INVESTMENT DECISION OF DABUR

PRESENTATION ON CORPORATE
FINANCE

PRESENTED BY

Utakarsh Dhar Diwedi Anadi Nath Mishra

Sandeep Shukla Alish Sinha
Rashmi Singh Shivani Jaiswal
Aakash kumar Shivam Prakash
Rahul Tiwari Sandhya
 Industry Overview

The FMCG industry is generally considered to

be stable and consistent, with steady growth in  Fast-moving consumer goods (FMCG) is the 4th largest sector in the
sales and revenues. This is due to the constant
Indian economy.
demand for consumer goods, as well as the
ability of companies to increase prices to  Growing awareness, easier access and changing lifestyles have been
maintain profitability. The industry also tends to
key growth drivers for the sector. Brand consciousness has also aided
have high margins, as the cost of goods sold is
relatively low. growth.
 The urban segment accounts for 55% on the other hand, the rural
segment contributes 45% and is growing at a faster pace compared to
the urban segment.
 Despite being one of the fastest-growing markets globally for FMCG
products, the per capita FMCG consumption in India is still amongst
the lowest in the world, giving the industry a long runway for growth.
 Company Overview

Dabur India Limited is among the Top 5 FMCG Market Capitalization 100,281.8
Companies in India with Revenues of over Rs 10,800
Crore & Market Capitalization of about Rs 100,000
Crore. Building on a legacy of quality and experience for Total Debt (FY22) 1,030.1
over 138 years, Dabur is today India’s most trusted name Cash and Investments
and the world’s largest Ayurvedic and Natural Health 6,780.3
(FY22)
Care Company. Dabur India's FMCG portfolio includes
nine Power Brands with distinct brand identities – Dabur EV 95,707.8
Chyawanprash, Dabur Honey, Dabur Lal Tail, Dabur
Honitus, Dabur PudinHara, Dabur Amla, Dabur Red 52week H/L (₹) 610.8/482.3
Paste, Réal and Vatika. Equity Capital 176.8
Funding

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Funding
 Dabur India Ltd. raises its first public issue. Due to market confidence in the Company, shares issued at a
high premium are oversubscribed 21 times.

 Promoters have decreased holdings from 67.24% to 66.24% in Dec 2022 qtr

 FII/FPI have increased holdings from 20.24% to 20.47% in Dec 2022 qtr.

 Number of FII/FPI investors increased from 850 to 886 in Dec 2022 qtr.

 Mutual Funds have increased holdings from 2.53% to 3.05% in Dec 2022 qtr.

 Number of MF schemes decreased from 32 to 30 in Dec 2022 qtr.

 Institutional Investors have increased holdings from 26.93% to 28.08% in Dec 2022 qtr.

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 Capital Budgeting Strategy of Dabur
Dabur's capital budgeting strategy primarily involves
investing in projects that are expected to generate returns
that exceed the company's cost of capital. The company's
management evaluates various investment opportunities
and uses a variety of techniques, such as net present value
(NPV) and internal rate of return (IRR), to determine the
expected returns of each project.

To achieve its capital budgeting goals, Dabur also

makes use of debt financing. The company has a
conservative debt policy and maintains a healthy debt-
to-equity ratio, which helps to keep its financial risk
under control. Additionally, Dabur also follows a
policy of maintaining a healthy cash balance to meet
any contingencies and for future opportunities.
 Initial investment 76774 RATE 6%

Cash flow 1 2 3 4 5
49,845 56,391 57,582 62,675 72,700

NPV 172754.5
NPV 95980.47

IRR 1 49845 1.07 46584.11 1 49845 1.08 46152.78

7% 2 56391 1.14 49465.79 8% 2 56391 1.16 48612.93
3 57582 1.22 47198.36 3 57582 1.24 46437.1
4 62675 1.31 47843.51 4 62675 1.32 47481.06
5 72700 1.4 51928.57 5 72700 1.4 51928.57
243020.3 240612.4
Dabur, like many companies, may raise funds through a variety of means including issuing debt or
equity, taking out loans, or through partnerships and joint ventures. Some specific ways Dabur may
raise funds include:

Issuing bonds: Dabur may issue bonds to raise funds from investors. Bonds are a form of debt and
investors loan money to the company in exchange for regular interest payments and the return of the
principal at maturity.

Stock offerings: Dabur may also raise funds by issuing new shares of stock to the public through an
initial public offering (IPO) or a secondary offering. This allows the company to raise capital by
selling ownership stakes in the company to investors.

Partnering with other companies: Dabur may also raise funds through partnerships and joint ventures
with other companies. This can include forming a joint venture with another company to develop and
market a new product or partnering with a company to expand distribution channels.

It's worth noting that the information above is based on general knowledge of the company and the
industry, but the specific strategies and methods that Dabur uses to raise funds may have changed in
recent years.
• ARR: The accounting rate of return YEAR 2018 2019 2020 2021 2022
(ARR) is a formula that reflects the PAT 1,357.5 1445.3 1,447.9 1,696.0 1,744.1
percentage rate of return expected on
an investment or asset, compared to Total CA=4316.8
the initial investment's cost. Total CL=3322.5
IC=5500
SV=0

AVERAGE PAT = 1,538.2

AVERAGE INVESTMENT=NWC+SV+1/2(IC-SV)
994.3+0+1/2(5500-0)=3744.3
ARR= Avg. PAT/ Avg.Investment*100
1538.2/3744.3*100 = 41%
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 Profitability index is a financial metric that measures the
performance of an investment or company .It can also known as
profit investment ratio
FORMULA = NPV + Initial Investment /Initial Investment
It helps to determine your investment decision is good or not.

Advantages
1.Helpful for managers decide whether investment was good or not.
2.It helps to create a good comparison of performance of different business.

3.Disadvantage
4.Difficult in determine the rate of return.
Return On Capital Employed (ROCE) is a long-
term profitability ratio that measures how
efficiently a company is employing its capital to
generate profit. It is calculated by dividing the
EBIT (Earnings before Interest and Taxes) by
total assets minus total current liabilities.

Year ROCE Price Price Change

22-Mar 25.71 536.2 -0.80%

21-Mar 26.27 540.5 20.10%

20-Mar 25.77 450.5 10.09%

19-Mar 30.8 408.8 24.48%

18-Mar 27.77 328.4 18.41%

 INVESTMENT DECISION OF DABUR
Dabur’s share price has given 89% return in last 5 years ( from Rs 303 in august 2018 to 574
in August 2022.
The company has a total distribution reach of 6.9 million retail outlets with direct reach of
1.3 million outlets. It plan to increase direct distribution to 1.5 million outlets in next two
years.
The company would be adding 6,000 chemist stores in FY23. E-commerce sales is
contributing 9% to the company’s sales
Dabur also derives- 50% of its sales through rural regions with a presence in 90,000 villages.

Dabur India sees 13.9% growth in 2021-2022.

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 Depreciation charges increased by 5.3% and finance costs increased by 25.3%
YoY, respectively.

The Company has been maintaining an effective average operating margins

of 20.20% in the last 5 years.

DABUR's revenue has grown from Rs 80,005 m in FY18 to Rs 112,818 m in

FY22.

Over the past 5 years, the revenue of DABUR has grown at a CAGR of 9.0%.

 DABUR net profit has grown at a CAGR of 6.5%.

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 Profit Growth of Dabur last 5 Sales Growth of Dabur last 5
year year 
5 YEAR 7.5% 5 YEAR 9.1%

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Thank You