Dabur

TAT India (DABIND)

CMP: | 425 Target: | 500 (18%) Target Period: 12 months BUY
July 22, 2019

Strong domestic volume growth lifts revenues…

Domestic business grew 10.5% driven by volume growth of 9.6% as most
categories posted double digit growth during the quarter. International
business reported growth of 7% in constant currency terms led by strong

Result Update
growth in Turkey, SSA, Pakistan and Nepal. EBITDA margins expanded 157
Particulars
bps to 20.1% on account of 67 bps, 59 bps & 40 bps dip in advertisement,
Particular (| crore) Amount
employee expenses & other overheads to sales, respectively.
Market Capitalization 74,651.3
Total Debt (FY19) 528.8
Encouraging performance across segments Cash and Investments (FY19) 1,053.6
EV 74,126.5
Domestic business grew 10.5% driven by 9.6% growth in volume,
52 week H/L (|) 490 / 358
supported by higher trade promotions. All key categories witnessed growth: Equity capital 176.6
health supplements (+19.6%), digestives (+18.2%), OTC (+13.1%), ethicals Face value (|) 1.0
(+15.9%), hair oil (+12.1%), shampoo (+10.9%), oral care (+11.4%) and
skin care (+12.1%). However, mere 1.5% growth in foods, on account of Key Highlights
increased competitive intensity, was a disappointment. Volume growth was
encouraging, considering a high base of 21%. However, the management  Consumer care segment grew 11.4%
has indicated a further slowdown in rural demand with growth in June YoY led by 17.8% growth of
moderating to 7% vs. 10.5% for the quarter. International business healthcare segment growth wherein
recovered with 7.7% constant currency growth vs. flat growth in Q4FY19 led health supplements, digestives, OTC
by Turkey, SSA region, Nepal and Pakistan. & ethicals grew 19.6%, 18.2%, 13.1%
& 15.9%, respectively

ICICI Securities – Retail Equity Research

High concentration to rural to drive future growth  Foods segment grew 1.5% YoY
Dabur derives 40-45% of revenue from rural sales vs. 35% for the industry,
 PAT increased 10.2% but adjusting
which has led the company to grow at 20% sales CAGR over FY09-14.
for exceptional loss, PAT increased
However, a rural slowdown due to GST and demonetisation over last four
14.2% YoY
years has resulted in a tepid topline growth of ~4% in the last five years.
Though high base in FY19 and recent rural slackness may impact Dabur’s  Maintain BUY with revised target
performance in FY20, we stay positive on long term growth prospects for price of | 500/per share
Dabur. We believe the government would increase its measures to improve
Research Analyst
farmer income levels and will look to structurally improve the rural
economy, which will help revive per capita consumption across FMCG Sanjay Manyal
categories. Also, Dabur’s focus on expanding direct reach in rural (of nearly sanjay.manyal@icicisecurities.com
66,000 villages that generate 50% sales in rural FMCG, Dabur has a direct Kapil Jagasia, CFA
reach in nearly 48,000 villages) gives it a significant edge over peers. kapil.jagasial@icicisecurities.com

Valuation & Outlook

Dabur has a well-diversified product portfolio catering to different segments.
It has three brands (Real, Vatika, Amla) with turnover of | 1,000 crore+ 16
brands with turnover of | 100 crore+. Competitive intensity from Patanjali
has subsided significantly resulting in double digit growth for Dabur in most
categories over the last few quarters. We expect Dabur to generate revenue,
PAT growth at 10.7%, 10.1% CAGR, respectively, on the back of strong
volume growth of 7% in FY19-21E. Hence, we maintain BUY rating on Dabur
with a revised target price of | 500.

s
Key Financial Summary
Key Financials FY17 FY18 FY19 FY20E FY21E CAGR (FY19-21E)
Net Sales 7701.4 7748.3 8533.1 9492.0 10448.7 10.7%
EBITDA 1508.9 1617.4 1739.6 1925.4 2136.3 10.8%
EBITDA Margin % 19.6 20.9 20.4 20.3 20.4
Net Profit 1280.3 1357.7 1446.3 1584.1 1753.8 10.1%
EPS (|) 7.27 7.71 8.19 8.97 9.93
P/E 58.5 55.1 51.9 47.4 42.8
RoNW % 26.4 23.8 25.7 23.6 24.0
RoCE (%) 28.0 26.2 29.6 27.6 28.1
Source: Company, ICICI Direct Research
 Result Update | Dabur India ICICI Direct Research

Exhibit 1: Variance Analysis

EESes

Q1FY20 Q1FY20E Q1FY19 YoY (%) Q4FY19 QoQ (%) Comments

Net sales grew 9.3% YoY on the back of domestic
Net Sales 2,273.3 2,157.6 2,080.7 9.3 2,128.2 6.8 volume growth of 9.6% YoY and international business
constant currency growth of 7% YoY
Material costs to sales increased 94 bps to 50.2% due
Raw Material Expenses 1,147.7 1,096.3 1,048.6 9.5 1,069.3 7.3 to higher promotions and adverse currency impact in
the international business
Employee costs to sales declined 59 bps YoY to 10.2%
Employee Expenses 231.4 241.6 224.1 3.2 241.9 -4.3 due to reversal of some of the Esops during the
quarter
A&P spend to sales declined 67 bps YoY to 8.9%.
SG&A Expenses 202.1 187.6 199.0 1.6 97.8 106.7
However, allocation to power brands increased 15%
Other operating Expenses 234.4 235.9 222.9 5.2 262.0 -10.5

EBITDA 457.6 396.3 386.1 18.5 457.2 0.1

EBITDA margins expanded 157 bps to 20.1% on
account of 67 bps dip in advertisement spend to sales,
EBITDA Margin (%) 20.1 18.4 18.6 157 bps 21.5 -135 bps
59 bps dip in employee expenditure to sales and 40
bps dip in other overheads to sales
Depreciation 52.8 46.2 42.7 23.4 46.2 14.1
Interest 15.3 12.5 14.9 2.5 12.4 23.0
Other Income 73.3 77.0 73.7 -0.5 66.1 10.9
Exceptional items 20.0 0.0 0.0 N.A. 75.3 N.A.
PBT 442.9 414.6 402.2 10.1 389.3 13.8
Tax Outgo 79.4 81.4 72.4 9.7 17.8 346.7
PAT increased 10.2% YoY. However, adjusting for
PAT 363.8 333.3 330.0 10.2 371.5 -2.1 exceptional loss towards provision for treasury
investment in DHFL, net profit increased 14.2% YoY
Key Metrics YoY growth (%)
Volume Growth 9.6 21.0 4.3
Standalone sales growth 10.5 19.4 5.9
Subsidiary's sales growth 6.2 9.2 1.2
Source: Company, ICICI Direct Research

Exhibit 2: Change in estimates

FY20E FY21E
(| Crore) Old New % change Old New % change Comments
Sales 9,572.8 9492.0 -0.8 10,550.4 10,448.7 -1.0 We marginally tweak our estimates
EBITDA 1961.6 1925.4 -1.8 2183.7 2136.3 -2.2
EBITDA Margin (%) 20.5 20.3 -21 bps 20.7 20.4 -25 bps
PAT 1618.4 1584.1 -2.1 1794.2 1753.8 -2.2
EPS (|) 9.16 8.97 -2.1 10.16 9.93 -2.2
Source: Company, ICICI Direct Research

Exhibit 3: Assumptions
Current Earlier Comments
FY17 FY18 FY19 FY20E FY21E FY19E FY20E
Std. Sales (| crore) 5,369.8 5,609.1 6,273.2 6,964.7 7,643.3 7,045.4 7,770.3 We slightly change domestic revenue estimates
Volume Growth (%) NA NA NA NA NA NA NA
We change subsidiary revenue estimates considering revival
Subs. Sales (| crore) 2,331.6 2,139.3 2,259.9 2,527.3 2,805.4 2,527.3 2,780.1
in Turkey and SSA region
RM exp. To sales % 49.9 49.6 50.5 50.2 50.1 50.0 49.8
Adex to sales % 8.4 7.8 7.1 8.0 8.0 8.0 8.0
Interest Cost (| crore) 54.0 53.1 59.6 53.9 55.9 43.1 36.3
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 2

 Result Update | Dabur India ICICI Direct Research

Conference Call Highlights

 Dabur India reported consolidated sales growth of 9.3%. Domestic sales
grew 10.5% led by 9.6% volume growth. International business
increased 7.7% in constant currency terms

 After good sales growth in April and May 2019, June witnessed sales
moderation in range of ~7-8% with volume growth of around 5%

 Home and personal care, which contributed 52.5% to sales, posted

11.7% growth. Home care and skin care segments grew 10.9% and
12.1%, respectively, driven by strong growth in Odonil, Gulabari and
bleach portfolio. Odomos was impacted by low incidence of mosquito-
led diseases. Hair oils portfolio grew 12.1% driven by double digit
growth in Amla franchisee. Dabur’s market share in the hair oils category
increased 46 bps. Oral care saw 11.4% revenue growth led by continued
growth momentum in Red toothpaste (15% growth); Dabur increased
its value market share by 40 bps; Babool Ayurvedic toothpaste was
launched during the quarter. Shampoo segment grew 10.9% driven by
strong growth in newly launched bottles. Dabur’s market share in
shampoos category increased 46 bps to 5.3%

 Healthcare segment, which contributed 27.1% to sales, saw growth of

17.8%. Health supplements grew 19.6% on the back of good
momentum in Dabur Glucose. Its market share in glucose category
increased 106 bps. Digestives grew 18.2% driven by Dabur’s focus on
investing in the Hajmola and Pudin Hara brands. OTC grew 13.1% on
the back of good growth in Shilajit and BadamTail while Ethicals grew
15.9% driven by robust growth across product categories driven by
medico-marketing, distribution expansion and activations

 Foods division, which contributed 20.4% of sales, witnessed a mere

1.5% growth as beverages reported low growth on account of late onset
of summer in North India and heightened activity by milk based
beverages manufacturers. It continued to maintain market share of
56%+. Dabur expanded Masala range with the introduction of Masala
Mixed Fruit and Masala Aam Panna variants. It launched Real Mixed
Berries and Real Fruit ORS and a new | 10 SKU for Real Koolerz Mango

 International business posted 7.7% growth in Q1FY20. Hobby had a

strong quarter in constant currency terms, growing 41%. However,
currency devaluation impacted translation. SSA business grew 9.5%
with Nigeria growing 22% in constant currency terms. Nepal grew 8.3%,
Pakistan grew 22.2%. Growth in MENA region was flattish. Namaste
business reported 4.1% in the domestic US business

 As per the management, input cost inflation is benign while prices are
expected to stay soft in FY20E. The company has taken a price hike of
1.5% during the quarter, which it expects to remain at ~2% for the year.
It also expects to maintain operating margins at 20%

 Out of 6.6 lakh villages in India, 66,000 generate ~50% of rural FMCG
sales. The company has increased direct reach by 4,000 to 48,000
villages during the quarter. It expects to reach to 51000 by FY20E. Dabur
added 40,000 additional outlets taking its direct reach to 1.14 mn

 Naturals’ segment is ~25-30% of oral care category of | 8,000 crore and

is growing at 18%

 Highest growth contribution was from south followed by east, west and
north. The economic slowdown is worse in North. Hence, it is difficult to
grow business in that region

 FY20E capex is expected to be around | 250-300 crore

ICICI Securities | Retail Research 3

 Result Update | Dabur India ICICI Direct Research

Key Metrics
Exhibit 4: Category wise revenue growth in percentage (YoY)
Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Hair Care NA NA -20.0 -4.0 -11.0 2.3* 16.7* 8.8* 18.8* 11.1* 24* 3* 12.1*
Oral Care 11.6 NA -5.0 9.0 1.5 22.8 23.0 11.0 17.3 3.9 10.0 8.2 11.4
Health Supp. NA NA -11.0 5.0 -7.0 3.0 19.5 14.0 27.5 12.3 13.8 10.2 19.6
Digestives NA NA -10.0 -5.0 4.0 11.7 19.3 7.2 21.6 10.8 22.5 11.9 18.2
Skin Care NA 7.0 -11.0 0.0 4.0 15.8 14.5 8.5 27.1 11.9 19.3 11.2 12.1
Home Care 2.0 20.0 -5.0 -6.5 6.2 10.1 36.0 N.A. 17.4 10.9 8.9 16.2 10.9
Foods 4.3 15.2 52.0 10.0 -8.3 11.7 0.0 -1.5 N.A. 2.3 11.1 -6.5 1.5
OTC NA NA NA NA NA NA NA 7.8 13.3 10.0 17.7 16.6 13.1
Ethicals NA NA NA NA NA NA NA 10.3 23.4 6.1 17.4 9.7 15.9
Source: Company, ICICI Direct Research * Hair oil (Shampoo increased by 10.9%)

Exhibit 5: Revenue growth to improve in FY19-21E Exhibit 6: EBITDA margin to remain range bound

12000 10448.7 14 2500.0 20.9 20.4 20.4 25.0

19.3 19.6 20.3
9492.0 12
10000 8533.1 2000.0 16.6 20.0
7806.4 7868.8 7701.4 7748.3 10
11.2 10.1
8000 8
10.4 10.1 1500.0 15.0
0.8 6
6000
4 1000.0 10.0
0.6
4000 2

1295.6

1518.3

1508.9

1617.4

1739.6

1925.4

2136.3
-2.1 0 500.0 5.0
2000
-2
0 -4 0.0 0.0
FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY15 FY16 FY17 FY18 FY19 FY20E FY21E

Sales (| c rore ) Sales gro wth (%) EBITDA (| crore) EBITDA Margins

Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company

Exhibit 7: Raw material, adex trend over years Exhibit 8: PAT growth trend

60.0 48.9 49.9 49.6 50.5 50.2 50.1 2000.0 16.6 16.8 1753.8 20.0
47.7 1800.0 1584.1 18.0
50.0 1600.0 1357.7 1446.3 16.0
1400.0 1251.2 1280.3 14.0
40.0 1071.1 10.7
1200.0 9.5 12.0
30.0 1000.0 10.0
800.0 6.0 6.5 8.0
20.0 14.4 2.3
9.8 8.4 7.8 7.1 8.0 8.0 600.0 6.0
10.0 400.0 4.0
200.0 2.0
0.0 0.0 0.0
FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY15 FY16 FY17 FY18 FY19 FY20E FY21E

RM Cost to Sales Ad ex to Sa les PAT (| cro re) PAT growt h (%)

Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

Exhibit 9: Valuation
Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE
(| cr) (%) (|) (%) (x) (x) (%) (%)
FY18 7748.3 0.6 7.7 6.0 55.1 46.4 23.8 26.2
FY19 8533.1 10.1 8.2 6.2 51.9 42.9 25.7 29.6
FY20E 9492.0 11.2 9.0 9.5 47.4 38.7 23.6 27.6
FY21E 10448.7 10.1 9.9 10.7 42.8 34.8 24.0 28.1
Source: Company, ICICI Direct Research

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 Result Update | Dabur India ICICI Direct Research

Exhibit 10: Recommendation History vs. Consensus

500 100.0
90.0
450 80.0
400 70.0
60.0
(|)

350 50.0

(%)
40.0
300 30.0
250 20.0
10.0
200 0.0
Jun-16 Aug-16 Nov-16 Jan-17 Mar-17 May-17 Aug-17 Oct-17 Dec-17 Mar-18 May-18 Jul-18 Oct-18 Dec-18 Feb-19 May-19 Jul-19

Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICI Direct Research

Exhibit 11: Top 10 Shareholders

Rank Name Latest Filing Date % O/S Position (m) Change (m)
1 Chowdhry Associates 31-Mar-19 12.33 217.9 0.0
2 VIC Enterprises Pvt. Ltd. 31-Mar-19 12.32 217.7 0.0
3 Gyan Enterprises Pvt. Ltd. 31-Mar-19 11.44 202.2 0.0
4 Puran Associates Pvt. Ltd. 31-Mar-19 10.71 189.2 0.0
5 Ratna Commercial Enterprises Pvt. Ltd. 16-May-19 8.92 157.6 0.2
6 Milky Investment & Trading Co., 31-Mar-19 6.01 106.1 0.0
7 Burmans Finvest Pvt. Ltd. 31-Mar-19 3.00 53.0 0.0
8 Life Insurance Corporation of India 31-Mar-19 2.18 38.5 0.0
9 ARISAIG Partners (Asia) Pte. Ltd. 31-Mar-19 1.59 28.0 -0.1
10 M B Finmart Pvt. Ltd. 31-Mar-19 1.50 26.5 0.0
Source: Reuters, ICICI Direct Research

Exhibit 12: Recent Activity

Buys Sells
Investor name Value Shares Investor name Value Shares
Mirae Asset Global Investments (India) Pvt. Ltd. 11.93m 2.10m First State Investments (HK) Ltd. -13.68m -2.32m
Principal Asset Management Berhad 6.29m 1.10m Mirae Asset Global Investments (Hong Kong) Limited -7.76m -1.36m
Columbia Threadneedle Investments (US) 5.18m 0.89m Tata Asset Management Limited -5.11m -0.90m
PGGM Vermogensbeheer B.V. 5.12m 0.83m Kotak Mahindra Asset Management Company Ltd. -3.56m -0.63m
Norges Bank Investment Management (NBIM) 5.10m 0.82m ICICI Prudential Asset Management Co. Ltd. -3.32m -0.57m
Source: Reuters, ICICI Direct Research

Exhibit 13: Shareholding Pattern

(in %) Jun-18 Sep-18 Dec-18 Mar-19 Jun-19
Promoter 67.9 67.9 67.9 67.9 67.9
FII 17.7 18.2 18.2 18.2 17.8
DII 8.0 6.9 6.9 6.7 7.0
Others 6.4 7.1 7.0 7.2 7.3
Source: Company, ICICI Direct Research

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 Result Update | Dabur India ICICI Direct Research

Financial summary

Exhibit 14: Profit and loss statement | crore Exhibit 15: Cash flow statement | crore
(Year-end March) FY18 FY19 FY20E FY21E (Year-end March) FY18 FY19 FY20E FY21E
Net Sales 7, 748. 3 8, 533. 1 9, 492. 0 10, 448. 7 Profit before Tax 1,693.1 1,723.9 1,979.7 2,192.3
Growth (%) 0.6 10.1 11.2 10.1 Add: Depreciation 162.2 176.9 196.9 208.4
Raw Material Expenses 3,846.4 4,309.0 4,766.4 5,230.0 (Inc)/dec in Current Assets -378.8 -124.4 -356.2 -415.0
Employee Expenses 792.8 937.9 977.7 1,076.2 Inc/(dec) in CL and Provisions 85.8 225.9 -109.8 207.6
Marketing Expenses 606.7 608.3 759.4 835.9 Others -508.8 -300.1 -342.1 -382.6
Administrative Expenses 572.4 0.0 702.4 773.2 CF from operating activities 1, 053. 5 1, 702. 2 1, 368. 5 1, 810. 7
Other expenses 312.6 938.2 360.7 397.0 (Inc)/dec in Investments -583.7 373.3 -350.0 -350.0
Total Operating Expenditure 6,130.9 6,793.5 7,566.6 8,312.4 (Inc)/dec in Fixed Assets -200.3 -172.3 -220.0 -220.0
EBITDA 1, 617. 4 1, 739. 6 1, 925. 4 2, 136. 3 Others 243.7 0.0 0.0 0.0
Growth (%) 7.2 7.6 10.7 11.0 CF from investing activities -540. 2 201. 0 -570. 0 -570. 0
Depreciation 162.2 176.9 196.9 208.4 Issue/(Buy back) of Equity 0.0 0.5 0.0 0.0
Interest 53.1 59.6 53.9 55.9 Inc/(dec) in loan funds -54.5 -336.6 -100.0 -100.0
Other Income 305.2 296.2 305.1 320.3 Dividend paid & dividend tax -396.3 -883.2 -1,148.1 -1,148.1
PBT 1,692.9 1,723.9 1,979.7 2,192.3 Others -123.5 -59.6 -53.9 -55.9
Others 14.5 75.3 0.0 0.0 CF from financing activities -574. 4 -1, 278. 8 -1, 302. 0 -1, 304. 0
Total Tax 335.4 278.6 395.9 438.5 Net Cash flow -25.6 624.4 -503.1 -63.3
PAT 1, 357. 7 1, 446. 3 1, 584. 1 1, 753. 8 Opening Cash 115.8 89.2 713.6 210.5
Growth (%) 6.0 6.5 9.5 10.7 Miscellaneous adjustments 216.9 216.9 216.9 216.9
Adjusted EPS (|) 7.7 8.2 9.0 9.9 Closing Cash 306. 1 328. 2 427. 3 364. 0
Source: Company, ICICI Direct Research *calculated, Source: Company, ICICI Direct Research

Exhibit 16: Balance sheet | crore Exhibit 17: Key ratios | crore
(Year-end March) FY18 FY19 FY20E FY21E (Year-end March) FY18 FY19 FY20E FY21E
L iabilities Per share data (|)
Equity Capital 176.2 176.6 176.6 176.6 Adjusted EPS 7.7 8.2 9.0 9.9
Reserve and Surplus 5,530.4 5,455.1 6,529.5 7,135.2 Cash EPS 8.6 9.2 10.1 11.1
Total Shareholders funds 5,706.5 5,631.7 6,706.1 7,311.8 BV 32.4 31.9 38.0 41.4
Long Term Loans 368.6 30.6 30.6 30.6 DPS 3.5 5.0 6.5 6.5
Long Term Provisions 109.1 23.1 23.1 23.1 Cash Per Share 1.7 1.9 2.4 2.1
Minority Interest / Others 83.1 90.9 90.9 90.9 Operating Ratios (%)
Total L iabilities 6, 267. 3 5, 776. 3 6, 850. 7 7, 456. 5 PBITDA Margin 20.9 7.6 20.3 20.4
As s ets PBT / Total Operating income 18.1 17.6 17.6 17.9
Gross Block 3,074.6 3,224.6 3,424.6 3,624.6 PAT Margin 17.5 16.9 16.7 16.8
Less: Acc Depreciation 1,046.5 1,223.4 1,420.3 1,628.7 Inventory days 50 51 52 53
Net Block 2,028.1 1,969.1 2,004.3 1,995.9 Debtor days 35 35 37 38
Capital WIP 41.5 63.8 83.8 103.8 Creditor days 55 49 48 48
Non- Current Investments 3,091.8 2,633.4 2,933.4 3,233.4 Return Ratios (%)
LT loans & advances 19.0 17.6 117.6 217.6 RoE 23.8 25.7 23.6 24.0
Other Non-current Assets 81.5 166.7 216.7 266.7 RoCE 26.2 29.6 27.6 28.1
Current Assets RoIC 23.2 27.3 26.5 27.4
Inventory 1,256.2 1,300.5 1,371.1 1,538.3
Debtors 706.1 833.6 975.6 1,102.9 Valuation Ratios (x)
Cash & Bank 306.1 328.2 427.3 364.0 P/E 55.1 51.9 47.4 42.8
ST Loans & Advances 34.9 11.0 4.7 5.2 EV / EBITDA 46.4 42.9 38.7 34.8
Other Current Assets 1,136.6 1,112.9 1,262.9 1,382.9 EV / Net Sales 9.7 8.8 7.8 7.1
Current Liabilities Market Cap / Sales 9.6 8.7 7.9 7.1
Creditors 1,410.3 1,455.4 1,265.6 1,393.2 Price to Book Value 13.1 13.3 11.2 10.3
ST Borrowings 464.5 498.2 518.2 538.2 Solvency Ratios
Other CL 559.6 706.7 766.7 826.7 Debt/EBITDA 0.5 0.3 0.3 0.3
Net Current Assets 1,005.3 925.9 1,491.1 1,635.3 Debt / Equity 0.1 0.1 0.1 0.1
Miscellaneous Expenditure 0.0 0.0 4.0 4.0 Current Ratio 1.6 1.5 1.8 1.8
Total As s ets 6, 267. 2 5, 776. 3 6, 850. 7 7, 456. 5 Quick Ratio 1.0 0.9 1.1 1.1
Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

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 Result Update | Dabur India ICICI Direct Research

Exhibit 18: ICICI Direct coverage universe (FMCG)

CMP TP M Cap EPS (|) P/E (x) Price/Sales (x) RoCE (%) RoE (%)
Sector / Company
(|) (|) Rating (| Cr) FY19E FY20E FY21EFY19E FY20EFY21EFY19E FY20E FY21EFY19E FY20E FY21E FY19E FY20E FY21E
Colgate (COLPAL) 1,175 1,250 Hold 32,774 28.5 30.9 33.8 41.2 38.1 34.8 7.4 6.8 6.2 70.7 71.6 71.0 52.2 50.7 50.1
Dabur India (DABIND) 425 500 Buy 74,651 8.2 9.0 9.9 51.9 47.4 42.8 8.7 7.9 7.1 29.6 27.6 28.1 25.7 23.6 24.0
GSK CH (GLACON) 7,245 8,340 Buy 30,028 166.5 233.7 244.1 43.5 31.0 29.7 6.9 6.3 5.8 29.8 36.1 33.4 20.1 24.0 22.8
Hindustan Unilever (HINLEV) 1,680 1,900 Hold 378,000 28.5 32.9 37.9 58.9 51.1 44.3 9.9 8.7 7.6 100.8 123.7 162.3 87.2 106.9 141.3
ITC Limited (ITC) 266 340 Buy 352,275 10.3 11.3 12.6 25.9 23.6 21.1 7.9 7.2 6.6 30.8 32.7 33.3 21.5 22.2 22.6
Jyothy Lab (JYOLAB) 158 220 Buy 6,181 5.3 5.9 6.7 29.7 26.6 23.6 3.5 3.1 2.8 28.6 30.1 31.7 22.6 22.5 23.7
Marico (MARLIM) 365 425 Buy 46,963 8.8 8.7 9.8 41.5 42.1 37.4 6.4 5.5 4.9 38.0 42.6 41.7 31.6 35.8 34.6
Nestle (NESIND) 11,360 12,000 Buy 100,277 166.7 199.7 238.9 68.2 56.9 47.6 8.9 8.0 7.0 42.9 44.5 47.6 45.6 45.9 47.0
Tata Global Bev (TATGLO) 253 250 Buy 12,622 7.2 7.9 8.7 34.9 32.1 29.0 1.7 1.7 1.6 8.4 9.1 9.5 6.5 7.2 7.6
VST Industries (VSTIND) 3,200 3,900 Hold 5,348 146.9 164.4 178.8 21.8 19.5 17.9 4.9 4.4 4.0 51.4 51.1 50.3 34.2 34.4 33.9
Varun Beverage (VARBEV) 900 1,040 Hold 17,530 11.7 16.4 18.6 76.8 54.8 48.3 4.4 3.4 2.5 12.7 14.2 13.3 12.1 15.0 11.0
Source: Company, ICICI Direct Research

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 Result Update | Dabur India ICICI Direct Research

RATING RATIONALE
ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,
Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined
as the analysts' valuation for a stock

Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Direct Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

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 Result Update | Dabur India ICICI Direct Research

ANALYST CERTIFICATION
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accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is
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ICICI Securities | Retail Research 9