The shares of this largecap company jumped around 2 percent after signing an MoU with the Government of Tamil Nadu to set up a manufacturing plant. On a YTD the stock has delivered more than 15 percent return to its shareholders.
Price Movement:
With a market capitalization of Rs. 1,14,190 crores, the shares of Dabur India Ltd started Thursday’s trading session on a higher note at Rs. 637 compared to its previous close of Rs. 634.35. During the trading session, the shares hit a high of Rs. 647.70, gaining around 2 percent and are currently trading at Rs. 643 apiece.
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What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that it had signed a facilitation Memorandum of Understanding (MoU) with the Tamil Nadu government to establish a new consumer goods manufacturing plant in the Villupuram district, marking the FMCG company’s maiden foray into the South.
The MoU details an investment of Rs 400 crores over five years to build its first manufacturing facility in South India, situated at the SIPCOT Food Park in Tindivanam, Tamil Nadu, with an initial investment of Rs 135 crores.
This facility aims to cater to the growing demand for Dabur’s products in the southern market, including items like Dabur Honey and Odonil air fresheners and is expected to create direct employment for approximately 250 people, along with thousands of indirect jobs.
Management Commentary:
On this occasion, Dabur India CEO Mohit Malhotra said, “This investment will allow us to better serve the growing demand for our products in South India and strengthen our market presence in the region. We look forward to contributing to Tamil Nadu’s economic development by creating jobs and working closely with local vendors and supplier partners.“
The strategic location of the new unit will enhance Dabur’s ability to meet business and logistical requirements more efficiently, thereby offering significant advantage and growth opportunities, he added.
Financials:
Looking at the company’s financial statements, the revenue increased by around 19 percent from Rs. 2,815 crores during the March quarter to Rs. 3,349 crores in the June quarter. In addition, the net profits zoomed by around 45 percent from Rs. 341 crores to Rs. 494 crores during the same timeframe.
The company generates its revenue globally, with 24 percent coming from both the Middle East and Africa, 22 percent from Asia, and 15 percent each from Europe and America.
Important Financial Ratio:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 18.67 percent and a return on capital employed (RoCE) of 22.18 percent for the period spanning FY23-24. Further, during the same period, the net profit margin stood at 14.60 percent.
Company Profile:
Dabur India Ltd. is a prominent Indian consumer goods company and a global leader in Ayurveda, specializing in a wide range of products across various categories, including Hair Care, Oral Care, Health Care, Skin Care, Home Care, and Food & Beverages.
Written By Vaibhav Patil
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