Dabur ( Buy) Net sales increased 14.7% :: Edelweiss,

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Dabur(DABUR IN, INR 103, Buy)
n Net sales increased 14.7%
Dabur’s Q2FY11 revenues increased 14.7% Y-o-Y to INR 9.73 bn (our estimate INR 9.90
bn). Net profit increase of 15% Y-o-Y to INR 1.60 bn (our estimate INR 1.60 bn) was
impacted by increase in tax rate, which jumped 120 bps Y-o-Y to 18.2%.
n Low A&P spend resulted in lower than expected volume growth
Dabur’s EBITDA grew 15.8% Y-o-Y to INR 2.03 bn as EBITDA margin expanded 20 bps
Y-o-Y to 20.9%. COGS increase of 210 bps was offset by lower Advertising and Sales
promotion (A&P) spend (170 bps) and lower staff costs (50 bps). Volume growth was
~14% Y-o-Y following lower A&P spend.
n Growth across SBUs; De-growth in shampoo (-13.9%) contained
In Q2FY11, the CCD, consumer health division (CHD), and international business division
(IBD) grew 14.2%, 14.1%, and 18.7%, respectively. Growth in both CCD and IBD was
led by strong double -digit volume growth. Disruptive competitive activity with high
intensity of consumer promotions and media spends led to contraction of shampoos.
Shampoo business was also impacted due to high base effect with extraordinary high
growth in H1FY10. Marketing and promotional activities continued as market share in
shampoo improved to 6.5% in Q2 FY11 from 6.1% in Q1FY11 as per A C Nielsen.
Conference call is at 4 pm IST on Thursday 28th October. Conference Dial-In Numbers
+91 22 3065 0117, +91 22 6629 0317. USA: 1 866 746 2133; UK: 0 808 101 1573;
Singapore: 800 101 2045 and Hong Kong: 800 964 448.
We will come out with a detailed note post conference call.
n Q2FY11 results robust
Revenues increased 14.7% Y-o-Y to INR 9.73 bn (our estimate INR 9.90 bn).
Net profit increased 15% Y-o-Y to INR 1.60 bn (our estimate INR 1.60 bn) impacted by
increase in tax rate. Tax rates jumped 120bps Y-o-Y to 18.2% in Q2FY11. Volume
growth was ~14% Y-o-Y.
Dabur’s EBITDA grew 15.8% Y-o-Y to INR 2.03 bn as EBITDA margin expanded 20bps Yo-
Y to 20.9%. COGS increase of 210 bps was offset by lower A&P spend (170 bps) and
staff costs (50 bps).
In Q2FY11, the CCD, consumer health division (CHD), and international business division
(IBD) grew 14.2%, 14.1%, and 18.7%, respectively. Growth in both CCD and IBD was
led by strong double-digit volume growth.