Fourth Quarter/Full Year - Dabur India Limited

More documents

Recommendations

Info

Madhusudan : Is that a feel on stand alone number?Sunil Duggal :No, stand-alone like I said is Rs. 20 crores , that is the excise benefit whichflowed in. So, out of our profit of Rs. 148 crores, Rs. 20 crores can be attributed to excise.Madhusudan :Okay, and can we assume a similar or slightly bigger number in FY-06?Sunil Duggal: Excise savings will be more, yes, because we will get the full year of benefit.Madhusudan :No, I am asking on an incremental basis, Rs. 20 crores you have alreadysaved this last year, so on an incremental basis, can another Rs. 20 crores come in terms ofsavings in FY-06?Sunil Duggal :Probably not Rs. 20 crores.Madhusudan :You want to make a guess?Sunil Duggal : No.Madhusudan :Thanks and good luck.Sunil Duggal :Thank you.Nishid (Birla Sunlife) : Hello sir. Congrats for the excellent financial year. I have twoquestions. The first is the performance of the foods and the international business has beenexcellent, so what would be the outlook going forward for both these businesses, and thesecond is again on your food business, as you scale up, do you expect margins to improve?Sunil Duggal : Yes, definitely. The business is operating on comparatively low grossmargins, somewhere in the high 20s. As the business grows, the costs won’t go upcommensurately with increase in revenues. A lot of margin expansion, which you have seenin foods has come in because of top line, in fact almost entirely on account of top line.Definitely the business will progressively improve in profitability. Similar will be the situationin the international business.Nishid :Okay. Thanks.Yasmin (Anand Rathi Securities): Good evening sir. I just had one question. You havebeen telling that you will be launching some products in chawanprash - you were talking of anew range all together. How much have new products contributed to sales this year in FY-05 and how much do you anticipate them to be in FY-06?Sunil Duggal : The contribution of new product sales was approximately 6% to revenues inthe last financial year. This would not be very much off the mark in the next financial year.New products is inherently very unstable category, so it is hard to predict numbers for that,roughly 6% of sales is what you can expect.Yasmin :Right sir, and in the existing brands like chawanprash and all, barring the newlaunches what you are talking about, is there anything else that is left to be done to kind ofrejuvenate the category?Sunil Duggal :Absolutely, there is lots to be done. At the moment, we have been treating aschawanprash as a monolith brand for all the unique segments. There is a lot of merit infragmenting in the brand.Page 8 of 8
Yasmin :Okay, sir the last question pertains to, have you lost shares in any of thecategories?Sunil Duggal : None. We have maintained or improved shares in every category in which wehave been working in. There has been no share loss.Yasmin :Thank you sir.SSKI Securities.Nikhil (SSKI Securities) :Hello, Nikhil here. Just one thing on Balsara, how much of theproduction facilities are likely to shift in Baddi or any one of our existing facilities?Sunil Duggal :Substantial amount of Balsara production would come out of Baddi facility -very, very substantial amount. But other production facilities would be maintained.Gagan :Just to add to that, the Balsara business itself has a facility in Baddi.Nikhil :But that facility does not really enjoy the tax benefits, I believe, it is nearing the endright?Gagan :No this facility was also setup in 2004-2005, so it enjoys the same benefits.Sunil Duggal : Balsara also were following the same path of setting up units in excise freeareas and lot of production would be coming out of that. In fact, we would be moving someof our production also to Baddi unit.Nikhil : So we are seeing that part of the facilities will get shifted to our unit in Baddi andpartly you will utilize your existing facilities of Balsara.Sunil Duggal :Our facility is already operational. We were planning to expand capacities inour facility, which may not be necessary now because there is surplus capacity available inthe Balsara plant in Baddi. So we will make the most efficient production program. This willsave us a little bit in terms of capex, because we need not expand our own facility -toothpaste for example. We had substantial expansion plans, which may not be requirednow.Nikhil :Okay, thanks.Sunil Duggal :You are welcome.Janesh (Network Stockbroking) :Sir, I just have a few questions. One is on the Balsara,what kind of growth you had in FY-05, and you have said that you will be matching themargins for Balsara to the level of <strong>Dabur</strong> <strong>India</strong>?Sunil Duggal : That is not an immediate thing, that would take a little bit of time.Janesh :But is it excise benefit that would be the first or the major part which would becontributing it or it will be through other means also. Basically, I just want to understand howthe journey for margin growth would be for Balsara then?Sunil Duggal : The journey would be, one would be excise, which is one and the easiestone, but most importantly it would be by both extracting cost and revenue synergies with theamalgamation of the two businesses. We would be taking out a lot of cost from the Balsarasystem, and adding a lot of revenues synergies on account of the higher leverage we enjoyPage 9 of 9
Page 1 and 2: Dabur India LimitedFY04-05 Earnings
Page 3 and 4: so. The profitability of Balsara bu
Page 5 and 6: Sunil Duggal : Currently we carry i
Page 7: core portfolio, two brands, Lal Dan
Page 11: GaganThis brings us to the end of t

Fourth Quarter/Full Year - Dabur India Limited

Create successful ePaper yourself

Delete template?

Save as template?