Session 2020-23

Project Report on:

DABUR Inc.

Submitted to:

Dr. K.P. Venugopala

Submitted by:
Rishit Goyal (20021021458);
Harshul Sethi (20021021092);
Rohil Singh (20021021201)
 ANALYSIS OF DABUR’S FINANCIAL STATEMENTS

 Current Valuations for DABUR

1) The current Market Capitalization of the company is at Rs 1,15,608 Crore.

2) Current Net profit of the company Stands at Rs 1,695 Crore.
3) The Earning Per Share (EPS) of FY’21 is at Rs 9.58 Compared to FY’20 which was at Rs
8.18
4) The price to earnings (P/E) ratio, at the current price stands at 59.8
5) The book value per share (BVPS) stands at Rs 43.57

 Comparative Income Statement

1) The figure we can’t help seeing is the revenue from operations. There has been a near
9.75% increase in revenue from operations which is accredited to the increasing market
share across all key categories like Shampoos, Toothpaste, Hair Oils, Chyawanprash and
Packaged Juices & Nectars.
2) As there was decline in the trade of goods internationally ascribable to the infamous
pandemic the excise duty imposed on the goods of the FMCG sector was reduced by
20.58%.
3) The cost of Changes in inventories/stock in trade rose up to 218.57 %.
4) However, there was a massive decrease in the finance costs (almost 37.81%).
5) The tax expense too increased from 2020 with a huge percentage of 29.08%.

 Common size income statement

1) Comparing year 2021 with 2020, we can see that total income is more in 2020
(103.51%) than in year 2021 (103.40%) and cost of materials consumed reduced in
2021.
2) Overall expenses have reduced in year 2021.
3) Profit before tax is more in 2021 i.e., 21.5% than 19.85% in 2020
4) The net profit for the year 2021 is more than that of 2020 i.e., 17.73% and 16.64%
respectively thus showing growth.
5) There’s just a minor increase in taxes as compared between 2020 (3.21%) and 2021
(3.78%) respectively.
 6) Other Income – In comparison to net sales being just 3.51% & 3.40% for FY’21 &
FY20’ respectively it is signifying that most of the income of Dabur is from main
recurring and productive operations.

 Cash Flow Statement Analysis

 DABUR's cash flow from operating activities (CFO) during FY21 stood at Rs 1,704
Crore an improvement of Rs 550 Crore on a YoY basis indicating that the core
business activities of the company are thriving.

 Cash flow from investing activities (CFI) during FY20 stood at Rs - 331.54 Crore and at
FY’21 at – 1,121.40 Crore indicating that the company has invested a large amount of
money in purchasing investments however this amount is ultimately going to bring
growth and future benefits for the company.

 Cash flow from financial activities (CFF) during FY’21 stood at Rs -555.04 Crore
against FY’20 at Rs -826.00 Crore, which states that the cash has come into the
business.

Overall, net cash flows for the company during FY21 stood at a Positive Rs 7.01 Crore as
compared to FY’20 where it was at Rs – 21.75 Crore.

 DABUR Balance Sheet Analysis

1) The company's current liabilities during FY21 stood at Rs 2,934 Crore as

compared to Rs 2,463 crore in FY20, thereby witnessing an increase of 19.1%.

2) Dabur’s Borrowings decreased from FY’20 at Rs 162.9 Crore to Rs 134.13

Crore in FY’21 thereby witnessing a decrease of 17.66%.
3) Current assets fell 2.14% and stood at Rs 4,775 crore in FY’21, While
Noncurrent assets rose 35.71% and stood at Rs 6,071 Crore in FY21.
4) Overall, the total assets and liabilities for FY21 stood at Rs 10,847 Crore as
against Rs 9,364 Crore during FY20, thereby witnessing a growth of
15.96%.
 Ratios

 Debt to equity 0.06

o The debt-to-equity ratio is a financial ratio indicating the relative proportion
of entity's equity and debt used to finance an entity's assets. This ratio is also
known as financial leverage.
o Debt to equity should not exceed 2.0
o The debt-to-equity ratio of Dabur Inc. is 0.40.

 Current ratio 1.63

o The current ratio is a liquidity ratio that measures whether a firm has enough
resources to meet its short-term obligations
o In general, a good current ratio is anything over 1, with 1.5 to 2 being the
ideal.
o The Current Ratio of Dabur Inc is 1.63 which states that company has enough
resources to pay its debts over the next 12 months.

 Quick ratio 1.04

o The quick ratio measure of a company's ability to meet its short-term
obligations using its most liquid assets.
o The higher the quick ratio, the better the position of the company. The
commonly acceptable current ratio is 1.
o The quick ratio of Dabur Inc. is 1.04 which is near ideal.

 Interest Coverage Ratio 67.77

o The interest coverage ratio is a debt and profitability ratio used to determine
how easily a company can pay interest on its outstanding debt.
o Generally, an interest coverage ratio of at least 2 is considered the minimum
acceptable amount for a company that has solid, consistent revenues.
o Dabur inc. has an interest coverage ratio of 67.77 which is consider high by
analysts

 Profitability Ratios

 Return on Equity (ROE): 22.09

 o The ROE measures the ability of a firm to generate profits from its
shareholders capital in the company.
o ROE of 15–20% are generally considered good.
o ROE of dabur is 22.09 which is ideal.

 Return on Capital Employed (ROCE): 26.38

o Return on capital employed (ROCE) is a financial ratio that measures a

company’s profitability in terms of all of its capital.
o A good ROCE varies between industries and sectors, and has changed over
time, but the long-term average for the wider market is around 10%.
o ROCE of dabur is 26.38

 Return on Assets (ROA): 15.61

o The ROA measures how efficiently the company uses its assets to generate
earnings.
o An ROA of 5% or better is typically considered a good ratio while 20% or
better is considered great.
o ROA of dabur is 15.61.
 Z SCORE

 Altman Z-score of 22.69 is strong.

Dabur India has an Altman Z-Score of 22.69, indicating it is in Safe Zones. This implies the
Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.

When Altman Z-Score >= 3, it is in Safe Zones.

When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The Altman Z-score is a formula for determining whether a company, notably in the
manufacturing space, is headed for bankruptcy. The formula takes into account profitability,
leverage, liquidity, solvency, and activity ratios. An Altman Z-score close to 1.8 suggests a
company might be headed for bankruptcy, while a score closer to 3 suggests a company is in
solid financial positioning.
 TREND ANALYSIS

2021 2020 2019 2018 2017

NET 138% 127% 127% 109% 100%
PROFIT/LOSS

BASIC EPS 138% 117% 126% 107% 100%

TOTAL 144% 117% 107% 111% 100%

ASSETS &
LIABILITIES
INCOME 132% 117% 116% 104% 100%

EXPENDITUR 131% 115% 114% 102% 100%

E

INTERPRETATION

NET PROFIT/LOSS BASIC EPS TOTAL ASSETS & LIABILITIES 

INCOME EXPENDITURE
160% It
140%
120%
100%
80%
60%
40%
20%
0%
2021 2020 2019 2018 2017

is found that Income & Expenditure both show an increasing trend at

almost same rate with income being a little higher. Eventually profit also
increases. Assets show a significant rise over the past year. Earnings per
share have shown a fluctuating trend over the past five years.

 Overall company is in its growth phase over the last year with significant
rises in profits, revenue and assets and is on the way to a brighter future.