Dabur India (DABUR) Q4 04/05 earnings summary

Executive summary

• Consolidated FY05 net sales rose 15.6% to Rs.1,537 crore; EBITDA increased 29.6% to Rs.218 crore and PAT after minority interest grew 46.3% to Rs.155.8 crore.

• Performance reflected stronger Foods and overseas sales, improved margins and supply-chain efficiencies; the Balsara acquisition closed on 1 April 2005, after FY05 close.

Financial highlights

• Standalone FY05 net sales increased 10.5% to Rs.1,268.7 crore; EBITDA rose 36% to Rs.187.9 crore and PAT grew 46.3% to Rs.148 crore.

• Consolidated PAT after minority interest was Rs.155.8 crore versus Rs.106.5 crore in FY04; diluted EPS was Rs.5.40 versus Rs.3.71.

• Standalone interest outgo fell 37.7% to Rs.4.3 crore, while PBT rose 45.5% to Rs.165 crore.

Outlook and guidance

• FY06 outlook was cautiously optimistic, conditional on Indian GDP growth above 6.5%; expected demand gains were concentrated in smaller towns and rural markets and likely volume-led.

• Priorities were to accelerate growth while protecting margins through brand equity, broader price-point coverage, plant fiscal benefits and procurement efficiencies.

• Input costs were identified as the key near-term concern; a dedicated modern-retail sales structure was planned amid potential retail-sector FDI and entry of international chains.

• UK OTC market entry was under evaluation, subject to MHRA certification and a potential retail-chain marketing alliance; US nutritional-supplement entry strategies were also in development.