 (308)
Others 8.2 8.0 18 6.8 137 7.4 8.8 (141)
Total 22.4 22.6 (22) 24.4 (197) 22.8 22.4 35
Source: Company, HDFC sec Inst Research

Page | 5
 DABUR INDIA: RESULTS REVIEW 3QFY20

Revenue Contribution (3QFY20) Revenue Contribution (FY19)

(%) (%)
Others Others
2.8 2.3

Domestic
70.2

International Domestic
26.1 71.1 International
27.4

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Revenue growth Domestic Value and Volume Growth Trajectory

(%) Domestic International (%) Value growth Volume growth
International performance has 28 26.0 24
24 21
recovered from the pain in 18
15 18
FY18. Co remains committed to 16 11 12 12 17.0 15
11 11 13 11
deliver mid-high single digit 6
10 99
6 6 5 6 10 10
12
10
3 2 8 98
growth 2 2 7
6 7
4 1 1 8.0 4 5 4 55 6
2 2
1 1
(8) 0 (5) -1.0
Dabur has outperformed the (7)(6) (6)
industry with overall volume (11)
(20) (15) (5) (5)(4)
(20) -10.0 (7)
growth and a moderated base
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20

1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
will see further growth in
upcoming quarters
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Page | 6
 DABUR INDIA: RESULTS REVIEW 3QFY20

Dabur’s oral portfolio Domestic Revenue Mix (FY18) Domestic Revenue Mix (FY19)
continues to gain scale aided (%) Digestives (%)
Digestives
6
by the return to growth in Skin Care 6 Skin Care
5 Hair Care
Meswak and Babool 5 Hair Care
22
Home Care 21 Home Care
7 7

Health supplements growth OTC & OTC &

Ethicals
has recovered owing to decline Ethicals
9 Health
9 Health
in competitive intensity from Supplement
Supplement
19
Patanjali 17
Oral Care Oral Care
17 16
Foods Foods
18 16

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Page | 7
 DABUR INDIA: RESULTS REVIEW 3QFY20

Health supplements and Domestic Category Growth (YoY)

Digestives has driven overall YoY Growth Wt. Avg.
Categories
1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 FY17 FY18 FY19
growth in 3QFY20
Hair Care -11% 2% 17% 9% 19% 11% 24% 3% 12% 3% 1% -6% 4% 14%
Oral Care 2% 23% 23% 11% 17% 4% 10% 8% 11% 4% 9% 4% 15% 10%
Continued market share gains Foods -8% 12% 0% 2% 27% 2% 12% -7% 2% -5% -2% 18% 1% 8%
in Toothpaste is heartening Health Supplements -7% 3% 20% 14% 28% 12% 14% 10% 20% 14% 12% -5% 10% 16%
Home Care 6% 10% 36% 0% 17% 11% 9% 16% 11% 7% 3% 6% 14% 13%
Juice portfolio is the key pain OTC & Ethicals -7% 6% 9% 9% 13% 10% 18% 15% 14% 4% 4% -8% 5% 14%
point for Dabur Digestives 4% 12% 19% 7% 22% 11% 23% 12% 18% 10% 16% -8% 10% 17%
Skin Care 4% 16% 15% 9% 27% 12% 19% 11% 12% 1% 0% -2% 11% 17%
Source: Company, HDFC sec Inst Research
Hair oil category growth has
moderated amidst weak
consumer sentiments. Dabur
continues to gain market share

Page | 8
 DABUR INDIA: RESULTS REVIEW 3QFY20

Assumptions
Particulars FY18 FY19 FY20E FY21E FY22E
Domestic Gr. (%) 5.2 11.2 6.6 11.4 12.6
Hair Care Gr. (%) 4.2 13.8 5.7 9.5 9.0
Oral Care Gr. (%) 16.9 9.7 (0.1) 11.3 12.0
Health Supplements Gr. (%) 10.3 14.8 12.9 14.0 15.0
OTC & Ethicals Gr. (%) 5.2 14.1 6.7 14.7 15.5
Digestive Gr. (%) 10.4 16.6 11.2 14.2 15.5
Home Care Gr. (%) 14.2 13.0 6.7 14.3 15.0
Skin Care Gr. (%) 11.1 17.4 1.6 14.9 15.0
Foods Gr. (%) 1.5 9.4 (5.9) 9.3 10.0
International Gr. (%) (6.3) 6.6 5.4 12.0 11.0
Consolidated Revenue Gr. (%) 6.9 10.5 7.2 11.7 12.2
Gross Margin (%) 50.5 49.5 50.3 51.1 51.3
ASP (% of sales) 7.9 7.1 7.3 7.2 7.1
Distribution (% of sales) 2.5 2.6 2.6 2.6 2.6
Employee (% of sales) 10.3 11.0 10.6 10.4 10.1
Other Expenses (% of sales) 9.0 8.4 8.8 8.3 8.1
EBITDA Margin (%) 20.9 20.4 21.0 22.5 23.4
Tax Rate (%) 19.8 16.2 18.0 18.0 20.0
Source: HDFC sec Inst Research

Change in Estimate
FY20E FY21E FY22E
New Old Change New Old Change New Old Change
Net Revenue 91,456 91,871 -0.5% 102,175 103,014 -0.8% 114,672 115,900 -1.1%
EBITDA 19,619 19,930 -1.6% 23,038 23,311 -1.2% 26,871 27,142 -1.0%
EBITDA (adj) 19,239 19,550 -1.6% 23,038 23,311 -1.2% 26,871 27,142 -1.0%
APAT 15,756 16,176 -2.6% 20,032 20,174 -0.7% 23,175 23,433 -1.1%
EPS 8.9 9.2 -2.6% 11.3 11.4 -0.7% 13.1 13.3 -1.1%
Source: HDFC sec Inst Research

Page | 9
 DABUR INDIA: RESULTS REVIEW 3QFY20

Peer Set Comparison

MCap EPS (Rs) P/E (x) EV/EBITDA (x) Core RoCE (%)
CMP TP
Company (Rs Reco.
(Rs) (Rs) FY20E FY21E FY22E FY20E FY21E FY22E FY20E FY21E FY22E FY20E FY21E FY22E
bn)
HUL 4,391 2,058 NEU 2,021 33.8 41.3 46.1 60.9 49.8 44.6 42.2 34.9 31.1 37.5 27.5 31.6
ITC 2,607 234 BUY 366 12.9 13.8 15.2 18.2 16.9 15.4 12.8 11.5 10.1 46.1 48.6 51.5
Nestle 1,487 15,548 NR 13,842 233.3 277.4 317.7 66.6 56.1 48.9 46.0 39.4 34.2 112.2 128.8 162.2
Dabur 846 479 BUY 510 8.9 11.4 13.3 53.5 41.9 36.0 41.5 34.8 29.5 52.6 60.1 66.7
Britannia 771 3,211 BUY 3,678 58.9 70.8 85.4 54.5 45.3 37.6 39.8 32.8 27.2 42.7 48.7 55.3
Marico 436 338 NEU 373 8.2 9.6 11.2 41.4 35.2 30.1 29.3 25.7 22.7 44.4 49.8 55.2
United Spirits 461 635 BUY 759 12.3 16.1 19.2 51.4 39.5 33.1 29.8 25.3 21.6 18.3 21.7 23.8
Colgate 380 1,396 NEU 1,392 30.4 35.5 41.3 45.9 39.3 33.8 29.2 25.5 22.3 70.8 81.0 94.9
Jubilant Food 242 1,832 BUY 2,178 31.6 40.0 49.8 58.1 45.8 36.8 35.8 28.3 22.9 33.5 24.2 31.7
Emami 140 300 BUY 463 12.5 14.1 15.9 23.9 21.4 18.9 17.3 15.5 13.7 25.6 30.6 38.0
Radico Khaitan 53 400 BUY 527 16.4 21.4 24.8 24.3 18.7 16.1 14.7 11.9 10.2 15.1 15.5 16.7
Source: HDFC sec Inst Research

Page | 10
 DABUR INDIA: RESULTS REVIEW 3QFY20

Income Statement Balance Sheet

(Rs mn) FY18 FY19 FY20E FY21E FY22E (Rs mn) FY18 FY19 FY20E FY21E FY22E
Net Revenues 77,219 85,331 91,456 102,175 114,672 SOURCES OF FUNDS
Growth (%) 6.9 10.5 7.2 11.7 12.2 Share Capital - Equity 1,762 1,762 1,767 1,767 1,767
Material Expenses 38,199 43,090 45,459 50,004 55,862 Reserves 55,304 56,467 63,729 73,111 81,374
Employee Expense 7,928 9,379 9,668 10,609 11,564 Total Shareholders Funds 57,065 58,229 65,496 74,878 83,141
A&P Expense 6,067 6,083 6,671 7,375 8,113 Minority Interest 265 314 276 233 191
Distribution Expense 1,914 2,201 2,359 2,635 2,957 Long Term Debt 3,686 306 206 106 6
Other Expenses 6,936 7,182 7,680 8,513 9,306 Short Term Debt 5,766 5,266 4,466 2,966 1,466
EBITDA 16,174 17,396 19,619 23,038 26,871 Total Debt 9,452 5,572 4,672 3,072 1,472
EBITDA Growth (%) 7.2 7.6 12.8 17.4 16.6 Net Deferred Taxes 1,091 1,091 1,091 1,091 1,091
EBITDA Margin (%) 20.9 20.4 21.5 22.5 23.4 Other Non-current Liabilities
565 595 655 720 792
Adj EBITDA 16,174 17,396 19,239 23,038 26,871 &Provns
Adj EBITDA Growth (%) 7.2 7.6 10.6 19.7 16.6 TOTAL SOURCES OF FUNDS 68,438 65,801 72,189 79,994 86,687
Adj EBITDA Margin (%) 20.9 20.4 21.0 22.5 23.4 APPLICATION OF FUNDS
Depreciation 1,622 1,769 2,261 2,412 2,562 Net Block 20,281 20,219 20,957 21,046 20,983
EBIT 14,552 15,627 17,358 20,626 24,309 CWIP 522 756 767 780 795
Other Income (Including EO Other Non Current Assets 490 954 1,049 1,154 1,270
3,052 2,962 3,287 4,187 4,979
Items) Total Non-current Assets 21,293 21,929 22,774 22,980 23,048
Interest 531 596 583 332 266 Inventories 12,562 13,005 13,700 15,048 16,728
PBT 16,928 17,239 19,262 24,481 29,022 Debtors 7,061 8,336 8,934 9,981 11,202
Total Tax 3,354 2,786 3,468 4,407 5,804 Other Current Assets 4,988 6,122 6,549 7,009 7,503
Adjusted PAT 13,663 14,436 15,756 20,032 23,175 Cash & Equivalents 41,112 38,029 42,881 49,603 55,079
APAT Growth (%) 7.0 5.7 9.1 27.1 15.7 Total Current Assets 65,723 65,492 72,064 81,641 90,512
Adjusted EPS (Rs) 7.8 8.2 8.9 11.3 13.1 Creditors 17,094 19,811 20,732 22,602 24,739
EPS Growth (%) 7.0 5.7 8.8 27.1 15.7 Other Current Liabilities & Provns 1,484 1,809 1,917 2,026 2,134
Source: Company, HDFC sec Inst Research Total Current Liabilities 18,578 21,620 22,649 24,628 26,873
Net Current Assets 47,145 43,872 49,415 57,013 63,639
TOTAL APPLICATION OF FUNDS 68,438 65,801 72,189 79,994 86,687
Source: Company, HDFC sec Inst Research

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 DABUR INDIA: RESULTS REVIEW 3QFY20

Cash Flow Statement Key Ratios

(Rsmn) FY18 FY19 FY20E FY21E FY22E FY18 FY19 FY20E FY21E FY22E
Reported PBT 16,931 17,239 19,262 24,481 29,022 PROFITABILITY (%)
Non-operating & EO Items (2,262) 49 (38) (42) (42) GPM 50.5 49.5 50.3 51.1 51.3
Interest Expenses 424 596 583 332 266 EBITDA Margin 20.9 20.4 21.5 22.5 23.4
Depreciation 1,622 1,769 2,261 2,412 2,562 EBIT Margin 18.8 18.3 19.0 20.2 21.2
Working Capital Change (2,575) (255) (739) (929) (1,207) APAT Margin 17.7 16.9 17.2 19.6 20.2
Tax Paid (3,249) (2,786) (3,468) (4,407) (5,804) RoE 25.9 25.0 25.5 28.5 29.3
OPERATING CASH FLOW ( a ) 10,890 16,611 17,862 21,848 24,797 RoIC (or Core RoCE) 47.3 50.1 52.4 59.3 65.5
Capex (2,003) (1,929) (3,000) (2,500) (2,500) RoCE 22.4 22.7 24.0 27.2 28.5
Free Cash Flow (FCF) 8,887 14,682 14,862 19,348 22,297 EFFICIENCY
Investments (5,837) 4,464 (2,500) (2,500) (2,500) Tax Rate (%) 19.8 16.2 18.0 18.0 20.0
Non-operating Income 2,437 - - - - Fixed Asset Turnover (x) 2.5 2.7 2.6 2.7 2.9
INVESTING CASH FLOW ( b ) (5,402) 2,535 (5,500) (5,000) (5,000) Inventory (days) 59.4 55.6 54.7 53.8 53.2
Debt Issuance/(Repaid) (545) (3,880) (900) (1,600) (1,600) Debtors (days) 33.4 35.7 35.7 35.7 35.7
Interest Expenses (428) (596) (583) (332) (266) Other Current Assets (days) 23.6 26.2 26.1 25.0 23.9
FCFE 6,461 23,622 13,845 18,780 21,663 Payables (days) 80.8 84.7 82.7 80.7 78.7
Share Capital Issuance - 0 6 (0) 0 Other Current Liab&Provns (days) 7.0 7.7 7.7 7.2 6.8
Dividend (4,770) (13,273) (8,494) (10,651) (14,912) Cash Conversion Cycle (days) 28.5 25.0 26.1 26.5 27.2
Others - - - - - Net D/E (x) (0.6) (0.6) (0.6) (0.6) (0.6)
FINANCING CASH FLOW ( c ) (5,744) (17,748) (9,972) (12,583) (16,778) Interest Coverage (x) 27.4 26.2 29.8 62.1 91.3
NET CASH FLOW (a+b+c) (256) 1,398 2,390 4,264 3,019 PER SHARE DATA (Rs)
EO Items, Others 269 (17) - - - EPS 7.8 8.2 8.9 11.3 13.1
Closing Cash & Equivalents 3,061 4,442 6,793 11,015 13,992 CEPS 8.7 9.2 10.2 12.7 14.6
Source: Company, HDFC sec Inst Research Dividend 6.3 4.0 5.0 7.0 9.0
Book Value 32.4 33.1 37.1 42.4 47.1
VALUATION
P/E (x) 61.7 58.4 53.7 42.2 36.5
P/BV (x) 14.8 14.5 12.9 11.3 10.2
EV/EBITDA (x) 50.6 47.0 41.7 35.2 30.0
EV/Revenues (x) 10.6 9.6 9.0 8.0 7.1
OCF/EV (%) 1.3 2.0 2.2 2.7 3.1
FCF/EV (%) 1.1 1.8 1.8 2.4 2.8
FCFE/Mkt Cap (%) 0.8 2.8 1.6 2.2 2.6
Dividend Yield (%) 1.3 0.8 1.0 1.5 1.9
Source: Company, HDFC sec Inst Research

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 DABUR INDIA: RESULTS REVIEW 3QFY20

RECOMMENDATION HISTORY
Date CMP Reco Target
Dabur TP 9-Jan-19 416 BUY 477
550 2-Feb-19 452 BUY 482
530 10-Apr-19 404 BUY 485
3-May-19 382 BUY 464
510
9-Jul-19 406 BUY 457
490 22-Jul-19 420 BUY 470
470 11-Sep-19 444 BUY 491
450 22-Sep-19 446 BUY 497
430 11-Oct-19 439 BUY 490
5-Nov-19 481 BUY 511
410
30-Dec-19 460 BUY 512
390 9-Jan-20 461 BUY 512
370 31-Jan-20 479 BUY 510
350 Rating Definitions
Dec-19
Oct-19
Aug-19
Apr-19
Jan-19

Nov-19

Jan-20
Feb-19

Sep-19
May-19
Jun-19
Jul-19
Mar-19

BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

HDFC securities
Institutional Equities
Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park,
Senapati Bapat Marg, Lower Parel,Mumbai - 400 013
Board : +91-22-6171 7330 www.hdfcsec.com

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 DABUR INDIA: RESULTS REVIEW 3QFY20

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