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Strong position in high growth categories…
Diversified & high growth product portfolio
• Dabur India’s market capitalisation has increased by almost 3.5x
to | 20,653 crore from FY05 to FY11 with the average dividend
yield being ~4% (FY05-11)
• It is the largest ayurvedic and natural healthcare company in the
world, with ~85% of revenues generated from herbal business.
However, the company’s ambitions are not limited by this and it
also has a dominant presence in personal & home care categories
• Dabur enjoys a leadership position across its various segments. In
foods, Real fruits juices (~52%*), Chyawanprash (~66%*),
Hajmola (56%*) and branded honey enjoy a strong brand value.
In personal care & homecare products, amla hair oil, Fem skin
bleach and Odomos mosquito repellent cream (~69%*) also
enjoy a dominant share of their respective categories. It also has a
leading presence in the over the counter (OTC) healthcare
industry (~| 13,000 crore industry growing at ~15% per annum)
with a range of ~260 products
• Dabur’s presence in the lower penetrated and high growth
categories such as oral care (42% rural penetration), skin cream
(18% rural and 32% urban), health care and packaged foods
provides it substantial headroom for growth led by the strong
demographic and economic indicators of the country
Going ahead
• With the company’s dominant position in high growth categories,
revenue CAGR of ~19% and higher earnings CAGR of ~24%
(FY05-11), we believe the company would continue to maintain its
growth trajectory on the back of its large portfolio spanning
multiple categories
• Moreover, strong brand positioning & leadership position
provides it the pricing power & ability to absorb the cost inflation
• With the company extending its presence in the fast growing
international markets (North Africa, Turkey and Middle East), we
believe that, going ahead, the domestic inflation impact on
revenues could be offset by international exposure. Also, the
synergistic benefits from international acquisitions through cross
selling opportunities would aid revenue growth
Valuation
With the company’s ability to almost triple its revenues in the past seven
years, increase its earnings almost four fold from FY05 to FY11, maintain
strong cash flows, improve return ratios and a constant dividend payout
of ~40%, we believe that the company’s performance is the best among
its peers in the industry.
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