Dabur India - Reinforcing Its Leadership Position In Key Markets: Dolat Capital

Dolat Capital Report

We attended the Capital Markets Day of Dabur India Ltd. The management iterated its key strategic pillars which focuses on reinforcing its leadership position in key markets through -

1. Winning portfolio and innovation,

2. fit for purpose go-to-market,

3. building capabilities and transforming culture

4. operational excellence,

5. digitalisation and

6. profitability enhancement.

Key highlights of the interaction are as follows:

• Decent performance in unprecedented environment.

Dabur posted revenue of Rs 115.3 billion, up 5.9% on a YoY basis, supported by 6.2/11.1% growth from India/ International markets. However, Ebitda margin contracted by 190 basis points YoY to 18.8% as a result of unprecedented material inflation. Going ahead, Dabur has guided for Ebitda margin of ~19.5% in FY24E. Furthermore, the company would re-invest ~100- 125 bps improvement in gross margin towards advertising and promotion spends and digital initiatives.

• Relentless focus on power brands

Dabur’s fast moving consumer goods portfolio includes nine power brands, with eight power brands in India and one in international market. Dabur has ~23 brands above Rs 1 billion category, of which 17 brands are under Rs 1-5 billion. These brands are expected to scale up in the coming years and would garner revenue of Rs 5 billion plus. Out of the 17 brands, the company is focusing on scaling up Hajmola (revenue of Rs 3.5-4 billion) with the goal of making it a power brand.

• Robust distribution network

Dabur has 22 manufacturing facilities of which 14 are in India and eight are in the overseas market. Dabur has the widest distribution networks spanning across urban and rural markets, covering ~7.9 million retail outlets.

Furthermore, it is available in over 120 countries. In FY23, the company has crossed presence across 100,000 village and it would focus on further enhancing its rural footprints, going ahead.

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