Second Quarter - Dabur India Limited

Dabur India LimitedOctober 28, 2010again they will vanish in the summer, so this is a seasonality element and that will always makethis category a little bit volatile.Grishma Shah:Thanks a lot.Navin Trivedi from Pinc ResearchNavin Trivedi:Good afternoon Sir. What would be the CapEx in FY’11 and FY’12 and any specific category inwhich we are focusing?S Raghunathan:Our expectation is around Rs. 100-110 Crores of total consolidated basis CapEx for FY’11.Navin Trivedi:FY’12 any guidance for that?Sunil Duggal:It should be in the region of Rs. 120-150 crores.Navin Trivedi:So last quarter the CapEx would be on the capacity expansions or would it be for theinternational business?Sunil Duggal:I think next year there would be a substantial CapEx for Egypt, which actually should havehappened this year but there has been some delays in machining up of the plant. I would not ruleout, even though we have not mapped out Hobi yet, but there could be some CapEx’s there Ithink we need to do a little bit of upgradation in terms of the facilities and if you are looking athigh volumes coming out of the whole Hobi manufacturing then we need to scale up theirmanufacturing capacities quite a bit. But we have not mapped that out. And then there would be athird CapEx in the beverage arena where we are now little bit running out of capacity, thebusiness is growing extremely well and we will be adding substantial CapEx in Nepalparticularly.Navin Trivedi:Any kind of breakup in terms of domestic as well as the international, because most of thegrowth is coming from the international business?Sunil Duggal:Well this year this has been more 80-20 or 85-15, it should all be domestic. I think the next yearit would be more like two-third domestic, one-third international, but we have not fully mappedout the CapEx requirements for next fiscal, but it will be in the region of 120-150 Crores as Idiscussed.Navin Trivedi:We have already discussed on the gross margin thing, but I was just worried about one of thething that in second half FY’10 the gross margin was higher than the first half FY’10 given thescenario when the prices are on the rising trend would it be right to assume the severe fall in themargins in second half FY’11?Sunil Duggal:I do not think so, but your point is valid that last year was a very benign material costenvironment throughout the year particularly in the first three quarters, obviously there is a bit ofPage 18 of 25