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Company Report

DABUR INDIA

Dabur has more than 25 brands encompassing a presence in healthcare, personal care, ayurvedic specialities, food and a host of international products. Recently, it hived off pharmaceutical business into a separate unit in order to focus on the personal care sector.

After a subdued September quarter the company has posted a better December quarter. Net sales at Rs 351.35 crore (Rs 319.75 crore) was up by 10 per cent both on a year-on-year as well as sequential quarter basis.

The pharmaceutical business comprising allopathic, oncology and bulk drug division, which contributes close to 14 per cent of the total revenue witnessed a healthy growth of 38 per cent over the previous corresponding quarter. This is now being separated.

At Rs 310.33 crore (Rs 282.72 crore) the operational cost was up by 10 per cent over the year-ago period, while sequentially it went up by 12 per cent.

Increase in costs being much the same as the increment in revenues, margins were under control on a year-on-year basis with operating profit rising 11 per cent to Rs 41.02 crore (Rs 43.84 crore). Sequentially, however, the rise in costs being a shade higher than the increase in revenues saw the operating profit come down by 1 per cent against Rs 41.55 crore earned in the preceding quarter.

Other income at Rs 1.48 crore (Rs 1.69 crore) was 12 per cent below the year-ago period, while interest cost, which was the same as year-on-year was up by a massive 124 per cent over the September quarter income cost of Rs 3.01 crore. Depreciation went up only marginally.

With a 17 per cent drop in the tax provision on a year-on-year basis and a 7 per cent sequential decline, net profit was Rs 26.72 crore (Rs 22.33 crore) up 20 per cent from the previous corresponding quarter. However, on a sequential quarter basis the same was down 12 per cent from the September quarter profit of Rs 30.31 crore.

The stock is currently trading at Rs 41 discounting its December quarter annualised earnings per share of Rs 3.74 by 11 times. The stock has come down heavily since mid-January and its valuation has hardly budged since the end of the preceding quarter.

Unless the growth trend in sales and profits continues for the next two or three quarters valuation is bound to remain at these levels.

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