Dabur Companyname

POST CONFERENCE NOTES

DABUR Healthcare and innovation focus to buoy prospects

India Equity Research| Consumer Goods

COMPANYNAME Key takeaways EDELWEISS 4D RATINGS

 Dabur is not seeing impact of covid-19 cases in the hinterland. Rural grew 1% YoY and Absolute Rating BUY urban declined 13% YoY in Q1FY21. Rural recovery has been much faster than urban. Rating Relative to Sector Outperform  The company clocked QoQ improvement in May and June. In July, it is trending at the Risk Rating Relative to Sector Medium level of June. However, there are pockets of disturbances still. Sector Relative to Market Underweight

 Launches contributed 6.1% to Q1FY21 revenue. With covid-19, innovation has been advanced. Healthcare launches are structural and not tactical. New launches are more MARKET DATA (R: DABU.BO, B: DABUR IN) relevant to current times. CMP : INR 493  Even if 50-60% of launches succeed, it is good. E-commerce platform will be used to Target Price : INR 545 52-week range (INR) : 528 / 385 scale up new launches. Share in issue (mn) : 1,767.4  New launches as % of revenue earlier were 1%. These launches should contribute 3– M cap (INR bn/USD mn) : 873 / 10,013 4% over the next three years. Avg. Daily Vol.BSE/NSE(‘000) : 2,356.0

 E-commerce contribution from 1.5% has now risen to 5.6%. The contribution is secular. Now reaching e-commerce directly and hence savings of 5%, which was SHARE HOLDING PATTERN (%)

earlier being given to stockiest. Current Q4FY20 Q3FY20 Promoters * 67.9 67.9 67.9  Ad spends have remained low, but will increase going ahead. MF's, FI's & BK’s 7.4 7.6 7.7  There are about 0.6mn villages in the country and Dabur is targeting to increase its FII's 17.6 17.4 17.5 presence to 60,000 villages by FY21-end. Others 7.1 7.1 6.9  Juices is declining because people in this category are moving to cheaper alternatives * Promoters pledged shares : Nil (% of share in issue) and milk-based beverages.

PRICE PERFORMANCE (%) Investment conclusion EW FMCG Stock Nifty Dabur has two divisions in India (consumer care and foods) apart from its international Index operations. The consumer care division (CCD) offers a wide range of products in hair care, 1 month 9.4 2.7 (0.1) oral care, health supplements, digestives & candies, baby & skin care products based on 3 months 4.4 10.5 6.0 ayurveda, over-the-counter (OTC) products and branded ethical & classic products. The 12 months 19.8 (1.0) 4.0 second division, Dabur Foods produces fruit juices, cooking pastes, sauces, and items for institutional food purchases. Dabur is well placed among its consumer goods peers because of its positioning as an Indian company whose products are derived from exotic sources such as ancient ayurvedic texts and natural ingredients such as herbs. As things normalise, we expect volumes to pick up riding company-specific strategies as well as expansion of the herbal market and strengthening rural distribution. We maintain ‘BUY/SO’. Abneesh Roy Financials +91 22 6620 3141 Year to March FY19 FY20E FY21E FY22E [email protected]

Revenues (INR mn) 85,331 87,036 88,809 97,841 Tushar Sundrani

Rev. growth (%) 10.5 2.0 2.0 10.2 +91 22 6620 3004 EBITDA (INR mn) 17,396 17,924 19,094 21,525 [email protected]

Adjusted Profit (INR mn) 15,216 15,479 16,759 19,239 Alok Shah Adjusted Diluted EPS (INR) 8.6 8.7 9.5 10.9 +91 22 6620 3040 [email protected] Diluted P/E (x) 57.4 56.4 52.1 45.4

EV/EBITDA (x) 49.8 47.6 44.0 38.7 ROAE (%) 26.7 25.2 23.5 23.6 August 20, 2020 Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL , Thomson First Call, Reuters and Factset. Edelweiss Securities Limited

Consumer Goods

Takeaways Post covid-19 recovery and demand scenario

 Domestic FMCG business declined 6.9% YoY due to the lockdown in April; volume fell 9.7% YoY.

 International business declined 21.6% YoY.

 Power brands declined just 1.0–1.2% YoY in Q1FY21. Power brand focus will remain, irrespective of the focus on the health & hygiene segment.

 Not seeing impact of covid-19 cases in the hinterland yet. Rural grew 1% YoY in Q1FY21 and urban declined 13% YoY in Q1FY21. Rural recovery has been much faster than urban. Super stockiest and sub-stockiest business in rural is doing far better than urban.

 Secondary domestic sales growth in June was 7% YoY in Q1FY21 in spite of HORECA, institutions, etc., not firing. Even for full quarter, secondary sales were -5% YoY. Hair care (-12%), home care and skin care recovery still below pre-covid-19 level. Foods is now down 17% YoY.

 Even if NPD success range is 50-60%, it is good. E-commerce platform will be used to scale up new NPDs.

 Using mass media as well as digital to promote NPDs. Tulsi drops clocked INR70mn. Once scale up of NPD happens, will shift to mass media.

 Factory operations restarted from the second week of April; currently operating at near normal level.

 Also looking to cut the tail by curtailing small products which are not growing.

 To manage supply chain better, Dabur has rolled out a new CRS module for more scientific management of inventories. Roll-out of New Drishti Module completed across 72% of stockiest despite covid. Has been going direct to 95% of e-commerce. Alternate suppliers identified and are being used wherever there is a constraint.

 Corrected pipeline in March and April. Pipeline earlier was 21-22 days and now it is 16- 17 days. Course correction underway in existing categories. Not looking to increase pipeline, so distributors RoI improves. Fair amount of inventory correction still required–of four-five days. Product availability is at 75%; need to reach about 90-95%. Will try to correct course this year. Now able to monitor secondary sales. Working on continuous replenishment model. Moved from cheque to NACH and other digital payment methods for stockiest. Settlement of claims will be paperless.

 Sales and operational meeting undertaken every week.

 Now monitoring inventories at SKU wise at the stockiest level.

 NPD timelines will be crunched from 1.0-1.5 years to two months.

 NPDs as % earlier was 1%. Structurally these launches should contribute 3–4% over the next three years.

 INR500mn would be revenue contribution in healthcare range from NPDs.

 Result of immunity-enhancing products from Ministry of Ayush is pending.

 The company will be very cautious of GM in new categories.

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 GT is on recovery path; MT declined 28% YoY and still some time for recovery to happen. CSD was -50% YoY and recovery not seen in July. Big Bazaar not doing well and DMart is also slow.

 There are 0.6mn villages and the company is targeting 60,000 villages by FY21-end.

Healthcare

 Growth of 29.2% YoY in Q1FY21. Contribution now 40%. This portfolio is higher-margin business.

 Health supplements recorded growth of 52.6% YoY. Recorded strong growth of ~700% in Dabur Chyawanprash and robust double-digit growth in Dabur Honey. Dabur’s market share in Chyawanprash category increased by ~600bps and in honey by ~300 bps. This surge may not sustain, but it may get compensated by a pick up in other categories. Launching new formats in Chyawanprash, which will bring down prices. Honey has grown at 69% YoY. Lost one week’s sales in honey owing to lack of glass bottles and honey. Market share in honey is now at 50% from ~30% earlier.

 Digestives: The digestives portfolio impacted due to restricted outdoor activity, minimal outside food consumption and closures of restaurants. Seeing improvement since the easing of lockdowns.

 OTC: Grew 34.4% YoY in Q1FY21. Honitus saw its sales almost doubling this quarter. Lal Tail declined during the quarter, but is seeing improvement since the easing of lockdowns. NPDs added to the momentum of the portfolio.

 Ethical: Grew 10.7% YoY in Q1FY21. Ethicals grew in double digits on the back of strong growth in all immunity-related brands. Immunity@Doorstep initiative reaches 1.5mn+ consumers and 10,000+ households. Approximately INR120mn of ethical have been moved to main stream of INR500mn revenue of NPDs.

 Tulsi drops, tablets and powder already present in ethical portfolio. It has just moved from ethicals to OTC. Dabur has undertaken a facelift from chemist to grocery channels.

 Will get into value-added immunity teas.

HPC

 Decline of 14.9% YoY in Q1FY21.

 Oral care: Grew 1.4% YoY in Q1FY21. Toothpaste portfolio recorded a growth of 2.6% YoY. Red Toothpaste reported growth of 8.1% YoY. Toothpaste market share improved by ~60 bps. Launched Dabur Dant Rakshak in regions where equity of Dabur Red is weak.

 Hair oil: Declined 25.6% YoY in Q1FY21. Hair oil category witnessed significant decline in Q1FY21, as per Nielsen. In pure coco oils, market shares saw an increase of 20bps and in perfumed oils, the market shares saw an increase of 40bps. Dabur sarsaon amla recorded best-ever growth. Seeing higher sales throughput of value offerings.

 Shampoo: Decline of 9.3% YoY in Q1FY21. The shampoo category witnessed significant decline in Q1FY21, as per Nielsen. Market share in the shampoo category increased by ~120bps.

3 Edelweiss Securities Limited Consumer Goods

 Home care: declined 30.5% YoY. Odonil declined on account of its discretionary nature but saw an increase in MS of ~290bps. Odomos declined by low single digit but showed sequential improvement. Odomos saw an increase of 270bps in market share.

 Skin care: The category declined 12.5% YoY in Q1FY21. Dabur Sanitize Hand Sanitisers range reported a strong performance. Dabur Sanitize registered sales of INR800-900mn, globally. Fem and Gulabari reported muted performance on account of their discretionary nature. Ex of sanitiser, sales decline would be 50% YoY.

 In home and hygiene new launches, some are structural and some are tactical.

 In oral care, launches will target INR40 price point. Test marketed in Hindi-speaking belt. Extremely good product with 20–30% repeat purchase.

 In hair oil, lighter format under Dabur Amla. This is extremely strategic.

 Looking to roll out products across baby products. Will be rolled out on Amazon exclusively to begin with.

Foods

 Decline of 34.4% YoY in Q1FY21 while the category declined 50% YoY.200ml contributes 40% to business, which was severely impacted. Horeca and institution contributes 15% to the segment.

 Before covid-19, this category grew at 10%. Expect to go back to this trajectory once normalization happens.

 People in this category are moving to cheaper alternatives and milk based beverages.

 Also people were avoiding cold and sugar-based drinks, which led to a decline in revenues.

 Beverages declined 36.2% YoY in Q1FY21. J&N category showed a volume decline of 51.4% YoY in Q1 FY21. However, Real has increased its market share by ~260bps. In the fruit drinks category, launched Real Mango Drink in PET format and Real Apple Mini in INR10 pack.

 Have expanded play into larger categories.

 Culinary range grew at 5.9% YoY. Launched a range of chutneys & pickles and imli (tamarind) sauce. Dabur provides legacy to trust and quality to new launches and hence will keep Dabur as face. Once Hommade becomes decent size, will slowly move Dabur brand out.

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International business

 International Business reported a decline of 21.6% YoY in Q1FY21. In June, recovered 1.8% YoY. Seeing recovery in July also barring Nepal. Nepal business is down -17% YoY.

 MENA was impacted by covid-19 and macroeconomic headwinds.

 Expats leaving MENA is also an issue. Now entering newer categories in MENA. This business should recover now.

 Egypt recorded a decline of 26.1% YoY Q1FY21.

 Hobby had a strong quarter, growing by 33.5% YoY in Q1FY21

 Namaste’s US business reported strong 12.3% YoY growth in Q1FY21.

 While Nepal business saw a decline of 53% YoY on account of curfews in the country, Bangladesh saw growth of 14% YoY.

 Turkey, USA business have both started doing well. Will remain cost conscious in international business.

 ROI of MENA and Namaste is much better. Nepal is where juice is manufactured; hence ROI is lower. Sri Lanka has always been a backup plan in case something happens to the Nepal plant. Now exports are happening from Sri Lanka. Capacity utilisation of Sri Lanka is very low.

 Profitability is improving in HOBI business.

 Namaste business is doing well with people staying at home. New styling products were launched when relaxers were down.

RM and margins

 In domestic business GM expanded backed by benign RM prices even if HPC business declined. There was 1.5% price increase carry over. In International business, consumer promotions were higher. This coupled with pressure in MENA led to flattish overall GM. Agri basket too has seen inflation of 3%.

 Healthcare is a higher gross margin business.

 Project Samriddhi – all aspects of value chain will be seen. All costs—direct as well as indirect—will be critically examined. Will benchmark with best in class. Outside consultants have been also roped in. Will look at INR1200mn in cost savings. Already budgeted INR400mn of savings for this year.

 Focused on Digital Communication with brand relevant messages.

 Ad spends have remained low but will increase going ahead.

5 Edelweiss Securities Limited Consumer Goods

Company Description Dabur has two divisions in India (Consumer care division and Foods division) apart from its international operations. Within domestic business, HPC contributes approx 50%, healthcare contributes approx 32% and foods contributes approx 18% revenues. Within HPC and healthcare, it offers a wide range of products in hair care, oral care, health supplements, digestives and candies, baby and skin care products based on ayurveda, over- the-counter (OTC) products, and branded ethical and classic products. Dabur Foods produces fruit juices, cooking pastes, sauces, and items for institutional food purchases. Dabur is well placed among its Consumer Goods peers because of its positioning as an Indian company whose products are derived from exotic sources such as ancient ayurvedic texts and natural ingredients such as herbs.

The company has various brand leaders in different market segments - Dabur Chyawanprash, a health tonic, and Hajmola - a digestive tablet. Real, launched during 1996- 97, has also successfully become the leader in the market.

Investment Theme Dabur’s broad product portfolio provides a good play on Indian Consumer Goods spend by virtue of its strong presence in less penetrated and high growth categories. Dabur’s positioning on the ‘health and wellness’ platform, backed by its ANH (ayurvedic/natural/herbal) image is very progressive. This, combined with its demonstrated ability to create new categories and sub-categories, makes it well-placed to capture lifestyle changes-led growth in the Consumer Goods space. Improvement in margins of foods and international businesses are expected to result in improvement in margins for the consolidated operations.

Key Risks A slowdown in rural demand due to lower government spending or monsoon failure could impact Dabur’s revenues significantly.

Further rise in competitive intensity in categories like Shampoo, Oral care, hair oils, juice (ITC has come out with aggressive ads and national rollout) may put pressure on volumes.

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Financial Statements Key Assumptions Income statement (INR mn) Year to March FY19 FY20 FY21E FY22E Year to March FY19 FY20 FY21E FY22E Macro Net revenue 85,331 87,036 88,809 97,841 GDP(Y-o-Y %) 6.8 5.0 5.8 6.5 Total operating income 85,331 87,036 88,809 97,841 Inflation (Avg) 3.4 4.3 4.8 5.0 Materials costs 43,090 43,602 44,582 49,312 Repo rate (exit rate) 6.3 5.2 4.5 5.0 Employee costs 9,379 9,477 9,680 10,078 USD/INR (Avg) 70.0 71.5 71.0 70.0 Ad. & sales costs 6,083 6,500 5,950 6,849 Company Other Expenses 9,382 9,533 9,503 10,078 Int rate on debt (%) 7.0 8.5 12.0 15.5 EBITDA 17,396 17,924 19,094 21,525 Volume growth (domestic) 11.0 1.1 4.5 8.0 Depreciation 1,769 2,205 2,238 2,374 International bus growth 8.0 5.0 (2.5) 10.0 EBIT 15,627 15,719 16,856 19,151 Staff costs (% of rev) 11.0 10.9 10.9 10.3 Less: Interest Expense 596 495 501 492 COGS as % of sales (Con) 50.5 50.1 50.2 50.4 Add: Other income 2,961.7 3,052.9 3,431.05 4,055.09 A&P as % of sales 7.1 7.5 6.7 7.0 Profit Before Tax 17,993 18,277 19,787 22,714 Financial assumptions Less: Provision for Tax 2,786 2,797 3,027 3,475 Tax rate (%) 15.5 15.3 15.3 15.3 Less: Minority Interest 10 - - - Capex (INR mn) 931 5,043 2,034 3,000 Exceptional items (753) - - - Debtor days 33 35 30 30 Reported Profit 14,463 15,479 16,759 19,239 Inventory days 108 112 99 99 Exceptional Items (753) - - - Payable days 121 123 120 120 Adjusted Profit 15,216 15,479 16,759 19,239 Cash conversion cycle 20 24 9 9 Shares o /s (mn) 1,766 1,767 1,767 1,767 Dep. (% gross block) 5.7 6.3 5.9 5.8 Adjusted Basic EPS 8.6 8.8 9.5 10.9 Dividend payout 22.1 23.5 40.0 40.0 Diluted shares o/s (mn) 1,773 1,773 1,773 1,773 Yield on cash 8.0 8.5 9.5 8.5 Adjusted Diluted EPS 8.6 8.7 9.5 10.9 Adjusted Cash EPS 9.6 10.0 10.8 12.2 Dividend per share (DPS) 1.5 1.6 3.8 4.4 Dividend Payout Ratio(%) 22.1 23.5 40.0 40.0

Common size metrics Year to March FY19 FY20 FY21E FY22E Materials costs 50.5 50.1 50.2 50.4 Ad. & sales costs 7.1 7.5 6.7 7.0 EBITDA margins 20.4 20.6 21.5 22.0 Net Profit margins 17.8 17.8 18.9 19.7

Growth ratios (%) Year to March FY19 FY20 FY21E FY22E Revenues 10.5 2.0 2.0 10.2 EBITDA 7.6 3.0 6.5 12.7 Adjusted Profit 10.9 1.7 8.3 14.8

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Balance sheet (INR mn) Cash flow metrics As on 31st March FY19 FY20 FY21E FY22E Year to March FY19 FY20 FY21E FY22E Share capital 1,766 1,767 1,767 1,767 Operating cash flow 14,991 16,136 21,876 21,635 Reserves & Surplus 54,550 64,290 74,299 84,260 Financing cash flow (18,882) (10,430) (9,582) (10,769) Shareholders' funds 56,317 66,058 76,066 86,027 Investing cash flow 3,369 (5,168) (2,034) (3,000) Minority Interest 314 365 365 365 Net cash Flow (522) 538 10,260 7,866 Long term borrowings 306 1,629 1,280 931 Capex (931) (5,043) (2,034) (3,000) Short term borrowings 6,732 3,042 2,391 1,740 Dividend paid (3,194) (3,409) (8,082) (9,277) Total Borrowings 7,038 4,671 3,671 2,671 Share issue/(buyback) 5 1 - - Long Term Liabilities 595 629 629 629

Def. Tax Liability (net) 231 174 174 174 Profitability and efficiency ratios Sources of funds 64,496 71,897 80,905 89,867 Year to March FY19 FY20 FY21E FY22E Gross Block 31,389 36,432 39,432 42,432 ROAE (%) 26.7 25.2 23.5 23.6 Net Block 16,001 18,728 19,490 20,116 ROACE (%) 28.5 27.9 26.8 27.4 Capital work in progress 638 1,466 500 500 Inventory Days 108 112 99 99 Intangible Assets 3,690 3,802 3,802 3,802 Debtors Days 33 35 30 30 Total Fixed Assets 20,328 23,995 23,792 24,417 Payable Days 121 123 120 120 Non current investments 26,334 14,092 14,092 14,092 Cash Conversion Cycle 20 24 9 9 Cash and Equivalents 10,536 22,024 33,615 41,480 Current Ratio 1.9 2.6 3.0 3.2 Inventories 13,005 13,796 12,092 13,375 Debt/EBITDA (x) 0.4 0.3 0.2 0.1 Sundry Debtors 8,336 8,139 7,299 8,042 Debt/Equity (x) 0.1 0.1 - - Loans & Advances 622 377 377 377 Adjusted Debt/Equity 0.1 0.1 - - Other Current Assets 5,207 11,117 11,117 11,117 Net Debt/Equity (0.1) (0.3) (0.4) (0.4) Current Assets (ex cash) 27,169 33,429 30,886 32,911 Interest Coverage Ratio 26.2 31.7 33.7 39.0 Trade payable 14,554 14,822 14,657 16,212

Other Current Liab 5,317 6,822 6,822 6,822 Operating ratios Total Current Liab 19,871 21,643 21,479 23,034 Year to March FY19 FY20 FY21E FY22E Net Curr Assets-ex cash 7,298 11,786 9,407 9,877 Total Asset Turnover 1.3 1.3 1.2 1.1 Uses of funds 64,496 71,897 80,905 89,867 Fixed Asset Turnover 4.3 4.1 3.9 4.1 BVPS (INR) 31.8 37.3 42.9 48.5 Equity Turnover 1.5 1.4 1.2 1.2

Free cash flow (INR mn) Valuation parameters Year to March FY19 FY20 FY21E FY22E Year to March FY19 FY20 FY21E FY22E Reported Profit 14,463 15,479 16,759 19,239 Adj. Diluted EPS (INR) 8.6 8.7 9.5 10.9 Add: Depreciation 1,769 2,205 2,238 2,374 Y-o-Y growth (%) 10.6 1.7 8.3 14.8 Interest (Net of Tax) 504 420 424 416 Adjusted Cash EPS (INR) 9.6 10.0 10.8 12.2 Others (3,011) (2,294) 77 75 Diluted P/E (x) 57.6 56.6 52.3 45.5 Less: Changes in WC (1,267) (327) (2,379) 470 P/B (x) 15.6 13.3 11.5 10.2 Operating cash flow 14,991 16,136 21,876 21,635 EV / Sales (x) 10.2 9.8 9.5 8.5 Less: Capex 931 5,043 2,034 3,000 EV / EBITDA (x) 50.0 47.8 44.2 38.8 Free Cash Flow 14,060 11,093 19,842 18,635 Dividend Yield (%) 0.3 0.3 0.8 0.9

Diluted P/E (X) EV / EBITDA (X) ROAE (%) Name FY21E FY22E FY21E FY22E FY21E FY22E Dabur 52.3 45.5 44.2 38.8 23.5 23.6 Colgate 45.4 41.6 29.1 26.7 53.1 54.9 Emami 39.0 30.5 20.6 17.8 20.8 23.5 Hindustan Unilever 65.4 56.5 45.8 40.0 33.8 23.1 Marico 45.9 40.8 31.2 28.2 31.2 30.5 Median 45.9 41.6 31.2 28.2 31.2 23.6 AVERAGE 49.6 43.0 34.2 30.3 32.5 31.1 Source: Edelweiss research

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Additional Data Directors Data Mr. Amit Burman Chairman Mr. Saket Burman Promoter Director Mr. Mohit Burman Promoter Director Mr. P. D. Narang Executive Director Mr. R. C. Bhargava Independent Non-Executive Director Mr. P. N. Vijay Independent Non-Executive Director Dr. S. Narayan Independent Non-Executive Director Dr. Ajay Dua Independent Non-Executive Director S. K. Bhattacharyya Independent Non-Executive Director Ms. Falguni Nayar Independent Non-Executive Director Ajit Mohan Sharan Additional Director Mohit Malhotra Chief Executive Officer Mr. Aditya Burman Additional Director

Auditors - Walker Chandiok & Co, LLP *as per last annual report

Top 10 holdings Perc. Holding Perc. Holding Life Insurance Corp Of India 2.74 First State Investments 1.69 Matthews International Capital 1.37 Mitsubishi Ufj Financial Group 1.35 Blackrock 1.25 Aditya Birla Sun Life Trustee 1.11 Arisaig India Fund 1.11 ICICI Prudential Asset Mgmt Co 0.80 Mirae Asset Global Investments 0.65 Aditya Birla Sun Life Amc 0.50 *as per last available data

Bulk Deals Data Acquired / Seller B/S Qty Traded Price

No Data Available

*in last one year

Insider Trades Reporting Data Acquired / Seller B/S Qty Traded

No Data Available

*in last one year

9 Edelweiss Securities Limited RATING & INTERPRETATION

Company Absolute Relative Relative Company Absolute Relative Relative reco reco risk reco reco Risk Asian Paints BUY SO M Bajaj Consumer Care HOLD SP H Berger Paints BUY SP L Britannia Industries BUY SO L Colgate HOLD SP M Dabur BUY SO M Emami BUY SP H Future Consumer HOLD SP M GlaxoSmithKline Consumer Healthcare BUY SP M Godrej Consumer BUY SO H Hindustan Unilever BUY SO L ITC HOLD SU M Marico HOLD SP M Nestle Ltd BUY SO L Pidilite Industries BUY SP M United Spirits REDUCE SU H

ABSOLUTE RATING

Ratings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING

Ratings Criteria Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe within the sector

RELATIVE RISK RATING

Ratings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING

Ratings Criteria Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return

10 Edelweiss Securities Limited Dabur

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai – 400 098. Board: (91-22) 4009 4400, Email: [email protected]

Aditya Narain

Head of Research [email protected]

Coverage group(s) of stocks by primary analyst(s): Consumer Goods Asian Paints, Bajaj Consumer Care, Berger Paints, Britannia Industries, Colgate, Dabur, Future Consumer, Godrej Consumer, Emami, Hindustan Unilever, ITC, Marico, Nestle Ltd, Pidilite Industries, GlaxoSmithKline Consumer Healthcare, United Spirits

Recent Research

Date Company Title Price (INR) Recos

19 -Aug-20 United Spirits Gradual recovery in 591 Reduce challenging times; Post Conference Notes 19-Aug-20 Pidilite Rural and small towns driving 1453 Buy Industries recovery; Post Conference Notes 19-Aug-20 Marico VAHO recovery key; 374 Hold Post Conference Notes

Distribution of Ratings / Market Cap Edelweiss Research Coverage Universe Rating Interpretation

Buy Hold Reduce Total Rating Expected to

Rating Distribution* 161 67 11 240 Buy appreciate more than 15% over a 12-month period * 1stocks under review Hold appreciate up to 15% over a 12-month period > 50bn Between 10bn and 50 bn < 10bn 743 Reduce depreciate more than 5% over a 12-month period Market Cap (INR) 156 62 11 594

One year price chart 446 550

(INR) 297 500

149 450

- (INR) 400

14 14

- -

- - -

350

Jul

Jan

Jun

Oct

Apr

Sep Feb

Dec

Aug Nov

Mar May

300

19 20

19 20 20

20 20

- - -

- -

Jul

Jan

Jun

Oct

Apr

Sep Feb

Dec

Aug Aug Nov

Mar May Dabur

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Consumer Goods

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