Dabur India (DABUR) Q4 01/02 earnings summary

Executive summary

• Sales held broadly flat at Rs.1,163.19 crore in FY02; on a like-for-like basis, sales rose 1.9% after excluding discontinued herbal intermediates and export restructuring.

• PAT fell 17.3% to Rs.64.44 crore, chiefly due to a Rs.5.56 crore deferred-tax charge and Rs.5.75 crore of oncology clinical-trial costs; adjusted PAT was Rs.75.75 crore, up 1.1% YoY after specified exclusions.

• Gross margin improved to 41.8% from 40.4%; higher R&D and advertising costs weighed on operating margin and reported profit.

Financial highlights

• Sales were Rs.1,163.19 crore versus Rs.1,166.47 crore in FY01; PBT was Rs.75.51 crore versus Rs.85.17 crore, and PAT was Rs.64.44 crore versus Rs.77.92 crore.

• Advertising and promotional spending increased to Rs.154.5 crore, or 13.28% of sales, from Rs.146.1 crore, or 12.52% of sales.

• Financial expenses declined to Rs.23.95 crore from Rs.29.66 crore; employee costs rose to Rs.84.49 crore from Rs.77.69 crore.

• First-time consolidated sales were Rs.1,280.96 crore; consolidated PAT after minority interest was Rs.66.20 crore in the operating review.

Outlook and guidance

• FY03 plans prioritized core-brand investment, FMCG consolidation and expansion, and profitable growth without assuming a significant economic recovery.

• Pharma strategy targeted global oncology opportunities, improved operating efficiency, and stronger returns on investments already made; Accenture was engaged to review the business strategy.

• Efficiency and process initiatives across manufacturing, sales, distribution, purchasing and IT were expected to deliver benefits over the next 2–3 years.