Dissertation Report

on
Dabur India Limited
AMITY SCHOOL OF BUSINESS
NOIDA
AMITY UNIVERSITY
----------UTTAR PRADESH----------

Submitted to: Submitted

by:
Mr. Ashish Noel Akshay
Jhamb(D- 32) Lecturer
Bajrang Jain ( D-40)
Atul Madaan (D- 14)
Arun Prassanna (D- 36)
Niharika Verma ( D-11)
 Radhika Ahuja
(D-

INTRODUCTION
Dabur India Limited has marked its presence with significant achievements and
today commands a market leadership status. Our story of success is based on
dedication to nature, corporate and process hygiene, dynamic leadership and
commitment to our partners and stakeholders. The results of our policies and
initiatives speak for themselves.

 Leading consumer goods company in India with a turnover of Rs. 2834.11

Crore (FY09)
 3 major strategic business units (SBU) - Consumer Care
Division (CCD), Consumer Health Division (CHD) and International
Business Division (IBD)
 3 Subsidiary Group companies - Dabur International, Fem Care
Pharma and newu and 8 step down subsidiaries: Dabur Nepal Pvt
Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian Consumer Care
(Bangladesh), Asian Consumer Care (Pakistan), African Consumer
Care (Nigeria), Naturelle LLC (Ras Al Khaimah-UAE), Weikfield
International (UAE) and Jaquline Inc. (USA).
 17 ultra-modern manufacturing units spread around the globe
 Products marketed in over 60 countries
 Wide and deep market penetration with 50 C&F agents, more than 5000
distributors and over2.8 million retail outlets all over India.

Consumer Care Division (CCD) addresses consumer needs across

the entire FMCG spectrum through four distinct business portfolios of Personal
Care, Health Care, Home Care & Foods

 Master brands:
 Dabur - Ayurvedic healthcare products
 Vatika - Premium hair care
 Hajmola - Tasty digestives
 Réal - Fruit juices & beverages

Fem - Fairness bleaches & skin care products.

 9 Billion-Rupee brands: Dabur Amla, Dabur Chyawanprash,

Vatika, Réal, Dabur Red Toothpaste, Dabur Lal Dant
Manjan,Babool, Hajmola and Dabur Honey
  Strategic positioning of Honey as food product, leading to market
leadership (over 75%) in branded honey market
 Dabur Chyawanprash the largest selling Ayurvedic medicine with over 65%
market share.
 Vatika Shampoo has been the fastest selling shampoo brand in India
for three years in a row
 Hajmola tablets in command with 60% market share of digestive tablets
category. About 2.5 crore Hajmola tablets are consumed in India every
day
 Leader in herbal digestives with 90% market share

Consumer Health Division (CHD) offers a range

of classical Ayurvedic medicines and Ayurvedic OTC products that deliver the
age-old benefits of Ayurveda in modern ready-to-use formats

 Has more than 300 products sold through prescriptions as well as over the
counter
 Major categories in traditional formulations include:
- Asav Arishtas
- Ras Rasayanas
- Churnas
- Medicated Oils
 Proprietary Ayurvedic medicines developed by Dabur include:
- Nature Care Isabgol
- Madhuvaani
- Trifgol

Division also works for promotion of Ayurveda through organised community of

traditional practitioners and developing fresh batches of students.

International Business Division (IBD) caters to the health and

personal care needs of customers across different international markets,
spanning the Middle East, North & West Africa, EU and the US with its brands
Dabur & Vatika

 Growing at a CAGR of 33% in the last 6 years and contributes to about

20% of total sales
 Leveraging the 'Natural' preference among local consumers to increase
share in perosnal care categories.
HISTORY
The story of Dabur goes back to 1884, to a young doctor armed with a degree in
medicine and a burning desire to serve mankind. This young man, Dr. S.K.
Burman, laid the foundations of what is today known as Dabur India Limited. The
brand name Dabur is derived from the words 'Da' for ‘Daktar’ or ‘Doctor’ and 'bur'
from Burman. From those humble beginnings, the company has grown into
India's leading manufacturer of consumer healthcare, personal care and food
products. Over its 125 years of existence, the Dabur brand has stood for
goodness through a natural lifestyle. An umbrella name for a variety of products,
ranging from hair care to honey, Dabur has consistently ranked among India’s
top brands. Its brands are built on the foundation of trust that a Dabur offering will
never cause anyone slightest of harm. The trust levels that this brand enjoys are
phenomenally high.

FAMILY TREE OF DABUR

VISION
"Dedicated to the health and well being of every household"
PHILOSPHY OF DABUR
• This is our company. We accept personal responsibility, and accountability
to meet business needs.
• We all are leaders in our area of responsibility, with a deep commitment to
deliver results. We are determined to be the best at doing what matters
most.
• People are our most important asset. We add value through result driven
training, and we encourage & reward excellence.
• We have superior understanding of consumer needs and develop products
to fulfill them better.
• We work together on the principle of mutual trust & transparency in a
boundary-less organisation. We are intellectually honest in advocating
proposals, including recognizing risks.
• Continuous innovation in products & processes is the basis of our success.
• We are committed to the achievement of business success with integrity.
• We are honest with consumers, with business partners and with each
other.

DABUR’S BUSINESS MODEL

Manufacturing Facilities in India
REASONS BEHIND DABUR’S SUCCESS
Sales in FY09 grew by 18.3% to Rs 2834.1 crore from Rs 2396.3 crore in FY08.
This was on the back of robust volume growth in key categories such as
toothpaste, hair care and foods especially in rural India. It was led by rural India
along with the resurgence of the international business division. Going forward,
we expect net sales to grow at a CAGR of 16.9% over FY09-11E from Rs
2834.1crore in FY09 to Rs 3875.6 crore in FY11E. This will be led by new
product launches and the company’s foray into skincare via the FCPL
acquisition. The company is expected to benefit from a better distribution
footprint and operational efficiencies.
• Having alliances with other strong and popular businesses is a major plus
point for Dabur India as it helps bring in new customers and make business
more effective.
• Keeping costs lower than their competitors and keeping the cost
advantages helps dabur India pass on some of the benefits to consumers.
• Experienced employees are key to the success of dabur India helping to
drive them forward with expertise and knowledge.
• High quality machinery, staff, offices and equipment ensure the job is done
to the utmost standard, and is strength of dabur India.
• Dabur India has an extensive customer base, which is a major strength
regarding sales and profit.
• Dabur India’s reputation is strong and popular, meaning people view it with
respect and believe in it.
• Dabur India’s international operations mean a wider customer base, a
stronger brand and a bigger chunk of the global market.
• Supplier relationships are strong at dabur India, which can only be seen as
strength in their overall performance.
Dabur India limited In the Market
CODE:
BSE: 500096
NSE: DABUR

Current Market Price : 98.5

Dividend (D0) : Rs 2.00

Assumption:

Super Normal Profit : 21% For 3 years

Normal Growth : 18.225% and forever thereafter .

Market Price( Po) @ 20% is 138.69

@ 40% is 88.96.

So By interpolation we get

20/ 49.67* 40.17 = 16.17%

So marke Price is 20 + 16.17 = 36,17%

Value Of the Firm = NBT/ Ke

= 501/ 36.17%
= 1385.13
The actual shareholders fund for FY 10 is 935Cr and according to me it is
coming 1385.13, So the difference is of 450.13.

Interpretation:
• The share of the company is slightly overvalued in the market so there is
possibility that in the near future the prices of its share may come down. It
is littlie risky to invest in the company right now.

• The other reason can be that the market price which I have taken for
measurement may not be the same at that period of time when actually it
was taken into consideration.
GROWTH OF DABUR LIMITED COMPANY

The growth of 17% 3% is on account of the Hobi acquisition. So, the

normal organic growth is around 14% and the split is around 10% and 4%;
10%, volume and 4%, price.

By looking at the above graph we can see the growth has

been consistent throughout the past 5year tenure.
In the recessionary phase also the growth was not much
affected, there was a drop of 2.1% but due to its internal strengths the
company again picked up its growth from 15.5% to 20.00%. this is
why DABUR was ranked at the 19th position amongst India's Best
Wealth Creators.
Some of the reasons that lowered down the growth
in the previous Financial year were:
• Delay in retail foray
The company, which had planned to establish 350 retail stores of minimum store
area of 700 sq ft and maximum area of 6000 sq ft over a period of five years, has
trimmed down expansion plans due to severe financial pressures faced by the retail
industry. The company has opened nine stores and is fine-tuning the format,
location strategy and the rental costs of the stores to reflect the fall in real estate
prices. However, the velocity of sales expected has been adversely impacted,
thereby pressurising margins. Any significant losses incurred can subsequently
impact earnings.

• Foreign Currecny Fluactions

Insignificant Fluctuation in the foreign currency market also affected the company
and thus increasing the cost and lowering down the profits and the growth as well.
• Deficient monsoons
Depending on the severity of the monsoon deficiency, the company (which
derives around 50% of its revenues) and monsoon is the source of many of its raw
material has been severely hit by the monsoon condition prevailed in the last FY
year
• Inflationary pressures
This has also been the down fall in the growth of the company in the previous
Financial Year. This has relived but not to much of the extent.
Technique to overcome
Some of the thing that had helped DABUR to sustain in the
situation like Recession and come out successfully of it. This is
what makes the DABUR to maintain its position in the INDIAN
market.

• Conservation of Energy
The company has done things in conserving the energy and coming
Dabur has been undertaking a host of energy conservation measures.
Successful implementation of various energy conservation projects have resulted
in a 13.8% reduction in the Company’s energy bill in the 2008-09 fiscal
alone. What was noteworthy was the fact that this reduction has come despite an
8-9% volume increase in manufacturing, and an average 11.7% increase in cost
of key input fuels. The host of measures – key among them being use of bio-
fuels in boilers, generation of biogas and installation of energy efficient
equipment – helped lower the cost of production, besides reduce effluent and
improve hygiene conditions & productivity.
• Health Safety & Environmental Review
Renewing the commitment to Health Safety and Environment, Dabur has
formulated a policy focusing on People, Technology and Facilities. A dedicated
“Safety Management Team” has also been put in place to work towards the
prevention of untoward incidents at the corporate and unit level, besides educate
& motivate employees on various aspects of Health, Safety and Environment.
The Company is also continuously monitoring its waste in adherence with
the pollution control norms. In pursuance of its commitment towards the
society, efforts have also been initiated to conserve and maintain the ground
water level. The efforts include implementation of rainwater harvesting, which
has delivered encouraging results and has put the company on the path to
becoming a Water-Positive Corporation. Dabur also initiated a Carbon Foot
Print Study at the unit level with an aim to become a carbon positive
Company in years to come.
Dabur is committed to sustainable development throughout our diverse
operations. And, we will strive to translate the good intentions into concrete
and lasting results, contributing to the ultimate good of the society.
 • Technology Absorption
Dabur has also made continuous efforts towards technology absorption
and innovation, which have contributed towards preserving natural resources.
These efforts include:

• Minimum use of water in process by pre-concentration of herbal extract

and reduction in concentration time.
• Uniform heating in VTDs by hot water as against steam earlier, resulting in
30% reduction in bulk wastage by using non-stick coating and formulation
change.
• Improvement in water treatment plant through introduction of RO
(Reverse Osmosis) system for DM water, reutilization of waste water from
pump seal cooling and RO reject waste-water management.
• Introduction of water efficient CIP system with recycling of water in fruit
juice manufacturing
• Development of in-house technology to convert fruit waste into organic
manure by using the culture Lactobacillus burchi

• Strategic Intent
We intend to significantly accelerate profitable growth. To do this, we will:
• Focus on growing our core brands across categories, reaching out to new
geographies, within and outside India, and improve operational efficiencies
by leveraging technology
• Be the preferred company to meet the health and personal grooming
needs of our target consumers with safe, efficacious, natural solutions by
synthesizing our deep knowledge of ayurveda and herbs with modern
science
• Provide our consumers with innovative products within easy reach.
• Build a platform to enable Dabur to become a global ayurvedic leader.
• Be a professionally managed employer of choice, attracting, developing
and retaining quality personnel.
• Be responsible citizens with a commitment to environmental protection.
• Provide superior returns, relative to our peer group, to our shareholders
 • Research and Development contribution

Dabur India has a well equipped inhouse research wing - Dabur

Research & Development Centre (DRDC) – that follows a ‘brush-to-
brand’ approach. They have our in-house nursery, which grows
several rare herbs that go into various products. This in-depth
knowledge about nature and natural ingredients is one of our big
strengths in the market. DRDC also undertakes detailed tests on
individual ingredients and products to ensure that the final product
meets customer needs and aspirations.

The Company has achieved a host of significant benefits

in terms of product improvement, cost reduction,
product development, import substitution, cleaner
environment and waste disposal, amongst others.
Company in the Year 2009-2010
• In an intensely competitive environment, Dabur India Ltd. continued to drive
Industry-best volume-led growth and posted one of its best performances,
growing the Revenues by 20.6% and Net Profit by 28..
• 645, It is the percentage growth in Net Profit between 2001 and
2010. It is the strength of a corporate brand that has not only survived the
ups and downs of the economy, but more importantly gone on to report
strong growth year after year.
• The GDP, which recorded high growth of about 8-9% from 2004-05 to
2007-08, had slowed down to 6.7% in 2008-09 but recovered again in
2009-10, growing at 7.4.
• 15, It is the number of new brands, products and variants
launched by Dabur in 2009-10. The new launches - which include
Uveda range of Ayurvedic skin care products and Réal Burrst range of fruit
beverages - further strengthened Dabur's presence in existing categories
besides opening up newer avenues of growth.
• 14.6, It is the revenue increase in percentage terms during 2009-10
of Consumer Care Division, the largest SBU of the company, which
today accounts for 68.1% of total consolidated revenue.
• 20, It is the percentage growth of Dabur’s Toothpaste brands in 2009-10
making it among the fastest growing toothpaste companies in India.
• 25, It is the number in million of Hajmola tablets that are consumed
daily in India. It is the story of a brand that has been touching millions of
Indians daily thereby emerging as the most-preferred post-meal digestive in
the country and becoming a billion rupee produce.
• 20, It is the growth in percentage terms in 2009-10 of the foods business,
which now contributes 14.2% to the CCD sales, driven by both the
range of fruit juices and culinary portfolio. The Company, which primarily
operates in the packaged fruit juices & nectars market with Réal and Réal
Active.
CONCLUSION
Dabur is the most consistent company. The reason can be because of
the wide variety of the product line that the company is catering in the
sector.

Dabur has been a steady dividend paying company and has also
witnessed a sharp increase in its market cap, which has increased ten-
fold from Rs 17 billion in 2001 to more than Rs 170 billion in 2010. In
fact, a Motilal Oswal study had recently ranked Dabur as the biggest
wealth creator in the FMCG (non-Food) category during 2004 to 2009.
As per another study by Dalal Street Journal, Dabur was ranked at the
19th position amongst India's Best Wealth Creators. As per this study,
Rs. 1 lakh invested in Dabur in January 2005, would have become Rs.
5.04 lakh i.e. a gain of 404%.

The management and the employee are the base and the pillar of the
company and company is also doing so many things for its employee.

The company also gives good amount of “Return” to its shareholders.

the invertors also knows that the company is not a risky company its
shares do not fluctuate much.