FMCG stock opened lower in today’s trading session as its subsidiaries face litigation in the US and canada.
The shares of FMCG company Dabur witnessed selling pressure in the Thursday morning session and are currently trading at 526 levels. The stock opened lower and went to hit intraday low of Rs 520.20 on NSE, indicating a loss around 2 percent against its Wednesday close of Rs 534 level.
The selling pressure was observed after the company disclosed the details about the US litigation pending against its subsidiary companies i.e Namaste Laboratories LLC, Dermoviva Skin Essential Inc and Dabur International Ltd in the filing on BSE.
The company is facing allegations of cancer spread from its drugs. However, the company claimed that cases are in pleadings and the early discovery phase of litigation.
Furthermore the company informed that at this stage of litigation,any financial implication due to settlement or verdict outcome cannot be determined. However,the defence costs for the litigation is expected to breach the materiality threshold in the near future.
Lately on 16th October the company received a GST notice from Directorate General of Goods and Service Tax Intelligence amounting 320 crore.
When we look into the Consolidated Financial statement of the company, it has recorded a revenue of Rs 3,130.47 crore and a net profit of Rs 456.81 crore during Q1 FY24.
Coming to the financial ratios of the company, Return on Equity (RoE) was 19.84 percent and Return on Capital Employed (RoCE) was 23.9% during FY 22-23.
According to the latest shareholding pattern, promoters have held 66.23 percent of stake with them. Meanwhile the Foreign Institutional Investors (FIIs) have 18.37 percent of holdings and 9.87 percent is held by Domestic Institutional Investors (DII).
Headquartered in Ghaziabad,Dabur Ltd is a multinational company founded by S.K Burman.The company manufactures Ayurvedic medicine and natural consumer products and is one of the largest Fast Moving Consumer Goods (FMCG) companies in India.
Written by Vaibhav Patil
