Dabur India Posts Decent Q3FY13 Numbers
Shailendra Lotlikar / 30 Jan 2013
Though slightly below expectations, Dabur has come up with a good set of numbers for the December quarter of 2012. It remains among our bullish counters and one could look at entering the scrip in a staggered manner
Dabur India, today, came out with a decent set of December 2012 quarter numbers. Net Sales of the company increased by 12.26% to Rs 1631 crore (which was majorly driven by volume) while the net profit grew by 22% to Rs 211 crore on a YoY basis. The topline was slightly below the streets expectations of Rs 1730 crore while its net profit exceeds the streets expectations of Rs 205 crore for the quarter. The stock closed the day lower by 1% to Rs 129.70 per share.
The raw material expense increased marginally by 9% to Rs 612 crore, however, the raw material to sales ratio declined by 100 basis points to 37.43%, which is a good sign for the company. We had earlier stated that the companys in the FMCG space are bound to benefit from the softening of the raw material prices.
Advertisement expenses for the company increased by 18.57% to Rs 235 crore and the ratio of advertisement to sales too increased by 76 basis points to 14.37% which is due to festive season in the quarter.
One should note that Dabur India has been aggressive on the advertisement front, and the ratio is also one of the highest in the industry. We continue to believe that more spend on advertisement front would help companies in creating brand awareness of their various products.
For the Dec 2012 quarter, the company’s EBITDA increased by 19% to Rs 274.51 crore and the EBITDA margin also expanded by 93 basis points to 16.78% on a YoY basis, which is commendable. The company’s consumer care business, which accounts for 87% of the total revenue, grew by 12% to Rs 1413 crore while profit from the same segment grew by 20% to Rs 323.59 crore on a YoY basis.
On the valuation front, Dabur India is currently available at 32x of FY13E EPS of Rs 4 per share which we believe is fairly valued. We continue to remain bullish over the counter and would ask our readers to invest in a staggering manner in the scrip keeping in mind long term horizon to garner better returns.
Dabur India Consolidated December Quarter Numbers of 2012
| Particulars | Dec-12 | Dec-11 | % Change |
|---|---|---|---|
| Net Sales | 1,630.72 | 1,452.68 | 12.26 |
| Other Operating Income | 5.26 | 4.60 | 14.35 |
| Total Income From Operations | 1,635.98 | 1,457.28 | 12.26 |
| Increase/Decrease in Stocks | 177.33 | 195.56 | (9.32) |
| Consumption of Raw Materials | 612.41 | 560.05 | 9.35 |
| Advertisement Expense | 235.05 | 198.24 | 18.57 |
| Other Expenses | 208.11 | 185.16 | 12.39 |
| Operating Profit | 274.51 | 230.94 | 18.87 |
| Depreciation | 30.52 | 23.85 | 27.97 |
| Interest | 7.78 | 18.29 | (57.46) |
| Tax | 47.75 | 33.69 | 41.73 |
| Net Profit/(Loss) | 211.11 | 172.82 | 22.16 |
| Diluted EPS | 1.20 | 0.99 | 21.21 |
| Ratios (%) | Dec-12 | Dec-11 | Change BPS |
| Raw material to sales | 37.43 | 38.43 | (1.00) |
| Advertisement Exp to sales | 14.37 | 13.60 | 0.76 |
| Operating Margin | 16.78 | 15.85 | 0.93 |
| Net Profit Margin | 12.90 | 11.86 | 1.05 |
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