DABUR INDIA LIMITED

Team Name: SYNERGY

Team Members:
Chandru. J (13UTB06)
Devi. S (13UTB07)
Dinesh Kumar. N. G (13UTB09)
Elakkiya.K (13UTB10)
Ishwarya. S (13UTB11)
Saravanan. R (13UTB30)
Sujatha. N (13UTB36)

PART I: GENERAL INFORMATION
1. Name of the corporation Dabur India Ltd.
2. Main corporate web page http://www.dabur.com/
3. Stock exchange where the
firms stock is traded and its
ticker symbol
Dabur stocks are traded in two major stock
exchanges. At present, the equity shares of the
Company are listed at Bombay Stock Exchange Ltd.
(BSE), and National Stock Exchange of India Ltd.
(NSE). The Company has also filed application with
MCX Stock Exchange limited (MCX) for listing of
shares.
Bombay Stock Exchange (BSE) Code: 500096
National Stock Exchange (NSE) Code: DABUR
4. What is the companys
primary product or service?
Hair Oils
Hair Serums
Shampoos
Conditioners
Hair Styling
Moisturizing Skin Cream & Lotion
Face Cleanser
Skin Serums
Face Pack
Depilatory
Herbal Toothpastes
Personal Wash
Massage Oils
Foods & Supplements
5. From the President or CEOs
letter to the stockholders:

a. How well did the firm
perform this year?
Dabur's net sales in Q4, 2013-14 surged 15.53% to
Rs 1,769.02 crores.
b. What issues was the
President or CEO
optimistic about?
NA

c. What issues was the
President or CEO
concerned about?
NA
d. What predictions or goals
were stated in the letter?
Dabur extended its direct distribution network
to villages of 3,000 population and also used
information technology as the big enabler for
this growth strategy. This initiative has been
rolled out across 10 states that account for about
70% of the rural FMCG potential in India.
This initiative has not just helped us report
higher growth for the staple consumer products,
but also capture demand for some aspirational
and high value products like packaged juices
under the brand Real and Fem fairness
bleaches. This also reflects the changing mindset
of the rural consumer and i am happy to state
that we are well placed to cater to emerging
demand for branded consumer products from
the hinterland.
6. From Managements
Discussion and Analysis:

a. What financial highlights
were mentioned?
Dabur showed 20.46% rise in its retail business
at Rs 19.07 crores while its other businesses
were seen declining marginally by 0.24% to Rs
32.82 crores.
Strong performance in the FMCG segment
helped Dabur to report 17.32% increase in
consolidated net profit at Rs 235.29 crores
b. What non-financial
highlights were
mentioned?
The Most Trusted Healthcare and Ayurveda
brand for the second year in running by Brand
Trust Advisory.
Dabur has also earned the distinction of being
the first company to be listed on MCXSX, the
new equity exchange.
c. What risks were
mentioned?
Health, Safety and Environment management
system Dabur aims to effectively control risks
and prevent people from being injured or
harmed during the course of their work.
7. About the auditor:
a. What firm audited the G.Basu & Co.



companys financial
statements?
Chartered Accountants
Firms registration number: 301174E
b. What type of opinion was
issued on the financial
statements?
In our opinion and to the best of our information
and according to the explanations given to us, the
financial statements give the information required
by the Act in the manner so required and give a true
and fair view in conformity with the accounting
principles generally accepted in India:
(a) In the case of the balance sheet, of the state of
affairs of the Company as at 31 March 2013;
(b) In the case of the statement of profit and loss, of
the profit for the year ended on that date; and
(c) In the case of the cash flow statement, of the cash
flows for the year ended on that date.
c. What type of opinion was
issued on the internal
controls?
Based on our examination of the records and
evaluations of the related internal controls, we are
of the opinion that proper records have been
maintained of the transactions and contracts
relating to shares, securities, debentures and other
investments dealt in by `the company and timely
entries have been made in the records. We also
report that `the company has held the shares,
securities, debentures and other investments in its
own name except for those pending transfer in
company name.
d. Did the auditor mention
anything unusual in their
audit report?
Nothing was mentioned unusual in their audit
report.
e. How much were the audit
fees?

2011-2012 2012-2013
55 lakhs 56 lakhs

f. How much were the audit
fees as a percentage of net
income?
2011-12 2012-13
Net Income 463.24 crores 590.98 crores
Percentage 0.11% 0.09%


PART II: FINANCIAL STATEMENTS
1
.
Generally Accepted Accounting
Principles

a. How does the firm describe
its revenue recognition
policy?
Revenue is recognized upon delivery of products and
customer acceptance.
b. Which depreciation method
does the firm use for property,
plant and equipment?
Depreciation on Fixed Assets has been provided on
straight line method

c. Which inventory method does
the firm use?
Moving weighted Average method
d. Did the firm change any
accounting principles in the
current year?
Yes, there is a change in accounting practice.
Change in Accounting Practice: -
Pursuant to withdrawal of mandatory status of AS-30,
31 & 32, the applicability of the same have been
withdrawn from the current period (2014). As a
result, investments held for sale in non-current
category have been accounted for at cost and current
investments at lower of cost and market value. This
contributed to reduction in profit (shown under extra-
ordinary item) and value of current investment by
Rs.0.09 each and increase in non-current investment
by Rs.3.38 and net worth by Rs.3.29.

e. Does the firm anticipate any
accounting changes that will
impact the financial
statements?
NA
2
.
What are the major sources of
revenue?
a) AYURVEDIC TONICS 67% share with brand
Dabur Chyawanprash
b) DIGESTIVES 56% share with brand Hajmola.
c) FRUIT JUICES 52% market share with brands Real
& Real Active
d) HONEY 50% share with brand Dabur Honey
e) SKIN CARE (BLEACHES) 50% share with brand
Fem
f) AIR FRESHENER 40% share with brand Odonil
g) GLUCOSE 25% share with brand Dabur Glucose
h) ORAL CARE 13% share with brands Red
Toothpaste & Toothpowder, Babool & Meswak.
i) HAIR CARE 12% market share with brands Dabur
Amla Hair Oil, Vatika Hair oil & Shampoos, Dabur
Almond Hair Oil
3
.
What are the major expenses? Out of all the expenses,
a) 64.75%- Material Consumed expenses
b) 26.09%- Administrative expenses
c) 7.82%- Personal expenses
d) 1.34%- Manufacturing expenses


4
.
Earnings per share for the current
year and the prior year:

a. Basic EPS Rs. 3.39
b. Diluted EPS Rs.3.37
5
.
Identify the classes of stock that
the firm has and the number of
shares issued and outstanding in
each class.
Common Stock- Rs.1744000 ( no. of shares is issued
not available)
Preferred stock - Not issued
Class A stock:
Total shareholding of Promoter and Promoter Group-
1,197,019,150( total no of shares issued)
Class B stock:
Public Shareholding- 546,793,923 (total no. of shares
issued)
Class C stock: Not issued
Outstanding shares are not available.

6
.
Did the company pay dividends?
If so, how much?
Yes, the company pays dividend every year. Interim
Dividend Paid Rs. 113.29 crores (2012-2013) &
Final Dividend Proposed Rs. 148.15 crores (2012-
2013)
7
.
Did the firm buyback shares of its
own stock? If so, how much was
spent?
No, the firm does not repurchase shares, preferring to
hold cash as power to fund future acquisitions.
8
.
Questions about the statement of
cash flows:

a. Did the firm use the direct or
indirect method for preparing
the statement of cash flows?
Indirect Method
b. How much cash did the
company generate from:


i. Operations
8695.4 (in millions of INR)
ii. Investing
-5411.4 (in millions of INR)
iii. Financing
-2340.1(in millions of INR)
c. Which investing activities
were the largest uses of cash?
Capital Expenditures (-2409.8) ( In Millions of INR )

d. Which investing activities
were the largest sources of
cash?
No

e. Which financing activities
were the largest uses of cash?
Cash Dividends Paid (-2434.3) (In millions of INR)

f. Which financing activities
were the largest sources of
cash?
Issuance (Retirement) of Debt (831) (In millions of
INR)

PART 3:
1) HORIZONTAL ANALYSIS
A) Net Sales

Net Sales/ Revenue is increasing year after year. This is a good sign since revenue generated
increases.
B) Total Expenditure

Total Expenditure is increasing year after year. It shows that the company is growing by
spending more to increase its sales (expansion).
0
20
40
60
80
100
120
140
160
180
200
2009 2010 2011 2012 2013
NET SALES (%)
NET SALES (%)
0
20
40
60
80
100
120
140
160
180
200
2009 2010 2011 2012 2013
TOTAL EXPENDITURE (%)
TOTAL EXPENDITURE (%)

C) Profit/Loss

Profit at the end of each year keeps increasing and it is steady. It is a good sign for the
company's growth.
D) Total Liabilities and Equity/ Total Assets

There is steady increase in Total Assets/Total Liabilities and Equity (Balance Sheet Final
Value). This indicates the growth of the company (expansion). This is a good sign.


0
20
40
60
80
100
120
140
160
180
2009 2010 2011 2012 2013
PROFIT/LOSS(%)
PROFIT/LOSS(%)
0
50
100
150
200
250
2009 2010 2011 2012 2013
TOTAL LIABILITIES AND EQUITY/TOTAL
ASSETS (%)
TOTAL LIABILITIES AND
EQUITY/TOTAL ASSETS (%)

2) VERTICAL ANALYSIS:
A) Total Expenditure

Total Expenditure is becoming the most accounted value of the Total Revenue generated
since it is increasing over the years. This is a bad sign. They must try to reduce the expenses.
B) Profit/Loss

Profit is accounted less year after year which indicates that the profits are not good enough
compared to the amount of revenue generated. In 2013, Dabur has increased it a little bit.
This is a good sign.
78.5
79
79.5
80
80.5
81
81.5
82
82.5
83
2009 2010 2011 2012 2013
Total Expenditure (%)
Total Expenditure (%)
12.5
13
13.5
14
14.5
15
2009 2010 2011 2012 2013
PROFIT/LOSS(%)
PROFIT/LOSS(%)

C) Net Equity

There is no significant trend in Net Equity.
D) Total Liability

The Total Liabilities is decreasing year after year. This is a good sign for Dabur. They are
borrowing less money from outside sources.



78
79
80
81
82
83
84
85
86
87
88
89
2009 2010 2011 2012 2013
NET EQUITY(%)
NET EQUITY(%)
0
2
4
6
8
10
12
14
16
18
20
2009 2010 2011 2012 2013
TOTAL LIABILITY(%)
TOTAL LIABILITY(%)

E) Total Current Assets

Total Current assets has accounted less among the Total Assets over the years. This value
should keep increasing.
F) Total Current Liabilities

Total Current Liabilities has accounted less year after year and it is good for the company.
Lesser the liabilities, the better it is for the company.


0
20
40
60
80
100
120
2009 2010 2011 2012 2013
TOTAL CURRENT ASSETS (%)
TOTAL CURRENT ASSETS (%)
0
20
40
60
80
100
120
2009 2010 2011 2012 2013
TOTAL CURRENT LIABILITIES (%)
TOTAL CURRENT LIABILITIES (%)

3) RATIO ANAYSIS
1) LIQUIDITY RATIOS:
A) Current Ratio

Since Current ratio lies within the range (<2), the company is said to have good short-term
financial strength. It shows that the company had used the current assets efficiently.
B) Quick Ratio

DABUR INDIA, which has a quick ratio of less than 1 cannot pay their current Liabilities
(CL). It also means that it does not have enough cash in hand to pay bills.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2009 2010 2011 2012 2013
CURRENT RATIO
CURRENT RATIO
0
0.2
0.4
0.6
0.8
1
1.2
2009 2010 2011 2012 2013
QUICK RATIO
QUICK RATIO

C) Cash Flow Liquidity

Since cash flow liquidity is high during the recent years, it means that the company is able to
convert the assets to cash to pay its short-term debts.
D) Average Collection Period

The company has a low average collection period which indicates that it does not have
trouble while transferring the outstanding credit to accounts receivable.


0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2009 2010 2011 2012 2013
CASH FLOW LIQUIDITY
CASH FLOW LIQUIDITY
0
10
20
30
40
50
60
70
80
2009 2010 2011 2012 2013
AVERAGE COLLECTION PERIOD
AVERAGE COLLECTION PERIOD

2) EFFICIENCY RATIOS:
A) Accounts Receivable Turnover

Since the company has a high accounts receivable turnover ratio, it simply means that the
company has efficient credit policy which ensures faster collection of receivables.
B) Fixed Asset Turnover

The graph shows that the company uses its fixed assets efficiently to generate revenues.


0
1
2
3
4
5
6
7
8
9
10
2009 2010 2011 2012 2013
ACCOUNTS RECEIVABLE TURNOVER
ACCOUNTS RECEIVABLE
TURNOVER
4.35
4.4
4.45
4.5
4.55
4.6
4.65
4.7
4.75
4.8
4.85
2009 2010 2011 2012 2013
FIXED ASSET TURNOVER
FIXED ASSET TURNOVER

C) Total Asset Turnover

Overall, the company has a stable total asset turnover ratio which means that, it is using all
the types of assets efficiently to promote sales.
3) LEVERAGE RATIOS:
A) Debt To Equity

The graph tells that the company has less Debt-equity ratio in the year 2013, which means
that the company uses less of leverage & holds high equity position.

0
0.5
1
1.5
2
2.5
3
3.5
2009 2010 2011 2012 2013
TOTAL ASSET TURNOVER
TOTAL ASSET TURNOVER
0
0.05
0.1
0.15
0.2
0.25
2009 2010 2011 2012 2013
DEBT TO EQUITY
DEBT TO EQUITY

B) Financial Leverage Index

The graph indicates that the company uses debts & other type of liabilities to finance its
assets.
4) PROFITABILITY RATIOS:
A) Operating Margin

Operating Margin says how much money a company makes for each dollar (rupee) of sales.
A high operating margin is desirable. Dabur's ratios indicate that it is decreasing in the recent
years.

0
1
2
3
4
5
6
7
8
9
10
2009 2010 2011 2012 2013
FINANCIAL LEVERAGE INDEX
FINANCIAL
LEVERAGE
INDEX
0.184
0.186
0.188
0.19
0.192
0.194
0.196
0.198
0.2
0.202
2009 2010 2011 2012 2013
OPERATING MARGIN
OPERATING MARGIN

B) Net Profit Margin

Net Profit Margin indicates margin of safety. It tells how much of each rupee earned by
Dabur is converted into profits. Dabur's ratios indicate that initially it was decreasing but in
2013 it has increased a little bit.
C) Return on Equity (ROE)

ROE measures how much the shareholders earned by investing in Dabur. It shows how
profitable the company is. For Dabur, it has recently increased after a decrease in the years
prior to that.

0.12
0.125
0.13
0.135
0.14
0.145
0.15
0.155
2009 2010 2011 2012 2013
NET PROFIT MARGIN
NET PROFIT MARGIN
0
1
2
3
4
5
6
2009 2010 2011 2012 2013
ROE
ROE

5) MARKET RATIOS:
A) EPS

EPS measures how many rupees of net income have been earned by each share of common
stock. It is increasing for Dabur in recent years.
B) P/E (Price to Earnings) Ratio

P/E ratio shows how much investors are willing to pay per rupee of earnings. It decreased in
2013 after an increase in the years prior to that.

0
1
2
3
4
5
6
2009 2010 2011 2012 2013
EPS
EPS
0
5
10
15
20
25
30
35
40
45
2009 2010 2011 2012 2013
P/E RATIO
P/E RATIO

C) Dividend Payout Ratio

The dividend payout ratio measures the percentage of a company's net income that is given
to shareholders in the form of dividends. In 2013 it has declined a little bit.
4) PORTERS FIVE FORCES


0
0.1
0.2
0.3
0.4
0.5
0.6
2009 2010 2011 2012 2013
DIVIDEND PAYOUT RATIO
DIVIDEND PAYOUT RATIO
PORTER'S
FIVE FORCES
FOR DABUR
INDIA
Threat of
New Entrants
LOW
Threat of
Substitute
Products
HIGH
Bargaining
Power of
Buyers
LOW
Bargaining
Power of
Suppliers
HIGH
Threat of
competitors
HIGH

A) Threat of competitors
The threat of competitors is high for Dabur India Ltd. because there are a lot of
players in the industry.
Premium personal care products face competition from international brands as well.
Competition increases further if existing players enter new segments.
B) Threat of New Entrants
Since, the cost to set up a manufacturing facility is not very high in the Home Care
segment, the entry and exit barriers are low for Dabur.
But the entry barriers in terms of building a national brand is high and so is the exit
barrier.
C) Threat of Substitute Products
Substitutability is highest in Food category followed by Personal care category,
where product innovation is high.
Home-grown and traditional substitutes to Home care products are also one of the
threats. ( e.g. traditional insect repellents)
Dabur, therefore has to constantly re-invent its existing product lines in order to cope
up with the innovations of its competitors.
D) Bargaining Power of Buyers
The buyers bargaining power is low since they cannot influence the prices to such a
great deal because price sensitivity is high especially in the Food and Home Care
category.
E) Bargaining Power of Suppliers
The number of suppliers is low for the Home Care category e.g. Certain oils are not
available easily, which increases suppliers bargaining power when negotiating the
price with Godrej etc. Hence, Bargaining Power of Suppliers is high.