Result Update

July 28, 2016

Rating matrix
Rating
Target
Target Period
Potential Upside

:
:
:
:

Dabur India (DABIND)

Buy
| 338
12 months
11%

Safe bet on natural consumer business

Whats changed?
Target
EPS FY17E
EPS FY18E
Rating

Changed from | 304 to | 338

Changed from | 7.9 to | 8.0
Changed from | 8.6 to | 9.4
Unchanged

Quarterly performance
Sales
EBITDA
EBITDA (%)
PAT

Q1FY17
1923.9
344.3
17.9
292.8

Q1FY16 YoY (%)

1901.7
1.2
315.7
9.1
16.6 130 bps
261.8
11.8

Q4FY16 QoQ (%)

1980.0
-2.8
411.2
-16.3
20.8 -287 bps
331.5
-11.7

Key financials
| Crore
FY15
FY16
FY17E
FY18E
Net Sales
7,806.4
7,761.6
8,579.3
9,536.4
EBITDA
1,316.4
1,518.3
1,711.4
1,990.9
Net Profit
1,071.1
1,251.2
1,407.9
1,646.7
EPS (|)
6.1
7.1
8.0
9.4
*From FY16 onwards, financials are reported as per Ind AS

Valuation summary
FY15
FY16
FY17E
P/E
49.9
42.7
38.0
Target P/E
55.4
47.5
42.2
Div. Yield
0.8
0.8
1.0
Mcap/Sales
6.8
6.9
6.2
RoNW (%)
31.9
30.2
27.9
RoCE (%)
31.8
31.1
29.7
*From FY16 onwards, financials are reported as per Ind AS

FY18E
32.5
36.1
1.4
5.6
27.7
29.9

Stock data
Particular
Market Capitalization (| Crore)
Total Debt (FY16) (| Crore)
Cash and Investments (FY16) (| Crore)
EV (| Crore)
52 week H/L
Equity capital
Face value

Amount
51,641.1
668.0
954.9
51,354.2
320 / 232
| 175.9 Crore
|1

Price performance
Dabur
Marico
GCPL
HUL

1M
-3.4
8.3
5.7
5.1

3M
13.0
11.2
17.9
1.2

| 304

6M
29.8
30.1
40.6
17.7

12M
3.8
30.2
32.5
0.3

Research Analyst
Sanjay Manyal
sanjay.manyal@icicisecurities.com
Parth Joshi
parth.joshi@icicisecurities.com

ICICI Securities Ltd | Retail Equity Research

Dabur reported muted numbers on the sales front for Q1FY17 with
growth of 1.2% YoY to | 1923.9 crore whereas operational
performance came in ahead of our expectations. The underlying
volume growth stood at 4.1%. Adjusting for the impact of Ind AS, net
sales came in at | 2102.7 crore (I-direct estimate: | 2264 crore)
The domestic business grew by 0.5% YoY led by growth of 11.6%,
4.3%, 2% growth in oral care, foods & home care segments,
respectively. However, skin care, digestives, OTC, hair care
segments witnessed a subdued performance. Health supplements
reported volume growth of 6.7% but flattish sales growth
EBITDA margins improved 130 bps to 17.9% (I-direct estimate:
16.2%) mainly due to judicious A&P (down 161 bps as percentage of
sales) & soft input costs (down 106 bps as percentage of sales).
However, higher employee cost partially offset the above savings
PAT increased 11.8% YoY to | 292.8 crore (I-direct estimate: | 300.3
crore) aided by higher EBITDA & 27.8% YoY increase in other income
to | 61 crore
Presence in niche categories to aid in steady revenue growth
Dabur India (DIL) has a strong portfolio of brands (Dabur Chyawanprash,
Real, Hajmola, Vatika, Amla, Fem, Honey, Meswak, Dabur Red) with the
focus largely on ayurvedic & healthcare offerings. The companys diverse
product portfolio (hair care, oral care, skin care, home care, health
supplements, digestives, OTC & ethicals) and presence in niche
categories has aided revenue growth at a robust 18.6% CAGR in FY09-15.
Led by DILs brand strength in higher growth niche segments & further
strengthening of the portfolio through new launches focusing on
healthcare, we estimate revenue growth at 10.8% CAGR in FY16-18E.
Direct beneficiary of normal monsoon with strong presence in rural areas
In the last few years (FY11-15), DIL has augmented its rural reach from
~14,000 villages to ~45,000 villages through its Project Double. The
initiative played out extremely well for DIL by increasing contribution to
booming rural demand in revenues to 45% from ~30% earlier. It also
aided in maintaining volume growth at 8-11%. Going forward, it intends
to reach ~60000 villages by FY17E. With monsoons progressing in a
normal manner, we expect DIL to capitalise on a revival in rural
consumption as a result of this presence in rural India. Also, with DIL
planning to increase its healthcare offerings, it is aiming to increase its
urban coverage by capturing the untapped chemist network through a
new initiative called Project CORE. It has increased its chemist network
reach from ~31000 (FY13) to ~75000 in FY15.
Quarterly blip does not impact long term growth potential; maintain BUY
Since its inception, DIL has efficiently leveraged ayurveda & herbal
product offerings to its advantage. DILs portfolio of traditional products,
the category that has piqued consumer interest in recent times, straddles
from Meswak, premium herbal toothpaste, to recently launched Hajmola
Yoodley, an ethnic beverage to capture fast growing segment of
traditional beverages. Thus, we believe DIL is in a healthy position to
capitalise on tailwinds generated for demand of ayurvedic & herbal
products in the Indian FMCG market. We expect DIL to clock sales growth
of 10.8% CAGR in FY16-18E on the back of ~8% volume growth. We
estimate earnings CAGR of 14.7% in FY16-18E. We reiterate BUY
recommendation on the stock with a target price of | 338/share.

Result Update
Variance analysis
Q1FY17 Q1FY17E Q1FY16 YoY (%) Q4FY16 QoQ (%)
1,923.9
2,264.0 1,901.7
1.2 1,980.0
-2.8

Net Sales

Comments
Dabur reported tepid net sales growth of 1.2% on the back of 4.1% volume
growth in its India FMCG business. Oral care, foods & home care segment
grew 11.6%, 4.3% & 2%, respectively. Foods business reported volume
growth of 7% while health supplements' volumes grew 6.7% but sales came
in flat. Skin care, digestives & OTC segments reported a decline in sales

Operating Income

4.5

4.7

5.4

-15.8

4.0

13.9

Raw Material Expenses

937.6

1,053.6

946.9

-1.0

968.4

-3.2

Employee Expenses
SG&A Expenses
Other operating Expenses

211.5
196.5
234.0

210.6
335.1
229.8

189.0
224.7
225.4

11.9
-12.5
3.8

201.8
154.0
244.6

4.8
27.6
-4.3

EBITDA
EBITDA Margin (%)
Depreciation
Interest
Other Income

344.3
17.9
34.3
11.8
61.0

367.0
16.2
35.9
12.2
61.4

315.7
9.1
16.6 130 bps
32.5
5.6
11.8
0.2
47.7
27.8

411.2
-16.3
20.8 -287 bps
35.8
-4.1
13.2
-10.3
53.9
13.3

PBT
Tax Outgo
PAT

363.7
70.1
292.8

385.0
84.7
300.3

324.4
62.0
261.8

420.1
86.8
333.3

Key Metrics YoY growth (%)

Volume Growth
Standalone sales growth

4.1
0.5

NA
8.0

8.1
10.5

7.0
9.1

Subsidiary's sales growth

6.0

13.1

11.3

15.6

12.1
13.1
11.8

-13.4
-19.2
-12.1

Raw material cost for the company dipped 106 bps as a percentage of sales
due to benign commodity prices
Employee cost increased 105 bps as percentage of sales
A&P spend declined 161 bps as percentage of sales

Operating margins improved 130 bps mainly due to lower A&P

Higher EBITDA as well as higher other income drove PAT by 11.8% YoY

Dabur Honey range was extended to premium honey fruit spreads priced at |
120-130 & | 240-270 for 170 gm & 370 gm, respectively. Real VOLO, a
carbonated fruit-based drink was launched at | 40 for 250 ml can. Mosambi
variant was added to Real fruit juice range while mixed fruit variant was
added to Real Activ range
Dermoviva facial fluids, Dermoviva body lotion, Dermoviva face cream &
Hazmazza saw addition of variants in Q1FY17

Source: Company, ICICIdirect.com Research

Change in estimates
(| Crore)
Sales
EBITDA
EBITDA Margin (%)
PAT
EPS (|)

Old
9,366.6
1,666.0
17.8
1,390.4
7.9

FY17E
New % Change
8,579.3
-8.4
1,692.4
1.6
19.7 194 bps
1,407.9
1.3
8.0
1.3

Old
10193.9
1821.6
17.9
1509.7
8.6

FY18E
New % Change
Comments
9536.4
-6.4 We have incorporated impact of Ind AS in our sales & margins estimates
1971.0
8.2
20.7 280 bps
1646.7
9.1
9.4
9.1

Source: Company, ICICIdirect.com Research

Assumptions

Std. Sales (| crore)

Volume Growth (%)
Subs. Sales (| crore)
RM exp. To sales %
Adex to sales %
Interest Cost (| crore)

FY14 FY15E
4,860.4 5,418.9
9.3
8.0
2,207.9 2,387.5
48.1
14.1
54.2

47.7
14.4
40.1

Current
FY16E
5,329.7
NA
2,431.9

FY17E
5,824.3
NA
2,755.1

FY18E
6,427.2
NA
3,109.2

FY16E
5,739.6
NA
2,696.3

Earlier
FY17E
6,241.7
NA
3,124.9

FY18E
6,769.3
NA
3,424.6

48.4
9.9
48.5

48.4
9.9
49.0

48.9
10.5
46.5

45.0
14.7
48.0

45.9
14.4
49.0

46.6
14.8
47.4

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 2

Result Update

Company Analysis
Revenue growth to remain stable largely led by volumes & initiatives
DILs revenue growth has remained robust at 18.6% CAGR (FY09-15)
buoyed by its diverse & niche product portfolio, a slew of product
launches and synergistic inorganic acquisitions (Fem in FY09, Namaste in
FY11, Hobi in FY11) both in the domestic as well as international markets.
Even in a slowing consumer demand scenario from H2FY13, DIL
managed to maintain its healthy revenue growth of 12-16% led by
volume growth of 8-11% until Q2FY16. The slowdown, however, largely
impacted the companys hair oil (segment as a whole witnessing
stagnation in growth) & skin care growth (impacted by lower discretionary
demand). Of late, there was intense competition in health supplements
(Dabur Chyawanprash, Dabur Honey) mainly due to entry of Patanjali
(while keeping the oral care (Meswak & Dabur Red), home care (Odonil,
Odomos), foods (Real, Real Activ), digestive (Hajmola) and OTC & ethicals
portfolio growth healthy.
DIL launched Project 50:50 in FY15 wherein it will focus on top 130 cities
in India that contribute 50% of urban consumption to drive revenues.
Under this initiative, Dabur will split the sales team for wholesale & retail
channels to better tap the demand in urban markets. According to the
company, most of these cities are in South India, which contribute 1520% of total revenue for Dabur. Dabur launched Project LEAD in FY16
under which front-end teams will be separated for healthcare & other
domestic FMCG business to enable better focus on these segments. For
this purpose, DIL would hire ~275 medical representatives. DIL expects
annual cost of ~| 10-12 crore towards Project LEAD.
Dabur forayed into the ayurvedic hair oil segment with the launch of
Keratex (previously a pharma product but now an OTC product) in FY15.
DIL launched Dabur Honey fruit spread (four variants), carbonated fruitbased beverage Real VOLO, additional variants under Real & Real Activ
fruit juices in domestic market & additional variants under Dermoviva
facial fluids, body lotion, face cream & under Hazmazza in international
markets in Q1FY17. Riding on the back of promotions, DILs entry into
honey fruit spreads is expected to drive premiumisation in the honey
segment and hence, combat an indigenous rival that has entered honey
category with deep discount pricing model. Going ahead, we believe the
companys increasing focus on innovations and strengthening presence
both in rural and urban India would aid volumes. We expect revenue
growth at 10.8% CAGR in FY16-18E, largely led by volumes.
Exhibit 1: Revenues (| crore) and revenue growth (%) trend
12000
10000

35

30.1

30
20.9

8000

25

20.3
15.9

20

15.1
10.5

10.4

6000

11.2

10

4000
2000
0

-0.6
3390.5

4077.4

5305.4

6146.7

7073.2

7806.4

7761.6

8579.3

9536.4

FY10

FY11

FY12

FY13

FY14

FY15

FY16E

FY17E

FY18E

Sales (| crore)

Sales growth (%)

Source: Company, ICICIdirect.com Research

*From FY16 onwards, financials are reported as per Ind AS

ICICI Securities Ltd | Retail Equity Research

15

Page 3

0
-5

Result Update

Exhibit 2: Category wise revenue growth in percentage (YoY)

Hair Care
Oral Care
Health Supp.
Digestives
Skin Care
Home Care
Foods
OTC & Ethicals
Retail

Q3FY13Q4FY13
13.9
9.6
13.6
12.3
12.0
22.6
-5.4
1.3
15.7
11.1
30.5
33.3
22.2
22.6
15.6
13.7
32.8
28.5

FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14

11.7
11.8
3.9
7.0
6.0
10.4
8.6
18.8
10.4
17.3
16.2
7.5
16.7
19.5
17.6
3.9
15.2
12.0
17.7
23.3
15.3
13.3
17.5
13.4
10.1
25.3
25.6
25.1
16.0
12.8
24.5
18.7
22.0
17.6
20.6
16.1
11.8
11.2
13.2
10.9
43.9
27.1
17.7
14.7
20.4

FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15

7.1
8.4
10.2
12.1
7.4
13.8
8.0
8.1
11.3
11.6
16.4
21.6
10.1
13.5
13.0
17.2
11.3
12.3
11.6
11.0
13.2
4.4
9.7
4.0
16.6
19.8
14.7
10.2
16.2
12.1
19.7
21.6
29.0
11.8
19.6
11.8
4.4
7.5
8.8
7.7
19.6 NA
NA
NA
NA

FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17

10.3
12.7
9.4
2.0
8.2
NA
9.8
17.5
18.7
10.5
18.3
11.6
13.9
1.2
9.0
-7.1
NA
NA
11.5
1.7
1.6
-2.4
6.5
NA
8.3
5.2
2.2
9.5
NA
NA
13.2
12.0
12.4
8.4
19.3
2.0
20.2
15.5
2.4
-23.7
11.7
4.3
7.3
16.7
10.8
7.5
7.1
NA
NA
NA
NA
NA
NA
NA

Source: Company, ICICIdirect.com Research

EBITDA margins to remain healthy at 20.7% by FY18E

DILs margins have remained at higher levels of 16-18% since FY08 led by
the companys strong brand equity in the healthcare space of the FMCG
segment. Along with a changing sales mix (more towards the products
witnessing constant demand than seasonal demand), Dabur has
efficiently managed its raw material expenses and marketing expenses in
order to sustain its margins. Going ahead, with continued focus on the
healthcare portfolio, aggressive expansion through new launches,
expansion in reach & change in sales mix, we believe margins would
remain sturdy at 20.7% by FY18E. We believe that aided by the
companys ability to sustain a high brand equity in its segments,
fluctuations in raw material cost, if any, will be absorbed efficiently
without impacting margins. However, we believe that any savings in raw
material costs would be directed towards higher advertisement &
promotion expenses.
Exhibit 3: EBITDA margin (%), RM cost to sales (%) and adex to sales (%) trend
60
50

16.6

18.6

18.5

17.4

16.8

40

19.3

18.5
16.5

17.0

14.1

15.4

16.3

16.4

14.3

16.0

19.7

20.7

25
20

16.6

15

30
10

20
10

0
FY09

FY10

FY11

FY12

Q1FY13 Q2FY13 Q3FY13 Q4FY13

RM Cost to Sales

FY13

Q1FY14 Q2FY14 Q3FY14 Q4FY14

EBITDA Margins

FY14

FY15

FY16

FY17E

FY18E

Adex to Sales

Source: Company, ICICIdirect.com Research

*From FY16 onwards, financials are reported as per Ind AS

ICICI Securities Ltd | Retail Equity Research

Page 4

Result Update
Expansion in distribution network to augur well for future
DIL has efficiently expanded its distribution network in rural India through
Project Double since FY11. Through Project Double, the company
expanded its reach from ~14000 villages in FY11 to ~45000 villages in
FY15. The extension in rural India paid off well for the company in
capturing booming rural demand in India in FY11-14. With initial signs of
softening rural demand following a weak economic scenario and slow
urban demand recovery, going ahead, the company limited its rural reach
since FY14, and now plans to consolidate its position further. It plans to
increase the number of SKUs in existing rural distribution centres and
increase its offerings in existing rural markets along with a few new
launches.
Dabur plans to extend its rural reach to ~60,000 villages by FY17E. On the
urban front, DIL is aiming to increase its presence in the chemist channels
of distribution considering the healthcare focus of the companys
portfolio. Following the target to increase chemist coverage, DIL launched
Project CORE Chemist Outlet and Range Expansion in FY14. Further,
the company increased its chemist distribution points from ~31,000
outlets (FY13) to ~75,000 outlets in FY15.
Dabur launched Project LEAD Leveraging through Empowered
Anchoring & Detailing in Q1FY16 under which the front end teams will be
separated for healthcare (OTC & ethicals) and other domestic FMCG
business to enable better focus on these segments. With DILs strength of
implementation, we believe the companys constant focus on managing
sales and distribution efficiently in both urban and rural markets along
with a strong innovation pipeline, revenue and margin growth would
continue to remain stable.
Ayurveda, herbal products remain ace up Daburs sleeve
Dabur, having been present in India for more than 125 years, has built its
strong edifice by leveraging on Ayurveda & herbal product offerings. The
recent rise of Patanjali Ayurveda has been able to garner public attention
towards herbal offerings & products of Ayurvedic origin. Though it has
resulted in disruptive competition in many categories in which the
company is present, we believe Dabur is well equipped with its array of
brands with high consumer recall to counter its rivals. DILs portfolio of
traditional products, the category that has piqued consumer interest in
recent times, straddles from Meswak, a premium toothpaste under the
herbal segment, to the recently launched Hajmola Yoodley, an ethnic
beverage to capture the fast growing segment of traditional beverages.
Thus, we believe that on the back of strong brand equity enjoyed by its
products, DIL is in a healthy position to capitalise on the tailwinds
generated for demand of Ayurvedic & herbal products in the Indian FMCG
market due to the Patanjali phenomenon.

ICICI Securities Ltd | Retail Equity Research

Page 5

Result Update

Outlook & valuation

We believe DILs strong and niche product portfolio would continue to
generate stable revenue and earnings growth at 10.8% and 14.7% CAGR
in FY16-18E. Further, the increase in distribution expansion and constant
innovation would be catalysed if there is a revival in consumer demand.
We believe that given the diverse product portfolio, the companys
margins would remain sustainable and less prone to fluctuations in raw
material prices. Hence, we remain positive on the long term outlook of
the company.
The only concern for us remains the challenging near term consumer
demand scenario. However, the progress of monsoon as per
expectations and other government measures to kick start rural growth
engine remain key triggers to a rural demand revival in the medium-term.
Successful resolution of the Nepal border blockade issue has relieved DIL
of the hiccups it faced in sales growth in FY16. We believe that
continuous innovation to counter moderating growth and aggressive
expansion in distribution network would lead to stable volume growth,
going forward.
We believe sales growth in the domestic business would revive, going
forward and expect robust margins at 20.7% by FY18E. Given DILs
strong brands & market development of the niche segments (packaged
foods & juices, health supplements) and revival in urban demand,
valuation multiples will command a premium to its historic averages. We
value the stock at 36x FY18E EPS of | 9.4 and arrive at a target price of
| 338. We maintain BUY recommendation.
Exhibit 4: Valuations

FY15
FY16
FY17E
FY18E

Sales Growth
(| cr)
(%)
7806.4
10.4
7761.6
-0.6
8579.3
10.5
9536.4
11.2

EPS Growth
(|)
(%)
6.1
15.7
7.1
16.6
8.0
12.5
9.4
17.0

PE EV/EBITDA
(x)
(x)
49.9
41.5
42.7
35.9
38.0
31.9
32.5
27.2

RoNW
(%)
31.9
30.2
27.9
27.9

Source: Company, ICICIdirect.com Research

*From FY16 onwards, financials are reported as per Ind AS

ICICI Securities Ltd | Retail Equity Research

Page 6

RoCE
(%)
31.8
31.1
29.7
30.1

Result Update

100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0

400

(|)

300

200

100
Jul-14

Sep-14

Dec-14
Price

Feb-15

May-15

Idirect target

Jul-15

Oct-15

Consensus Target Mean

Dec-15

Mar-16

May-16

(%)

Recommendation history vs. Consensus

Jul-16

% Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research

Key events
Date
Nov-08
Jul-09
Apr-10
Jul-10
Sep-10
Jan-11
Mar-11
May-12
May-13
Mar-14
Jun-15

Event
Acquisition of the company's largest skin care brand 'Fem' from Fem Care Pharma marking its entry in the high growth skin care segment
Rise in stock price following the increase in FMCG Index led by attractiveness of defensives in the economic downturn
Consistent 18-20% revenue growth with improvement in margins to ~20% tapping the revival in consumption demand
Enters Turkey through acquisition of Hobi Kozmetik for | 324 crore. Acquisition is in line with the company's strategy of strengthening its presence in Middle East &
North Africa
Dabur issues bonus in the ratio of 1:1
Acquires US based personal care firm Namaste Laboratories LLC for | 451 crore. Acquisition marked Dabur's entry into US$1.5 billion hair care markets of US,
Europe and Africa
Launches 'Project Double' to double its direct reach in villages and to tap the growing aspirational demand of rural consumers
Stock performance remaines lacklusture due to falling domestic revenues, declining margins and no significant innovations
In a grim economic scenario, ability to grow in double digits (volume) along with improvement in margins and market share gains across categories made it the top
preferred stock in the FMCG pack
Launches 'Project CORE' to increase its distribution footprint in the chemist channel
Launches 'Project LEAD' to enable better focus on healthcare (OTC & ethicals) & other domestic FMCG business

Source: Company, ICICIdirect.com Research

Top 10 Shareholders
Rank
1
2
3
4
5
6
7
8
9
10

Name
Chowdhry Associates
VIC Enterprises Pvt. Ltd.
Gyan Enterprises Pvt. Ltd.
Puran Associates Pvt. Ltd.
Ratna Commercial Enterprises Pvt. Ltd.
Milky Investment & Trading Co.,
Life Insurance Corporation of India
Burmans Finvest Pvt. Ltd.
Matthews International Capital Management, L.L.C.
First State Investments (HK) Ltd.

Shareholding Pattern
Latest Filing Date
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-16
31-Mar-15

% O/S Position (m) Change (m)

12.37
217.9
0.0
12.36
217.7
0.0
11.48
202.2
0.0
10.74
189.2
0.0
8.88
156.4
0.0
6.03
106.1
0.0
3.26
57.5
0.0
3.01
53.0
0.0
1.76
31.0
0.2
1.53
26.9
4.0

(in %)
Promoter
FII
DII
Others

Jun-15 Sep-15 Dec-15 Mar-16 Jun-16

68.2
68.1
68.1
68.1
68.0
21.1
21.0
20.4
19.6
19.9
4.6
4.4
4.7
5.5
5.4
6.1
6.5
6.8
6.8
6.7

Source: Reuters, ICICIdirect.com Research

Recent Activity
Buys
Investor name
APG Asset Management
KOWORLD LUX S.A.
Norges Bank Investment Management (NBIM)
Pictet Asset Management Ltd.
DNB Asset Management (Asia) Limited

Value
13.99m
9.41m
7.8m
4.75m
4.07m

Shares
3.34m
2.27m
1.86m
1.26m
0.94m

Sells
Investor name
Harding Loevner LP
Aberdeen Asset Management (Asia) Ltd.
Grantham Mayo Van Otterloo & Co LLC
Schroder Investment Management (Hong Kong) Ltd.
Handelsbanken Asset Management

Value
-19.97m
-16.1m
-5.79m
-2.4m
-2.19m

Shares
-5.29m
-3.73m
-1.66m
-0.64m
-0.53m

Source: Reuters, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 7

Result Update

Financial summary
Profit and loss statement
(Year-end March)
Net Sales
Growth (%)
Raw Material Expenses
Employee Expenses
Marketing Expenses
Administrative Expenses
Other expenses
Total Operating Expenditure
EBITDA
Growth (%)
Depreciation
Interest
Other Income
PBT
Others
Total Tax
PAT
Growth (%)
Adjusted EPS (|)

| Crore
FY15
7806.4
10.4
3,720.1
689.6
1,124.4
679.7
297.1
6,510.8
1295.6
14.1
115.0
40.1
158.1
1,319.4
0.0
250.9
1071.1
16.6
6.1

FY16
7761.6
-0.6
3,760.5
794.1
771.6
0.0
935.2
6,261.4
1500.2
15.8
133.2
48.5
217.2
1,553.8
0.0
299.9
1251.2
16.8
7.1

FY17E
8579.3
10.5
4,150.1
883.7
849.4
0.0
1,003.8
6,886.9
1692.4
12.8
145.7
49.0
243.3
1,759.9
0.0
352.0
1407.9
12.5
8.0

FY18E
9536.4
11.2
4,665.6
892.2
900.8
0.0
1,106.7
7,565.4
1971.0
16.5
153.5
46.5
267.6
2,058.4
0.0
411.7
1646.7
17.0
9.4

Source: Company, ICICIdirect.com Research

*From FY16 onwards, financials are reported as per Ind AS

(Year-end March)
Profit before Tax
Add: Depreciation
(Inc)/dec in Current Assets
Inc/(dec) in CL and Provisions
Others
CF from operating activities
(Inc)/dec in Investments
(Inc)/dec in Fixed Assets
Others
CF from investing activities
Issue/(Buy back) of Equity
Inc/(dec) in loan funds
Dividend paid & dividend tax
Inc/(dec) in Sec. premium
Others
CF from financing activities
Net Cash flow
Opening Cash
Closing Cash

| Crore
FY15
1,319.4
115.0
-143.3
24.9
-268.8
1,047.2
-625.1
-251.1
0.0
-876.2
45.5
25.4
-394.8
0.0
-92.9
-416.8
-245.8
519.4
276.0

FY16
1,553.8
133.2
-615.9
51.4
-232.8
889.7
-378.0
-201.0
0.0
-578.9
0.3
126.8
-447.0
0.0
-48.5
-368.5
-57.7
276.0
218.3

FY17E
1,759.9
145.7
-381.1
42.9
-303.0
1,264.5
-110.0
-520.0
0.0
-630.0
0.0
-60.0
-527.7
0.0
-49.0
-636.7
-2.2
218.3
216.1

FY18E
2,058.4
153.5
-489.6
102.0
-365.2
1,459.2
-220.0
-120.0
0.0
-340.0
0.0
-120.0
-791.6
0.0
-46.5
-958.1
161.1
216.1
377.2

FY15

FY16

FY17E

FY18E

6.1
6.8
19.1
2.0
1.6

7.1
7.9
23.6
2.3
1.2

8.0
8.8
28.6
3.0
1.2

9.4
10.2
33.5
4.5
2.1

16.8
14.9
13.7
45
33
51

19.5
17.2
16.2
51
38
62

19.9
17.7
16.4
52
38
53

20.8
18.8
17.3
53
41
47

31.9
31.8
31.3

30.2
31.1
28.3

27.9
29.7
27.3

27.9
30.1
29.0

49.9
41.5
6.9
6.8
15.9

42.7
35.9
6.9
6.9
12.9

38.0
31.9
6.3
6.2
10.6

32.5
27.2
5.6
5.6
9.1

0.6
0.2
1.3
0.8

0.5
0.2
1.5
1.0

0.5
0.2
1.7
1.1

0.4
0.1
1.9
1.2

Source: Company, ICICIdirect.com Research

Balance sheet
(Year-end March)
Liabilities
Equity Capital
Reserve and Surplus
Total Shareholders funds
Long Term Loans
Long Term Provisions
Minority Interest / Others
Total Liabilities
Assets
Gross Block
Less: Acc Depreciation
Net Block
Capital WIP
Non- Current Investments
LT loans & advances
Other Non-current Assets
Current Assets
Inventory
Debtors
Cash & Bank
ST Loans & Advances
Other Current Assets
Current Liabilities
Creditors
ST Borrowings
Other CL
Net Current Assets
Total Assets

Cash flow statement

| Crore
FY15

FY16

FY17E

FY18E

175.7
3,178.5
3,354.1
210.6
58.7
64.4
3,687.8

175.9
3,982.6
4,158.5
341.5
76.5
72.7
4,649.2

175.9
4,862.8
5,038.7
341.5
76.5
72.6
5,529.3

175.9
5,717.9
5,893.9
321.5
76.5
72.7
6,364.5

2,566.6
760.9
1,805.8
121.7
1,407.4
20.8
20.1

2,889.3
894.1
1,995.2
0.0
1,787.3
29.5
18.2

3,389.3
1,039.8
2,349.5
20.0
1,887.3
89.5
28.2

3,489.3
1,193.3
2,296.0
40.0
2,087.3
189.5
48.2

973.3
710.8
276.0
278.9
491.6

1,096.5
809.7
218.3
326.5
837.7

1,239.2
905.6
216.1
429.0
877.7

1,404.0
1,086.1
377.2
503.3
947.7

1,095.8
523.0
799.7
312.1
3,687.8

1,330.2
449.7
689.9
818.9
4,649.2

1,263.1
499.7
749.9
1,154.8
5,529.3

1,245.0
559.7
809.9
1,703.5
6,364.5

Source: Company, ICICIdirect.com Research

Key ratios
(Year-end March)
Per share data (|)
Adjusted EPS
Cash EPS
BV
DPS
Cash Per Share
Operating Ratios (%)
PBITDA Margin
PBT / Total Operating income
PAT Margin
Inventory days
Debtor days
Creditor days
Return Ratios (%)
RoE
RoCE
RoIC
Valuation Ratios (x)
P/E
EV / EBITDA
EV / Net Sales
Market Cap / Sales
Price to Book Value
Solvency Ratios
Debt/EBITDA
Debt / Equity
Current Ratio
Quick Ratio

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 8

Result Update

ICICIdirect.com coverage universe (FMCG)

CMP
M Cap
EPS (|)
Sector / Company
(|)
TP(|) Rating
(| Cr) FY16E FY17E
931
940
Buy 22,709 21.2 23.5
Colgate (COLPAL)
304
338
Buy
2,975
7.1
8.0
Dabur India (DABIND)
6,353 6,966
Buy 24,467 163.3 173.2
GSK CH (GLACON)
909 1,000
Buy 195,335 19.1 21.7
Hindustan Unilever (HINLEV)
254
277
Buy 301,589
7.7
8.8
ITC Limited (ITC)
289
300 Hold
5,272
9.0
9.9
Jyothy Lab (JYOLAB)
283
285
Buy 33,480
5.6
6.4
Marico (MARIN)
7,237 6,615
Buy 57,679 58.4 120.9
Nestle (NESIND)
140
115 Hold
7,513
5.2
6.5
Tata Global Bev (TATTEA)
1,954 1,931
Buy
2,651 99.2 115.8
VST Industries (VSTIND)
Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

FY18E
26.9
9.4
196.5
24.7
10.0
11.2
7.9
164.5
7.0
128.9

P/E (x)
Price/Sales (x)
RoCE (%)
RoE (%)
FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E
43.9 39.6 34.7
5.5
4.9
4.3 77.6 73.6 73.5 58.7 51.6 51.4
42.7 38.0 32.5
6.9
6.2
5.6 31.1 29.7 30.1 30.2 27.9 27.9
38.9 36.7 32.3
5.7
5.0
4.4 37.3 36.6 36.5 26.6 26.5 26.6
47.6 42.0 36.8
6.4
5.9
5.4 106.8 199.0 219.8 111.1 175.4 198.0
33.0 28.9 25.5
5.8
5.2
4.7 42.2 46.0 49.1 28.7 31.8 35.1
32.2 29.3 25.8
3.4
3.0
2.7 19.2 17.9 19.5 15.7 15.4 16.7
50.4 44.1 35.7
5.5
5.0
4.3 46.3 45.6 46.7 34.6 34.4 36.0
123.9 59.8 44.0
7.1
5.4
4.7 29.7 36.1 41.6 32.3 38.1 44.7
27.1 21.6 20.0
0.9
0.9
0.8
7.7
8.5
8.8
5.6
6.9
7.2
19.7 16.9 15.2
3.0
2.8
2.5 59.7 65.0 67.7 41.3 45.2 47.0

Page 9

Result Update
RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns

ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Head Research

Pankaj Pandey

pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,

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

ICICI Securities Ltd | Retail Equity Research

Page 10

Result Update
ANALYST CERTIFICATION
We /I, Sanjay Manyal, MBA (Finance) and Parth Joshi, MBA (Finance), Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research
report 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.

Terms & conditions and other disclosures:

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and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and
meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without
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Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended
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ICICI Securities Ltd | Retail Equity Research

Page 11