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Dabur India
Demand Trends - Volume growth rates have moderated in recent months with
Q2FY12 domestic volume growth slipping to 5%. Expect domestic volume growth
to revive in 2H FY12 supported by increased brand spending and new launches. For
Dabur rural growth rates have slowed down more than urban growth rates.
Competitive environment - Dabur finds competitive challenges in certain personal
care categories like shampoos, oral care and skin care to be quite stiff. They prefer
either to target niche positions within these categories (e.g. herbal based shampoos
and toothpaste) or else stay away from some segments (like mainstream skin care).
Optimistic on overseas business - Dabur expects healthy double digit growth rates
for its overseas business with strong focus on expanding its reach in Sub-Saharan and
South Africa. Management believes that steady state margins in Africa will be
comparable or ahead of domestic margins.
Margins - Management believes that maintaining high teen EBITDA margins is the
target. While recent pricing actions (upwards) have been calibrated in light of steep
input cost pressures, they don’t want to hurt demand by pricing products too high.
A&P spends will likely be maintained at 13-14% of sales. Volatility in raw material
prices and competitive intensity in HPC categories pose key risks to margins in 2H.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dabur India
Demand Trends - Volume growth rates have moderated in recent months with
Q2FY12 domestic volume growth slipping to 5%. Expect domestic volume growth
to revive in 2H FY12 supported by increased brand spending and new launches. For
Dabur rural growth rates have slowed down more than urban growth rates.
Competitive environment - Dabur finds competitive challenges in certain personal
care categories like shampoos, oral care and skin care to be quite stiff. They prefer
either to target niche positions within these categories (e.g. herbal based shampoos
and toothpaste) or else stay away from some segments (like mainstream skin care).
Optimistic on overseas business - Dabur expects healthy double digit growth rates
for its overseas business with strong focus on expanding its reach in Sub-Saharan and
South Africa. Management believes that steady state margins in Africa will be
comparable or ahead of domestic margins.
Margins - Management believes that maintaining high teen EBITDA margins is the
target. While recent pricing actions (upwards) have been calibrated in light of steep
input cost pressures, they don’t want to hurt demand by pricing products too high.
A&P spends will likely be maintained at 13-14% of sales. Volatility in raw material
prices and competitive intensity in HPC categories pose key risks to margins in 2H.
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