Result Update
May 8, 2015
Rating matrix
Rating
Target
Target Period
Potential Upside
:
:
:
:
Dabur India (DABIND)
Hold
| 263
12 months
2%
Strong volumes, healthy margins…
What’s changed?
Target
EPS FY15E
EPS FY16E
EPS FY17E
Rating
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Quarterly performance
Sales
EBITDA
EBITDA (%)
PAT
Q4FY15
1944.8
340.7
17.5
284.9
Q4FY14 YoY (%)
1764.0
10.2
290.0
17.5
16.4 108 bps
235.5
21.0
Q3FY15 QoQ (%)
2073.6
-6.2
346.4
-1.6
16.7 81 bps
283.7
0.4
Key financials
| Crore
Net Sales
EBITDA
Net Profit
EPS (|)
FY14
7,073.2
1,156.4
916.5
5.2
FY15
7,806.4
1,349.3
1,100.9
6.3
FY16E
9,396.4
1,749.4
1,371.0
7.9
FY17E
10,336.6
1,935.0
1,512.0
8.7
FY15
40.7
37.4
0.8
5.7
36.3
42.7
FY16E
32.7
30.0
1.0
4.8
35.4
44.4
FY17E
29.6
30.5
1.2
4.3
31.3
39.7
Valuation summary
P/E
Target P/E
Div. Yield
Mcap/Sales
RoNW (%)
RoCE (%)
FY14
49.0
45.0
0.7
6.3
38.3
42.4
Stock data
Particular
Market Capitalization (| Crore)
Total Debt (FY14) (| Crore)
Cash and Investments (FY14) (| Crore)
EV (| Crore)
52 week H/L
Equity capital
Face value
Amount
44,815.7
392.4
1,171.2
44,036.9
262 / 166
| 174.3 Crore
|1
Price performance
Dabur
Marico
GCPL
HUL
1M
-3.5
-2.3
-3.6
-5.0
3M
-3.5
6.3
-4.0
-5.1
| 257
6M
16.4
24.1
15.1
15.3
12M
46.8
66.8
37.2
55.3
Research Analyst
Sanjay Manyal
sanjay.manyal@icicisecurities.com
Parth Joshi
parth.joshi@icicisecurities.com
Parineeta Rajgarhia
parineeta.rajgarhia@icicisecurities.com
ICICI Securities Ltd | Retail Equity Research
• Dabur India’s Q4FY15 results were in line with our estimates with net
sales posting 10.2% YoY growth to | 1944.8 crore (I-direct estimate:
| 1965.4 crore). Growth was mainly driven by 11.3% growth in the
domestic business led by strong growth in the foods (19.6%) & skin
care (16.6%) segments
• Dabur’s domestic FMCG business saw volume growth of 8.1% with
all categories witnessing double-digit growth except for hair care
(7.4%) and OTC (7.7%)
• Operating margins improved ~108 bps to 17.5% despite increased
advertisement and promotion expense. Benign commodity prices
contributed in 192 bps savings in raw material costs for the
company. Net profit surged 21% to | 284.9 crore (I-direct estimate: |
279.6 crore) led by higher EBITDA
Presence in niche categories to keep revenue growth healthy
Dabur India (DIL) has a strong portfolio of brands (Dabur Chyawanprash,
Real, Fem, Honey, Meswak, Dabur Red) with focus largely on ayurvedic &
healthcare offerings. The company’s diverse product portfolio (hair care,
oral care, skin care, home care, health supplements, digestives, OTC &
ethicals) and presence in niche categories aided revenue growth at a
robust 18.6% CAGR in FY08-15. Though hair care, skin care and OTC &
ethicals have been seeing softening in growth (7-10%) from FY13
onwards, other categories (juices, health supplements, digestives & oral
care) are continuing to witness robust 15-20% growth. We believe led by
DIL’s brand strength in higher growth niche segments and further
strengthening of portfolio through new launches focusing on healthcare,
revenue growth would continue to be healthy at 15.1% CAGR (FY15-17E).
On track to capture reviving urban growth
In the last few years (FY11-14), DIL more than doubled its rural reach from
~15,000 villages to ~43,000 villages through its ‘Project Double’. The
initiative played out extremely well for the company by increasing
contribution to booming rural demand in DIL’s revenues to 45% from
~30% earlier. Going forward, DIL intends to extend the rural reach to
~50,000 villages the end of FY16 and further to ~60,000 villages by FY17.
It also aided in maintaining its volume growth at 8-11%. Going ahead,
with rural growth witnessing signs of flagging, DIL plans to consolidate its
presence by increasing number of SKUs at these rural distribution points.
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’. DIL has increased its
chemist network reach from ~31000 (FY13) to ~75000 in FY15.
Sustained volume growth
Led by DIL’s niche portfolio & constant distribution expansion, volume
growth maintained its 8-11% trajectory since FY11 despite FMCG industry
witnessing a slowdown. Going ahead, volume growth may remain
modest at 6-10%, with a reviving urban demand scenario, expected from
FY16E onwards resulting in ~10% volume growth in FY16E, FY7E.
Volume growth remains healthy; fairly valued
DIL is preparing well for the future by increasing its presence to capture
the revival in urban discretionary spend. We expect the expansion to spell
healthy revenue and earnings CAGR (FY14-17E) of 13.5% and 18.3%,
respectively. We maintain our target price of | 263/share.
Variance analysis
Q4FY15 Q4FY15E Q4FY14 YoY (%) Q3FY15 QoQ (%)
1,944.8
1,965.4 1,764.0
10.2 2,073.6
-6.2
Net Sales
Operating Income
4.9
5.7
5.4
-8.5
5.5
-9.5
Raw Material Expenses
905.9
934.0
858.1
5.6
988.1
-8.3
Employee Expenses
SG&A Expenses
172.3
265.4
163.1
319.4
152.9
228.4
12.7
16.2
177.8
319.4
-3.1
-16.9
Other operating Expenses
260.4
181.8
234.8
10.9
241.8
7.7
EBITDA
EBITDA Margin (%)
340.7
17.5
346.5
17.6
290.0
17.5
16.4 108 bps
346.4
16.7
-1.6
81 bps
28.2
10.3
44.7
33.3
8.9
35.1
26.3
13.7
38.4
7.0
-24.8
16.3
30.9
9.5
38.6
-8.7
7.9
15.9
PBT
351.9
Tax Outgo
67.0
PAT
284.9
Key Metrics YoY growth (%)
Volume Growth
8.1
Standalone sales growth
11.3
Subsidiary's sales growth
6.7
Source: Company, ICICIdirect.com Research
345.1
65.6
279.6
293.7
58.2
235.5
19.8
15.1
21.0
350.0
66.3
283.7
0.5
1.0
0.4
7.0
7.6
19.5
9.0
13.7
20.2
Comments
Net sales growth was at 10.2% on the back of 8.1% volume growth led by
strong growth in foods, skin care & health supplements
Raw material cost for the company dipped 192 bps as a percentage of sales
as packaging cost dipped due to a sharp fall in crude prices
A&P expenses rose 70 bps as a percentage of sales as the company has
been focusing on marketing activities to further increase its market share
Depreciation
Interest
Other Income
7.4
11.8
1.8
Operating margins improved 108 bps mainly due to savings in RM cost
Net profit increased 21% in line with our estimates
Domestic volume growth remained strong at 8.1%
International business witnessed growth of ~7%
Change in estimates
(| Crore)
Sales
EBITDA
EBITDA Margin (%)
PAT
EPS (|)
Old
9,396.4
1,727.5
18.4
1,363.8
7.8
FY16E
New % Change
Old
9,396.4
0.0 10336.6
1,749.4
1.3
1912.0
18.6
19 bps
18.5
1,371.0
0.5
1504.4
7.9
0.5
8.6
FY17
New % Change
Comments
10336.6
0.0 We have not changed our estimates
1912.0
0.0
18.5
0.0
1512.0
0.5
8.7
0.5
Source: Company, ICICIdirect.com Research
Assumptions
Std. Sales (| crore)
Volume Growth (%)
Subs. Sales (| crore)
FY13
FY14
4,349.4 4,860.4
10.6
9.3
1,797.3 2,207.9
RM exp. To sales %
49.1
48.1
Adex to sales %
13.6
14.1
Interest Cost (| crore)
58.9
54.2
Source: Company, ICICIdirect.com Research
Current
Earlier
Comments
FY15 FY16E FY17E FY16E FY17E
5,418.9 6,269.5 6894.6 6,269.5 6,894.6 We have not changed our estimates
NA
NA
NA
NA
NA
2,387.5 3,126.9 3,442.0 3,126.9 3,442.0
47.7
14.0
40.1
45.5
14.4
18.6
ICICI Securities Ltd | Retail Equity Research
45.7
14.3
18.6
45.5
14.4
18.6
45.7
14.3
18.6
Page 2
Company Analysis
Revenue growth to remain healthy largely led by volumes & initiatives
DIL’s revenue growth has remained robust at 18.6% CAGR (FY08-15)
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 and international markets. Even
in a slowing consumer demand scenario from H2FY13, DIL has managed
to maintain its healthy revenue growth of 12-16% led by volume growth
of 8-11%. The slowdown has, however, largely impacted the company’s
hair oil (segment as a whole witnessing stagnation in growth) and skin
care (impacted by lower discretionary demand following the slowdown in
the economy) growth while keeping the oral care (Meswak & Dabur Red),
health supplements (Dabur Chyawanprash, Dabur Honey), home care
(Odonil, Odomos), foods (Real, Real Activ), digestive (Hajmola) and OTC &
ethicals portfolio growth healthy.
The company has said it will go ahead with ‘Project 50:50’ wherein it will
focus on top 130 cities in India, which contribute 50% of urban
consumption to drive revenues of the company. Under this initiative,
Dabur will split the sales team for wholesale and retail channels to better
tap the demand from urban markets. According to the company, most of
these cities are located in South India, which currently contributes 1520% of total revenue for Dabur.
Dabur has also forayed into the ayurvedic hair oil segment with the
launch of Keratex (previously a pharma product but now the company
has introduced it as an OTC product). Dabur is planning to invigorate the
shampoo category with a number of innovations. ‘Dabur Baby’ range is
slated for further expansion (currently baby care range contributes ~|
140 crore in revenues).
Going ahead, we believe that aided by DIL’s increasing focus on
innovations (new launches expected by DIL in FY16 in shampoo space)
and strengthening presence both in rural and urban India, revenue growth
would continue to remain strong at 15.1% CAGR in FY15-17E, aided by a
higher mix of volumes.
Though FY15E is witnessing some moderation in growth following
concerns of a slower recovery in urban demand, we believe that if the
economy bounces back to a healthy growth phase, Dabur would follow
the trend.
Exhibit 1: Revenues (| crore) and revenue growth (%) trend
12000
35
30.1
30
10000
8000
18.8
20.9
15.9
6000
0
20
15.1
10.4
4000
2000
25
20.4
20.3
10.0
10
2805.4
3390.5
4077.4
5305.4
6146.7
7073.2
7806.4
9396.4
10336.6
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
Sales (| crore)
Sales growth (%)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
15
Page 3
5
0
Exhibit 2: Category wise revenue growth in percentage (YoY)
Hair Care
Oral Care
Health Supp.
Digestives
Skin Care
Home Care
Foods
OTC & Ethicals
Retail
Q3FY12 Q4FY12
19.6
19.8
11.4
7.8
13.4
11.0
1.3
19.4
5.1
17.8
17.7
18.1
17.3
30.4
21.6
13.8
131.0
83.6
FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13
16.0
10.4
13.2
13.9
9.6
9.5
8.2
7.0
13.6
12.3
9.4
18.0
15.7
12.0
22.6
9.9
9.9
-3.5
-5.4
1.3
9.0
13.3
25.8
15.7
11.1
14.4
14.6
23.0
30.5
33.3
26.5
34.5
17.9
22.2
22.6
8.2
12.7
37.2
15.6
13.7
106.8
58.3
48.4
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 FY15
7.1
8.4
10.2
12.1
7.4 10.3
13.8
8.0
8.1
11.3
11.6
9.8
16.4
21.6
10.1
13.5
13.0 13.9
17.2
11.3
12.3
11.6
11.0 11.5
13.2
4.4
9.7
4.0
16.6
8.3
19.8
14.7
10.2
16.2
12.1 13.2
19.7
21.6
29.0
11.8
19.6 20.2
11.8
4.4
7.5
8.8
7.7
7.3
19.6
NA
NA
NA
NA
NA
Source: Company, ICICIdirect.com Research
EBITDA margins to improve to 18.5% by FY17E…
DIL’s margins have remained at higher levels of 16-18% since FY08 led by
the company’s strong brand equity in the healthcare space of the FMCG
segment. Along with a changing sales mix (more towards products
witnessing constant demand than seasonal demand), Dabur has
efficiently managed its raw material expenses and marketing expenses to
sustain its margins. Going ahead, with continued focus on the healthcare
portfolio and with DIL expected to get aggressive in the segment through
new launches and expansion in reach, we believe margins would improve
further to 18.5% by FY17E. We believe that aided by the company’s ability
to sustain a high brand equity in its segments, fluctuations in raw material
cost will be absorbed efficiently without impacting margins. However, any
savings in raw material costs would be directed towards higher
advertisement & promotion expenses.
Exhibit 3: EBITDA margins (%), RM cost to sales (%) and adex to sales (%)
60
18.6
18.5
16.6
17.4
16.8
50
18.5
16.5
17.0
14.1
16.3
15.4
16.4
16.0
17.0
18.4
18.5
FY16E
FY17E
14.3
40
30
20
10
0
FY09
FY10
FY11
FY12
Q1FY13 Q2FY13 Q3FY13 Q4FY13
RM Cost to Sales
FY13
EBITDA Margins
Q1FY14 Q2FY14 Q3FY14 Q4FY14
FY14
FY15E
Adex to Sales
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 4
20
18
16
14
12
10
8
6
4
2
0
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 ~15000 villages in FY11 to ~43000 villages in
FY14. The extension in rural India paid off well for the company in
capturing the booming rural demand in the country 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 last year, and now plans to consolidate its
position further. It plans to increase the number of SKUs in existing rural
distribution centre and increase its offerings in existing rural markets
along with a few new launches. Dabur plans to extend its rural reach to
~50,000 villages by FY16 and further to ~60,000 villages by FY17. On the
urban front, DIL is aiming to increase its presence in the chemist channels
of distribution considering the healthcare focus of the company’s
portfolio. Following the target to increase chemist coverage, DIL has
launched ‘Project CORE – Chemist Outlet and Range Expansion’ launched
in FY14. Further, the company increased its chemist distribution points
from 31,300 outlets (FY13) to ~75,000 outlets in FY15. Going forward, DIL
plans to extend this number to ~1,25,000 chemists in the next year.
Considering DIL’s strength of implementation, we believe that with the
company’s 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 healthy.
ICICI Securities Ltd | Retail Equity Research
Page 5
Outlook & Valuation
We believe DIL’s strong and niche product portfolio would continue to
derive healthy revenue and earnings growth at 15.3% and 22.5% CAGR in
FY14-16E. 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 company’s
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. Also, the looming risk of a weak monsoon and high
inflation could moderate consumer demand further. Hence, we remain
wary of growth in H1FY16E. Though until H1FY156E DIL could face some
margin and sales growth pressures in domestic business, we believe that
as higher price increases (5-6%) are induced and the expansion of
distribution network starts playing out for urban demand, growth would
gain traction.
DIL is currently trading at 31.2x FY17E EPS of | 8.2. We believe that with
margins expected to remain above ~17-18% by FY17E and sales growth
in the domestic business expected to revive given DIL’s strong brands in
niche segments, market development of the niche segments (packaged
foods & juices, health supplements) and revival in urban demand,
valuation multiples will command premium to its historic averages. We
value the stock at 30x FY17E EPS of | 8.7 and arrive at a target price of |
263 with a HOLD recommendation.
Exhibit 4: Valuations
FY14
FY15E
FY16E
FY17E
Sales Growth
(| cr)
(%)
7073.2
15.1
8048.1
13.8
9412.9
17.0
10336.6
10.0
EPS Growth
(|)
(%)
5.2
19.3
6.4
22.6
7.5
16.0
8.7
10.3
PE EV/EBITDA
(x)
(x)
42.9
33.7
35.0
27.9
30.2
23.2
29.6
23.0
RoNW
(%)
38.3
36.8
33.7
31.3
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 6
RoCE
(%)
42.4
43.4
42.3
39.7
Company snapshot
250
Target Price 263
200
150
100
50
Apr-17
Jan-17
Oct-16
Jul-16
Apr-16
Jan-16
Oct-15
Jul-15
Apr-15
Jan-15
Oct-14
Jul-14
Apr-14
Jan-14
Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
0
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
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
May-13
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 Company
Life Insurance Corporation of India
Burmans Finvest Pvt. Ltd.
First State Investments (HK) Ltd.
M B Finmart Pvt. Ltd.
Shareholding Pattern
Latest Filing Date
31-Mar-15
31-Mar-15
31-Mar-15
31-Mar-15
27-Apr-15
31-Mar-15
31-Mar-15
31-Mar-15
31-Mar-15
31-Mar-15
% O/S Position (m) Change (m)
12.41
217.9
0.0
12.39
217.7
0.0
11.51
202.2
0.0
10.77
189.2
0.0
8.85
155.5
0.1
6.04
106.1
0.0
3.43
60.2
-2.0
3.02
53.0
0.0
1.53
26.9
7.1
1.51
26.5
0.0
(in %)
Promoter
FII
DII
Others
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15
68.64 68.16 68.16 68.16 68.16
19.24 19.69 20.54 20.87 20.96
5.64
5.56
5.03
4.82
4.72
6.48
6.59
6.27
6.15
6.16
Source: Reuters, ICICIdirect.com Research
Recent Activity
Buys
Investor name
First State Investments (HK) Ltd.
GMO LLC
Columbia Threadneedle Investments
BlackRock Institutional Trust Company, N.A.
ASK Investment Managers Pvt. Ltd.
Source: Reuters, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Value
30.18m
10.49m
6.82m
4.29m
2.56m
Shares
7.08m
2.83m
1.60m
1.08m
0.86m
Sells
Investor name
Matthews International Capital Management, L.L.C.
Genesis Investment Management, LLP
HDFC Asset Management Co., Ltd.
Life Insurance Corporation of India
NNIP Advisors B.V.
Value
-34.27m
-27.46m
-8.71m
-5.44m
-4.37m
Shares
-8.04m
-6.44m
-2.05m
-2.04m
-1.40m
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
FY14
7073.2
15.1
3,400.0
607.7
999.7
642.9
287.7
5,938.0
1135.2
13.5
97.5
54.2
131.5
1,135.5
0.7
219.1
916.5
19.7
5.2
FY15E
7806.4
10.4
3,720.1
689.6
1,091.5
0.0
976.8
6,477.9
1328.5
17.0
115.0
40.1
157.6
1,351.8
0.0
250.9
1100.9
20.1
6.3
FY16E
9396.4
20.4
4,276.8
765.8
1,353.1
0.0
1,273.2
7,668.9
1727.5
30.0
138.5
18.6
165.4
1,757.7
0.0
386.7
1371.0
24.5
7.9
FY17E
10336.6
10.0
4,724.1
826.9
1,478.1
0.0
1,395.4
8,424.6
1912.0
10.7
151.6
18.6
173.7
1,938.5
0.0
426.5
1512.0
10.3
8.7
Source: Company, ICICIdirect.com Research
(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
FY14
1,135.5
97.5
-314.9
397.4
-214.4
1,101.1
10.5
-213.1
95.3
-107.3
0.1
-443.2
-278.8
0.0
-81.7
-803.7
190.1
329.3
519.4
FY15E
1,351.8
115.0
-298.7
-155.9
-210.8
801.4
-35.0
-350.0
0.0
-385.0
0.0
-115.0
-348.8
0.0
-40.1
-503.9
-87.5
519.4
431.9
FY16E
1,757.7
138.5
-846.7
136.3
-368.1
817.7
-35.0
-140.0
0.0
-175.0
0.0
-110.0
-436.0
0.0
-18.6
-564.5
78.2
431.9
510.0
FY17E
1,938.5
151.6
-1,013.8
120.9
-407.9
789.3
-110.0
-270.0
0.0
-380.0
0.0
-20.0
-523.1
0.0
-18.6
-561.7
-152.4
510.0
357.6
FY14
FY15E
FY16E
FY17E
5.2
5.8
15.2
1.8
3.0
6.3
7.0
19.5
2.0
2.5
7.9
8.7
24.9
2.5
2.9
8.7
9.5
30.6
3.0
2.1
16.3
14.2
13.0
49
34
56
17.2
15.3
14.1
50
35
36
18.6
16.9
14.6
60
36
29
18.7
17.1
14.6
70
45
25
38.3
42.4
30.8
36.3
42.7
30.0
35.4
44.4
30.5
31.3
39.7
27.7
49.0
38.5
6.3
6.3
16.9
40.7
33.0
5.7
5.7
13.1
32.7
25.4
4.7
4.8
10.3
29.6
23.0
4.3
4.3
8.4
0.2
0.1
1.3
0.9
0.1
0.0
1.5
1.0
0.0
0.0
1.8
1.2
0.1
0.0
2.1
1.3
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
FY14
FY15E
FY16E
FY17E
174.4
2,481.6
2,656.0
260.4
44.8
56.8
3018.0
174.4
3,233.7
3,408.1
160.4
44.8
56.8
3670.1
174.4
4,168.8
4,343.2
60.4
44.8
56.8
4505.2
174.4
5,157.7
5,332.0
100.4
44.8
56.8
5534.1
2,412.8
645.9
1,766.9
21.7
424.7
24.5
18.1
2,662.8
760.9
1,901.9
121.7
449.7
39.5
28.1
2,782.8
899.3
1,883.4
141.7
474.7
49.5
38.1
3,032.8
1,051.0
1,981.8
161.7
574.7
109.5
48.1
972.3
675.3
519.4
132.0
756.9
1,084.2
759.0
431.9
195.2
796.9
1,566.1
939.6
510.0
339.3
836.9
2,009.9
1,292.1
357.6
516.8
876.9
1,096.5
447.7
749.5
762.1
3,018.0
780.6
547.7
809.5
1,129.2
3,670.1
756.9
647.7
869.5
1,917.8
4,505.2
717.8
747.7
929.5
2,658.3
5,534.1
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
ICICIdirect.com coverage universe (FMCG)
EPS (|)
CMP
M Cap
Sector / Company
(|)
TP(|) Rating
(| Cr) FY15E FY16E FY17E
2,004 1,919 Hold 25,526 41.3 47.9
54.9
Colgate (COLPAL)
257
263 Hold 44,816
6.3
7.9
8.7
Dabur India (DABIND)
866
902 Hold 193,544 19.9 20.8
24.8
Hindustan Unilever (HINLEV)
322
387 Hold 280,748 11.9 12.4
14.1
ITC Limited (ITC)
241
272 Hold
5,159
8.7
9.8
10.1
Jyothy Lab (JYOLAB)
367
420
Buy 24,506
8.9 11.1
13.5
Marico (MARIN)
6,770 6,901 Hold 68,908 122.9 137.5 153.4
Nestle (NESIND)
138
182
Buy 10,080
6.2
7.8
8.7
Tata Global Bev (TATTEA)
1,600 1,700 Hold
2,674 99.3 88.2 106.3
VST Industries (VSTIND)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
P/E (x)
EV/EBITDA (x)
RoCE (%)
RoE (%)
FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E
48.5 40.0 36.5 31.1 26.3 22.8 103.5 99.6 96.6 78.8 74.5 71.1
40.7 33.5 29.6 33.0 25.4 23.0 42.7 44.4 39.7 38.3 36.3 35.4
43.5 43.3 35.0 36.6 32.4 27.0 124.6 126.2 126.9 118.0 109.3 101.7
27.2 31.1 22.8 20.2 19.6 18.2 43.7 44.3 46.5 33.5 32.8 33.7
27.8 27.8 23.8 29.7 28.0 25.6 12.1 12.0 12.6 11.1 19.2 19.7
41.3 37.9 27.2 29.3 23.3 19.5 48.8 48.9 45.8 29.0 35.9 33.6
55.1 50.2 44.1 32.6 30.0 26.9 67.6 70.7 75.4 47.2 45.3 48.9
22.3 23.2 15.9 13.0 11.8 10.9
8.1
8.6
9.0
8.2
6.3
7.6
16.1 19.3 15.1 10.9 11.2 10.0 59.3 52.5 60.3 45.8 43.2 37.5
Page 9
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
ANALYST CERTIFICATION
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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
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ICICI Securities Ltd | Retail Equity Research
Page 11