2010 - 11 - Dabur India Limited

Dabur India Limited // Half Yearly Report 2010-11
Management Discussion and Analysis
strategic futuristic planning and use of intelligent buying
mechanisms like calibrated hedging and e-sourcing.
to translate the good intentions into lasting results,
contributing to environment and the ultimate good of
the society.
11%
Chart 4: Monthly trends in WPI
10.6%
10.3% 10%
8.5%
8.6%
Financial Performance
The Company reported robust sales growth, growing
sales by 17% during the first half of fiscal 2010-11 to Rs.
1,905 crores. Gross margins came under pressure on
account of increase in material costs. In spite of that the
EBITDA margins were stable at 19.5% for the first half
of fiscal 2010-11. This was achieved through effective
sourcing strategies, other cost saving measures and
calibrated price increases.
Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10
Source: CSO Estimates
Effective planning and forecasting by a team of strategic
planners helped Dabur effectively keep its costs under
control and restrict price hikes to a minimum despite
high inflation on several commodities.
Environmental Initiatives
As part of its commitment towards environment, Dabur
initiated a host of new “Green” projects under which
alternative sources of energy are utilized as a substitute
for boiler fuel. Herbal extractors, for instance, have been
installed at all units and the company has completely
changed over to this energy efficient production
practice to reduce power consumption at its plants. The
company has started crushing waste herbs and recycling
the same to be used as bio-fuels. New boilers have been
installed in Baddi which used 80% waste herb and 20%
bio-briquettes as fuel. Dabur is continuously monitoring
its waste in adherence with the pollution control norms
and these measures have considerably reduced the
carbon emissions.
Efforts are also on in full swing to conserve and maintain
ground water level, and these include implementation of
rainwater harvesting, which has delivered encouraging
results and has put the company on the path to
becoming a Water-Positive Corporation. The ISO 14000 –
International Environment Management System – audit
has been completed at the Baddi cluster.
At Dabur, we are committed to sustainable development
throughout our diverse operations. And, we will strive
Consolidated PAT of the company increased by 16.9%
to Rs. 267.1 crores for the first half of fiscal 2010-11.
The effective tax rate of the company increased with
the increase in Minimum Alternate Tax (MAT ) from 15%
to 18%.
The net working capital (excluding cash and bank
balance) of the Company increased from 9 days to 20
days primarily on account of higher inventories due to
strategic stocking and higher loans and advances mainly
due to higher taxation.
A bonus issue of shares in the ratio of 1:1 was announced
and completed during the first half which resulted in
the equity share capital of the company expanding to
Rs.174.1 crore as of September 30, 2010.
In view of the strong performance, the company
announced an interim dividend of 50% i.e. Re. 0.50 per
share on the expanded equity capital.
Cautionary Statement
Statements in this Management Discussion and Analysis
describing the Company’s objectives, projections,
estimates and expectations may be ‘forward looking
statements’ within the meaning of applicable laws and
regulations. Actual results may differ substantially or
materially from those expressed or implied. Important
developments that could affect the Company’s
operations include a downward trend in the domestic
FMCG industry, rise in input costs, exchange rate
fluctuations, and significant changes in political and
economic environment in India, environment standards,
tax laws, litigation and labour relations.
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