MOSL: DABUR (Buy)-Domestic FMCG volumes up 7.7%-EBITDA margin at historical highs
DABUR: Domestic FMCG volumes up 7.7%; EBITDA margin at historical highs
(DABUR IN, Mkt Cap USD9.8b, CMP INR371, TP INR435, 17% Upside, Buy)
- DABUR's 4QFY18 consol. sales grew 6.2% YoY to INR20.3b (est. of INR20.6b). EBITDA rose 16.2% YoY to INR4.9b (est. of INR4.4b). Adj. PAT increased 18.9% YoY to INR4b (est. of INR3.6b).
- Comparable domestic FMCG business (70% of revenues) sales grew 10% YoY, led by underlying volume growth of 7.7% (est. of +8.5%).
- EBITDA margin expanded 210bp YoY to 23.9% (est. of 21.5%), led by gross margin expansion (+170bp YoY to 50.7%), as well as lower ad spends (-20bp YoY) and staff costs (-10bp YoY). Note that this is the highest-ever EBITDA margin reported by DABUR on both quarterly and full-year basis. Adj. PAT grew 18.9% YoY to INR3.9b (est. of INR3.6b).
- FY18 consolidated sales, EBITDA and adj. PAT grew 0.6%, 7.2% and 7.2%, respectively. EBITDA margin expanded 120bp YoY to 20.9%.
- Comments on balance sheet: Inventory on finished goods increased in FY18 on account of higher forecast of sales and a change in the packaging norms.
- Concall highlights: 1) Slight tailwinds from macros. Category growth has been subdued, according to Nielsen. 2) Will be able to maintain gross margins in the domestic business due to price hikes. 3) Capex at INR2.5-3b for FY19 (toward capacity expansion).
Dabur India is engaged in manufacturing, marketing and distributing consumer goods and its related products. Co.'s products include hair care, oral care, health supplements, digestives and candies, baby and skin care, fruit juices, cooking pastes and sauces. Co.'s brand names include Dabur, Asavs, Classicals, Dabur Shilajit, Naturecare, Shankhpushpi, Honitus and Ring Ring. Co. operates three business divisions: Consumer Care Division, Consumer Healthcare Division and the wholly owned subsidiary, Dabur Foods Limited.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.