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Robust growth in international operations…
Dabur’s Q4FY11 results were in line with our expectations. During the
quarter, the company reported net sales of | 1108.2 crore against our
expectation of | 1079 crore with margins at 19.2% against our
expectation of 19%. Consolidated sales in Q4FY11 were up 30.6% YoY
with the growth in standalone sales being ~14% (9.3% volume growth
and 4.7% price growth). International acquisitions contributed ~16% of
sales in Q4FY11. On the operating front, higher raw material prices pulled
down margins by 100 bps YoY and 270 bps QoQ to 19.2% in Q4FY11. In
spite of higher taxes, interest cost and depreciation, the bottomline
witnessed a growth of 8.7% YoY from | 135.3 crore in Q4FY10 to | 147
crore in the quarter.
�� Highlights of the Quarter
The company consolidated the sales of its acquisitions Hobi Kozmetik,
Turkey and Namasté Laboratories, US during the quarter. The sales for
Hobi were | 57 crore while that for Namasté were | 118.5 crore. Post the
acquisition of Hobi and Namasté, the revenue of the international
business stood at | 892 crore (22% of consolidated sales) with the growth
in Q4FY11 being 9.5%.
Valuation
At the CMP of | 99, the stock is trading at 24.3x and 21.8x its FY12 and
FY13 estimated EPS of | 4.1 and | 4.5, respectively. With the extensive
expansion plans (both organic and inorganic) of the company, we expect
the topline to grow at a CAGR of ~17% in FY11-13E. With the company’s
efficient cost management in the face of surging raw material prices, it
has managed its margins (compared to its peers) through its ability to
pass on the costs. Though the bottomline has been under pressure due to
the increase in loans for acquisitions, going ahead, a reduction in interest
costs would improve the earnings, thereby leading to an EPS growth of
~17% (CAGR FY11-13E). Hence, we value the stock at 25x its FY13E EPS
of | 4.5 and arrive at a target price of | 113 with a BUY rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Robust growth in international operations…
Dabur’s Q4FY11 results were in line with our expectations. During the
quarter, the company reported net sales of | 1108.2 crore against our
expectation of | 1079 crore with margins at 19.2% against our
expectation of 19%. Consolidated sales in Q4FY11 were up 30.6% YoY
with the growth in standalone sales being ~14% (9.3% volume growth
and 4.7% price growth). International acquisitions contributed ~16% of
sales in Q4FY11. On the operating front, higher raw material prices pulled
down margins by 100 bps YoY and 270 bps QoQ to 19.2% in Q4FY11. In
spite of higher taxes, interest cost and depreciation, the bottomline
witnessed a growth of 8.7% YoY from | 135.3 crore in Q4FY10 to | 147
crore in the quarter.
�� Highlights of the Quarter
The company consolidated the sales of its acquisitions Hobi Kozmetik,
Turkey and Namasté Laboratories, US during the quarter. The sales for
Hobi were | 57 crore while that for Namasté were | 118.5 crore. Post the
acquisition of Hobi and Namasté, the revenue of the international
business stood at | 892 crore (22% of consolidated sales) with the growth
in Q4FY11 being 9.5%.
Valuation
At the CMP of | 99, the stock is trading at 24.3x and 21.8x its FY12 and
FY13 estimated EPS of | 4.1 and | 4.5, respectively. With the extensive
expansion plans (both organic and inorganic) of the company, we expect
the topline to grow at a CAGR of ~17% in FY11-13E. With the company’s
efficient cost management in the face of surging raw material prices, it
has managed its margins (compared to its peers) through its ability to
pass on the costs. Though the bottomline has been under pressure due to
the increase in loans for acquisitions, going ahead, a reduction in interest
costs would improve the earnings, thereby leading to an EPS growth of
~17% (CAGR FY11-13E). Hence, we value the stock at 25x its FY13E EPS
of | 4.5 and arrive at a target price of | 113 with a BUY rating.
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