Dabur Rises On Good Numbers

The share price of Dabur India hit an intraday high of Rs 48.25 before settling at Rs 47.70, up 3.58 per cent, on the BSE on impressive first-quarter performance. About 1.52 lakh shares were traded on the BSE and the NSE.

For the first-quarter, ended June 30, 2002, the fast-moving consumer goods (FMCG) major registered a 31 per cent rise in net profit to Rs 11.5 crore compared with Rs 8.8 crore in the corresponding quarter of the previous fiscal. Net sales jumped by 7 per cent to Rs 266.05 crore (Rs 248.90 crore).

Both net profit and net sales surpassed analysts' expectations. The company was expected to post a net profit of around Rs 9.7 crore. It would have been much higher but for the substantial increase in provisions for current and deferred tax, analysts said.

The company posted a strong top-line growth of 7 per cent in adverse market conditions. The key growth drivers for this performance were the FMCG and pharma businesses that recorded double-digit growth. Strong gains were also made because of the operational efficiencies that led to increase in operating margins by 96 basis points.

Dabur has a wide range of FMCG products. The company has three business divisions: family products, health-care products and ayurvedic specialities. It also has a number of over-the-counter (OTC) drugs.

The company's FMCG segment, which comprises personal-care and health-care products for hair care, oral care, tonics, digestives and child care, grew by 10.5 per cent and posted revenues of Rs 196.39 crore (74 per cent of total sales). Some of the company's leading FMCG brands include: Chywanprash, Hajmola, hair oil and shampoo (both under Vatika brand name).

Meanwhile, the pharmaceuticals business, comprising allopathic, oncology, formulations and bulk-drugs business, recorded a growth of 11.2 per cent to Rs 44.40 crore and accounted for 17 per cent of total sales.

The ayurvedic specialties division expanded by 8.9 per cent and recorded a turnover of Rs 17.72 crore.

Last month, the company separated pharmaceutical and FMCG. This is a prelude to hiving off of Dabur's pharma business into a separate entity at a later date. Under the new set-up, the pharma business will continue to remain under the ambit of Dabur India but will function as a separate business unit internally with separate business and functional heads. This new business unit will also maintain separate books of accounts.

Earlier, Dabur announced the development of a chemotherapy agent, DRF 7295, for treatment of throat cancer. The company was to complete phase one trials of DRF 7295 by March 2001, but the process was delayed because it decided to tie up with Quintiles Transnational Corp, US, to manage its clinical trials, so as to gain acceptability in America and Europe.

As on June 30, 2002, promoters' holding in the company stood at 78.5 per cent, while institutions and the public held 13 per cent and 7 per cent, respectively.