DABUR INDIA LIMITED

Type Public

Industry Consumer goods

Founded 1884; 137 years ago

Founder S.K Burman

Headquarters Ghaziabad, Uttar Pradesh

India
Area served Worldwide

Key people  Amit Burman

(Chairman)
 Mohit Malhotra
(CEO)

Products  Personal care

 Skin care
 Hair care
 Oral hygiene
 Health supplements
 Drinks

INTRODUCTION
Dabur India Ltd is one of the leading FMCG Companies in India. The company is also a world
leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products. They operate in key
consumer products categories like Hair Care Oral Care Health Care Skin Care Home Care and
Foods. The company's FMCG portfolio includes five flagship brands with distinct brand identities
Dabur as the master brand for natural healthcare products Vatika for premium personal care
Hajmola for digestives Real for fruit juices and beverages and Fem for fairness bleaches and skin
care products. The company operates through three business units namely consumer care
division (CCD) international business division (IBD) and consumer health division (CHD). Their
CCD business is divided into four key portfolios: healthcare personal care home care and foods.
Their CHD business offers a range of healthcare products. Their IBD business includes brands
such as Dabur Amla and Vatika. The company has 20 state-of-the-art manufacturing facilities
spread across the globe. Of these 12 production facilities are located in India with key
manufacturing locations being Baddi (Himachal Pradesh) and Pantnagar (Uttaranchal) besides
seven factories located at Sahibabad (Uttar Pradesh) Jammu Silvassa Alwar Katni Narendrapur
Pithampur and Nasik. The Foods business is serviced by manufacturing facilities at Newai
(Rajasthan) and Siliguri (West Bengal). Outside India the company has manufacturing facilities in
Dubai Sharjah Ras-al- Khaimah Egypt Nigeria Nepal and Bangladesh. The company has a wide
distribution network covering 6 million retail outlets with a high penetration in both urban and
rural markets. Their products also have a huge presence in the overseas markets and are
available in over 120 countries across the globe. Their brands are highly popular in the Middle
East SAARC countries Africa US Europe and Russia. Dabur's overseas revenue accounts for over
30% of the total turnover.

HISTORY OF THE COMPANY

Dabur India Ltd was incorporated on September 16, 1975 for manufacture of high-grade edible
& industrial guargum powder and its sophisticated derivatives. In the year 1978 the company
launched Hajmola tablet an Ayurvedic medicine used as a digestive aid. In the year 1979 they set
Dabur Research Foundation. Also they commenced commercial production at the most modern
herbal medicines plant in Sahibabad. In the year 1986 the company was converted into a public
limited company. In the year 1988 they launched the pharmaceutical medicines. In the year 1989
the company converted the Ayurvedic digestive formulation into a children's fun product with
the launch of Hajmola Candy. In the year 1992 they launched a new range of coconut oil under
the brand name 'Anmol'. Also they developed Dab 10 an intermediate for anti-cancer drug
namely Taxol. In the year 2003 the company demerged their pharmaceuticals business from the
FMCG business into a separate company as part of plans to provider greater focus to both the
businesses. With this the company now largely comprises of the FMCG business that include
personal care products healthcare products and Ayurvedic Specialities while the Pharmaceuticals
business would include Allopathic Oncology formulations and Bulk Drugs.

Dabur Oncology Plc a subsidiary of Dabur India would also be part of the Pharmaceutical
business. On 29 March 2017 Dabur India announced the commissioning of its new
manufacturing facility in Tezpur Assam. The plant set up with an investment of Rs 250 crore is
the most modern and environment friendly manufacturing facility in the consumer goods
industry in India. The manufacturing facility located in Balipara Industrial area will manufacture
the entire range of Dabur's Ayurvedic Medicines Health Supplements Hair Oils Shampoos
Toothpastes Skin Care and Home Care products. The new facility has been constructed in a
record time of eight months since its ground-breaking in July 2016 and will house the most
modern production lines for consumer products in India. The state-of-the-art manufacturing
facility is spread over 30 acres of land and is expected to give a quantum leap to the capacity of
Dabur India to meet the growing demand for its products. On 26 September 2017 Dabur India
announced its alliance with Amazon to take its products global. Dabur's collaboration with
Amazon will help it expand and increase its product penetration into the US market. Under this
collaboration Amazon will help Dabur take around 30 products from its popular range such as
Vatika hair oil Meswak toothpaste Red toothpaste Chyawanprash to name a few to consumers in
the US. Along with the existing wide range Dabur will also offer an exclusive range of products
specially created for Amazon's global customers. As part of this association Amazon through its
Global Selling Program will provide an avenue to Dabur to take its vast range of well-known and
sough-after ayurvedic and natural products to millions of global customers on Amazon.com in
the US and eventually across other Amazon marketplaces.

FINANCIAL RATIOS
  LIQUIDITY RATIOS :

Liquidity ratios are the ratios that measure the ability of a company to meet its short-term debt
obligations. These ratios measure the ability of a company to pay off its short-term liabilities
when they fall due.

The liquidity ratios are a result of dividing cash and other liquid assets by the short-term
borrowings and current liabilities. They show the number of times the short-term debt
obligations are covered by the cash and liquid assets. If the value is greater than 1, it means the
short-term obligations are fully covered.

Generally, the higher the liquidity ratios are, the higher the margin of safety that the company
possess to meet its current liabilities. Liquidity ratios greater than 1 indicate that the company is
in good financial health and it is less likely fall into financial difficulties.

Current Ratio
Current ratio is balance-sheet financial performance measure of company liquidity. Current ratio
indicates a company's ability to meet short-term debt obligations. The current ratio measures
whether or not a firm has enough resources to pay its debts over the next 12 months.

Quick Ratio
Quick ratio is a measure of a company's ability to meet its short-term obligations using its most
liquid assets (near cash or quick assets). Quick assets include those current assets that
presumably can be quickly converted to cash at close to their book values.
Quick ratio is viewed as a sign of a company's financial strength or weakness; it gives information
about a company’s short-term liquidity. The ratio tells creditors how much of the company's
short-term debt can be met by selling all the company's liquid assets at very short notice.

Cash Ratio
Cash ratio (also called cash asset ratio) is the ratio of a company's cash and cash equivalent
assets to its total liabilities. Cash ratio is a refinement of quick ratio and indicates the extent to
which readily available funds can pay off current liabilities. Potential creditors use this ratio as a
measure of a company's liquidity and how easily it can service debt and cover short-term
liabilities.

 SOLVENCY RATIOS :
Solvency ratios also known as leverage ratios determine an entity’s ability to service its debt. So
these ratios calculate if the company can meet its long-term debt. It is important since the investors
would like to know about the solvency of the firm to meet their interest payments and to ensure
that their investments are safe. Hence solvency ratios compare the levels of debt with equity, fixed
assets, earnings of the company etc.

Debt to Equity Ratio

Debt to equity ratio measures the relationship between long-term debt of a firm and its total
equity. The debt-equity ratio holds a lot of significance. Firstly it is a great way for the company to
measure its leverage or indebtedness. A low ratio means the firm is more financially secure, but it
also means that the equity is diluted.

In contrast, a high ratio indicates a risky business where there are more creditors of the firm than
there are investors. In fact, a high debt to equity ratio may prevent more investors from investing in
the firm, and even prevent creditors from lending money.

Proprietary Ratio 

Proprietary ratio expresses the relationship between the proprietor’s funds, i.e. the funds of all the
shareholders and the capital employed or the net assets. Like the debt-equity ratio shows us the
comparison between debt and capital, this ratio shows the comparison between owner’s funds and
total capital or net assets.

Interest Coverage Ratio

All debt has a cost, which we normally term as an interest. Debentures, loans, deposits etc all have
an interest cost. This ratio will measure the security of this interest payable on long-term debt. It is
the ratio between the profits of a firm available and the interest payable on debt instruments.

Total Assets to Debt Ratio

Total assets to debt ratio is a leverage ratio that defines the total amount of debt relative
to assets owned by a company. Using this ratio, analysts can compare one company's leverage
with that of other companies in the same industry. This information can reflect how financially
stable a company is. The higher the ratio, the higher the degree of leverage and, consequently,
the higher the risk of investing in that company.

 TURNOVER RATIOS :
 A turnover ratio represents the amount of assets or liabilities that a company replaces in
relation to its sales. The concept is useful for determining the efficiency with which a
business utilizes its assets. In most cases, a high asset turnover ratio is considered good,
since it implies that receivables are collected quickly, fixed assets are heavily utilized, and
little excess inventory is kept on hand. This implies a minimal need for invested funds, and
therefore a high return on investment.
Conversely, a low liability turnover ratio (usually in relation to accounts payable) is
considered good, since it implies that a company is taking the longest possible amount of
time in which to pay its suppliers, and so retains its cash for a longer period of time.

Trade Receivable Turnover Ratio

Measures the time it takes to collect an average amount of accounts receivable. It can be
impacted by the corporate credit policy, payment terms, the accuracy of billings, the activity
level of the collections staff, the promptness of deduction processing, and a multitude of
other factors.

Inventory Turnover Ratio

Measures the amount of inventory that must be maintained to support a given amount of
sales. It can be impacted by the type of production process flow system used, the presence
of obsolete inventory, management's policy for filling orders, inventory record accuracy, the
use of manufacturing outsourcing, and so on.

Trade Payable Turnover Ratio

Measures the time period over which a company is allowed to hold trade payables before
being obligated to pay suppliers. It is primarily impacted by the terms negotiated with
suppliers and the presence of early payment discounts.

Working Capital Turnover Ratio

The working capital turnover ratio measures how well a company is utilizing its working
capital to support a given level of sales. A high turnover ratio indicates that management is
being extremely efficient in using a firm's short-term assets and liabilities to support sales.
Conversely, a low ratio indicates that a business is investing in too many accounts receivable
and inventory assets to support its sales, which could eventually lead to an excessive amount
of bad debts and obsolete inventory write-offs.
  PROFITABILITY RATIOS :
Profitability ratios are a type of accounting ratio that helps in determining the financial
performance of business at the end of an accounting period. Profitability ratios show how well a
company is able to make profits from its operations.
Profitability ratios are used by investors and creditors to determine a company’s return on
investment based on the resources available to the business. It can also be said that profitability
ratios can be used to judge if the company is generating enough profit by utilising its assets.

Gross Profit Ratio

Gross Profit Ratio is a profitability ratio that measures the relationship between the gross profit
and net sales revenue. A fluctuating gross profit ratio is indicative of inferior product or
management practices.

Net Profit Ratio

Net profit ratio is an important profitability ratio that shows the relationship between net sales
and net profit after tax. It helps investors in determining whether the company’s management is
able to generate profit from the sales and how well the operating costs and costs related to
overhead are contained.

Operating Profit Ratio

Operating Profit Ratio measures the relationship between Operating Profit and Revenue from
Operations, i.e. Net Sales. The objective of computing Operating Profit Ratio is to determine the
operational efficiency of the business. An increase in the ratio over the previous period shows
improvement in the operational efficiency of the business enterprise.

Return on Investment
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an
investment or compare the efficiency of a number of different investments. ROI tries to directly
measure the amount of return on a particular investment, relative to the investment’s cost. To
calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. 
 FINANCIAL STATEMENTS OF DABUR

Balance Sheet
------------------- in Rs. Cr. -------------------

  Mar 20 Mar 19 Mar 18 Mar 17 Mar 16

  12 mths 12 mths 12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 176.71 176.63 176.15 176.15 175.91

Total Share Capital 176.71 176.63 176.15 176.15 175.91

Reserves and Surplus 4,304.25 3,717.20 4,050.71 3,481.73 2,695.87

Total Reserves and Surplus 4,304.25 3,717.20 4,050.71 3,481.73 2,695.87

Employees Stock Options 93.27 74.99 0.00 0.00 0.00

Total Shareholders’ Funds 4,574.23 3,968.82 4,226.86 3,657.88 2,871.78

NON-CURRENT LIABILITIES

Long Term Borrowings 24.68 26.05 201.04 200.64 0.00

Deferred Tax Liabilities [Net] 0.00 8.32 96.03 98.28 64.47

Other Long Term Liabilities 4.66 4.56 4.25 3.71 0.00

Long Term Provisions 54.69 52.76 50.04 47.52 45.03

Total Non-Current Liabilities 84.03 91.69 351.36 350.15 109.50

CURRENT LIABILITIES

Short Term Borrowings 89.28 108.72 85.49 83.04 86.51

Trade Payables 1,032.45 998.32 960.62 914.52 931.34

Other Current Liabilities 197.32 330.14 123.98 157.05 187.75

Short Term Provisions 122.80 81.09 64.39 54.38 268.13

Total Current Liabilities 1,441.85 1,518.27 1,234.48 1,208.99 1,473.73

Total Capital And Liabilities 6,100.11 5,578.78 5,812.70 5,217.02 4,455.01

ASSETS
NON-CURRENT ASSETS

Tangible Assets 1,060.75 971.88 971.34 929.18 673.49

Intangible Assets 25.15 15.37 8.78 12.80 17.04

Capital Work-In-Progress 105.83 21.69 26.82 28.25 24.96

Other Assets 48.38 49.37 50.36 51.35 0.00

Fixed Assets 1,240.11 1,058.31 1,057.30 1,021.58 715.49

Non-Current Investments 1,084.16 2,236.74 2,719.69 2,319.03 1,763.39

Deferred Tax Assets [Net] 21.62 0.00 0.00 0.00 0.00

Long Term Loans And Advances 16.78 13.14 9.61 8.92 23.66

Other Non-Current Assets 472.25 146.24 67.26 81.88 0.02

Total Non-Current Assets 2,834.92 3,454.43 3,853.86 3,431.41 2,502.56

CURRENT ASSETS

Current Investments 1,382.67 725.40 713.39 735.12 661.48

Inventories 809.14 732.90 704.79 599.27 615.56

Trade Receivables 379.63 431.46 321.34 333.25 420.69

Cash And Cash Equivalents 525.60 124.71 87.02 26.16 54.16

Short Term Loans And Advances 1.22 4.56 1.41 3.35 123.91

Other Current Assets 166.93 105.32 130.89 88.46 76.65

Total Current Assets 3,265.19 2,124.35 1,958.84 1,785.61 1,952.45

Total Assets 6,100.11 5,578.78 5,812.70 5,217.02 4,455.01

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 298.28 618.31 684.68 772.41 1,277.89

CIF VALUE OF IMPORTS

Raw Materials 0.00 0.00 0.00 0.00 38.88

Stores, Spares And Loose Tools 0.00 0.00 0.00 0.00 0.38

Trade/Other Goods 0.00 0.00 0.00 0.00 102.96

Capital Goods 0.00 0.00 0.00 0.00 6.13

EXPENDITURE IN FOREIGN EXCHANGE

Expenditure In Foreign Currency 86.20 84.46 80.39 93.23 4.66

REMITTANCES IN FOREIGN CURRENCIES FOR

DIVIDENDS

Dividend Remittance In Foreign Currency - - - - 0.02

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods - - 202.65 158.16 188.20

Other Earnings 244.62 250.65 - - -

BONUS DETAILS

Bonus Equity Share Capital 163.23 163.23 163.23 163.23 163.23

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value 985.47 2,138.00 2,595.93 2,595.93 1,180.84

Non-Current Investments Unquoted Book Value 98.69 98.74 123.76 123.76 606.29

CURRENT INVESTMENTS

Current Investments Quoted Market Value 1,382.67 700.40 646.64 643.24 334.24

Current Investments Unquoted Book Value 25.00 25.00 66.75 91.88 328.30

Statement Of Profit & Loss Account

------------------- in Rs. Cr. -------------------

  Mar 20 Mar 19 Mar 18 Mar 17 Mar 16

  12 mths 12 mths 12 mths 12 mths 12 mths

INCOME

Revenue From Operations [Gross] 6,241.09 6,189.54 5,552.26 5,357.84 5,822.23

Less: Excise/Service Tax/Other Levies 0.00 0.00 16.77 79.19 82.53

Revenue From Operations [Net] 6,241.09 6,189.54 5,535.49 5,278.65 5,739.70

Other Operating Revenues 68.71 83.65 56.80 12.00 10.30

Total Operating Revenues 6,309.80 6,273.19 5,592.29 5,290.65 5,750.00

Other Income 276.90 274.74 283.23 274.64 196.64

Total Revenue 6,586.70 6,547.93 5,875.52 5,565.29 5,946.64

EXPENSES
Cost Of Materials Consumed 2,449.37 2,262.51 2,060.26 1,843.18 1,847.75

Purchase Of Stock-In Trade 865.22 984.91 916.46 944.60 988.14

Changes In Inventories Of FG,WIP And
-69.89 10.09 -74.03 -8.19 -23.77
Stock-In Trade
Employee Benefit Expenses 578.26 572.33 461.13 425.30 431.77

Finance Costs 19.27 29.80 21.89 16.23 9.83

Depreciation And Amortisation Expenses 129.93 108.83 102.50 75.43 72.82

Other Expenses 1,106.07 1,076.11 999.64 974.39 1,407.36

Total Expenses 5,078.23 5,044.58 4,487.85 4,270.94 4,733.90

Mar 20 Mar 19 Mar 18 Mar 17 Mar 16

12 mths 12 mths 12 mths 12 mths 12 mths

Profit/Loss Before Exceptional, Extra

1,508.47 1,503.35 1,387.67 1,294.35 1,212.74
Ordinary Items And Tax

Exceptional Items
-100.00 0.00 -14.54 0.00 0.00

Profit/Loss Before Tax 1,408.47 1,503.35 1,373.13 1,294.35 1,212.74

Tax Expenses-Continued Operations

Current Tax 425.40 369.28 340.33 310.83 259.11
Deferred Tax
-187.28 -130.22 -39.25 -14.81 14.12

Total Tax Expenses

238.12 239.06 301.08 296.02 273.23

Profit/Loss After Tax And Before

Extra-Ordinary Items
1,170.35 1,264.29 1,072.05 998.33 939.51

Profit/Loss From Continuing

Operations
1,170.35 1,264.29 1,072.05 998.33 939.51

Profit/Loss For The Period 1,170.35 1,264.29 1,072.05 998.33 939.51

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 6.62 7.16 6.09 5.67 5.34
Diluted EPS (Rs.)
6.60 7.13 6.06 5.64 5.31

VALUE OF IMPORTED AND

INDIGENIOUS RAW MATERIALS
Imported Raw Materials 0.00 0.00 0.00 0.00 40.12
Indigenous Raw Materials
0.00 0.00 0.00 0.00 1,158.42

STORES, SPARES AND

LOOSE TOOLS
Imported Stores And Spares 0.00 0.00 0.00 0.00 0.05
Indigenous Stores And Spares
0.00 0.00 0.00 0.00 16.75

DIVIDEND AND DIVIDEND

PERCENTAGE
Equity Share Dividend 617.78 1,597.01 477.03 396.34 395.79

Tax On Dividend 0.00 0.00 0.00 80.69 80.57

Equity Dividend Rate (%) 300.00 275.00 750.00 225.00 225.00

Cash Flow Statement

------------------- in Rs. Cr. -------------------

  Mar 20 Mar 20 Mar 19 Mar 19 Mar 18

  12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit/Loss Before Extraordinary Items And

1,408.47 0.00 1,503.35 0.00 1,373.13
Tax

Net Cash Flow From Operating Activities 1,154.77 0.00 1,123.57 0.00 813.67

Net Cash Used In Investing Activities -331.54 0.00 416.71 0.00 -262.38

Net Cash Used From Financing Activities -826.00 0.00 -1,619.39 0.00 -493.44

Foreign Exchange Gains / Losses 1.26 0.00 1.07 0.00 1.20

Net Inc/Dec In Cash And Cash Equivalents -1.51 0.00 -78.04 0.00 59.05

Cash And Cash Equivalents Begin of Year -20.24 0.00 57.80 0.00 -1.25

Cash And Cash Equivalents End Of Year -21.75 0.00 -20.24 0.00 57.80

FINANCIAL RATIO ANALYSIS

(LINK TO THE MS EXCEL SHEET)

https://drive.google.com/file/d/1IeFq8degXzc-8ccvx9FyYJoOXFNYTHmE/view?usp=sharing

GRAPHICAL ANALYSIS

LIQUIDITY RATIOS
2.5

1.5

0.5

0
Year ended Year ended Year ended Year ended Year ended
31stMar2020 31stMar2019 31stMar2018 31stMar 2017 31stMar2016

Current Ratio Current Assets/Current Liabilities

Quick Ratio Quick Assets/Current Liabilities
Working Capital Ratio Current Assets-Current liabilities/Current Liabilities
Cash Ratio Cash and Cash Equivalents/Current Liabilities
 SOLVENCY RATIOS
4
3.5
3
2.5
2
1.5
1
0.5
0
Year ended Year ended Year ended Year ended Year ended
31stMar2020 31stMar2019 31stMar2018 31stMar 2017 31stMar2016

Debt-Equity Ratio Debt/Shareholder's Fund

Proprietary ratio Shareholder's Fund/Total Assets
Interest coverage ratio Profit before Interest &Tax/Interest on Long Term Debt

TURNOVER RATIOS
18
16
14
12
10
8
6
4
2
0
Year ended Year ended Year ended Year ended Year ended
31stMar2020 31stMar2019 31stMar2018 31stMar 2017 31stMar2016

Inventory Turnover Ratio COGS/Average Inventory

Trade Receivable Turnover Ratio Credit Sale/Average Trade Receivable
Trade Payable Turnover Ratio Credit Purchase/Average Trade Payable
Working Capital Turnover Ratio Net Sales/Working Capital

PROFITABILITY RATIOS
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Year ended Year ended Year ended Year ended Year ended
31stMar2020 31stMar2019 31stMar2018 31stMar 2017 31stMar2016

Gross profit ratio Gross Profit/Net Sales *100

Net profit ratio Net Profit/Net Sales *100
Return on investment Profit Before Interest Tax & Dividend/Capital Employed *100
Operating Profit Ratio Operating Income/Net Sales *100
 CONCLUSION

 Dabur is one of the main FMCGs in the country and is the market leader in multiple
segments. It has had the option to accomplish such statures with its solid product portfolio,
conspicuous brand name and extension of its conveyance channel.
 The company has almost no debt to its name, and has 95% equity in its capital structure.
This indicates sound financial health of the company in the long term as well.
 The company had a weak short term liquidity position initially, but we can see a gradual
improvement in its liquidity over the years.
 Inventory turnover ratio depicts a fluctuating trend indicating an accumulation of inventory
from time to time causing loss to the company by a way of deterioration of stock, interest
loss etc.
 The Return on Investment shows a stable pattern which indicates that resources are
managed efficiently by the firm.
 A stable Gross Profit Ratio over the years is indicative of the firm’s efficiency with which
production and selling operations are carried on. .

 Though Trade Payable Turnover Ratio is low, Dabur enjoys good credit worthiness in the
market because of the goodwill it earned over the period.
 The fluctuating Total Asset to Debt Ratio indicates lower safety for lenders/creditors as the
business depends largely on outside loans for its existence.

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Prepared by –

(1) ARMAAN SINGH SETHI (205003)

(2) JASKEERAT SINGH OBEROI (205006)
(3) AANJANAY MITTAL (205009)
(4) PREET KHANDELWAL (205019)