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Recommendations » India

Dabur India 4QFY2014 performance highlights and results update

May 13, 2014, Tuesday, 13:55 GMT | 08:55 EST | 18:25 IST | 20:55 SGT
Contributed by Angel Broking


For 4QFY2014, Dabur India (Dabur) posted a 15.5% and 17.4% yoy growth in its consolidated top-line and bottom-line respectively. The domestic FMCG business’ volume growth continued to remain healthy at 9% on a yoy basis.

Key highlights: For 4QFY2014, Dabur’s results were in-line with our estimates. The company’s top-line rose by 15.5% yoy to Rs.1,769cr, aided by a 9.4% volume growth. Dabur’s volume and value growth remained healthy despite the slowdown witnessed in the FMCG industry. The company’s domestic FMCG business posted a 14% yoy sales growth, while the international business posted a 19.7% sales growth. On the domestic front, while the health supplements category grew by 18% yoy, the digestives category rose by a strong 23% yoy. During the quarter, the company’s gross margins fell by 20bp on a yoy basis. Staff costs and advertising expenses increased substantially by 26.4% yoy and 19% yoy respectively resulting in a 60bp yoy fall in OPM. The bottom-line rose by 17.3% yoy to Rs.235cr.

Outlook and valuation: We expect Dabur’s top-line to post an ~15.1% CAGR over FY2014–16E. The bottom-line is expected to post a 20.1% CAGR, aided by top-line growth and margin expansion. At the current market price, the stock is trading at 24.8x FY2016E EPS. We maintain our Neutral view on the stock.