A REPORT

ON
Business History

By:Group13

Anubhav Jain 19BSPHH01C1658

Avadhi Jain 19BSPHH01C0232
Dharmik 19BSPHH01C1654
Priyanka Tiwari 19BSPHH01C0845
Navya 19BSPHH01C0683
Praveen Kumar 19BSPHH01C0827

DABUR INDIA PVT. LTD

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 A REPORT
ON
BUSINESS HISTORY OF
DABUR INDIA PVT. LTD

By:Group13

Anubhav Jain 19BSPHH01C1658

Avadhi Jain 19BSPHH01C0232
Dharmik 19BSPHH01C1654
Priyanka Tiwari 19BSPHH01C0845
Navya 19BSPHH01C0683
Praveen Kumar 19BSPHH01C0827

This report submitted in partial fulfilment of the requirements of the MBA

Program of IBS Hyderabad.

Submitted to : Dr. Shaheen

Date: July 18, 2019

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Contents
INTRODUCTION TO INDUSTRY – FMCG SECTOR ...............................................................4

TIMELINE ...................................................................................................................................9

GLOBAL FOOTPRINT ............................................................................................................. 12

PESTEL ANALYSIS ON DABUR INDUSTRY .......................................................................... 13

(P)OLITICAL FACTORS: ......................................................................................................... 13

(E)CONOMIC FACTORS: ......................................................................................................... 13

(S)OCIO-CULTURAL FACTORS: ............................................................................................ 13

(T)ECHNOLOGICAL FACTORS:............................................................................................. 14

(E)NVIRONMENTAL FACTORS: ............................................................................................ 14

(L)EGAL FACTORS: ................................................................................................................. 14

Dabur India's CSR Policy ............................................................................................................... 15

Our CSR Vision....................................................................................................................... 15

Our CSR Mission .................................................................................................................... 15

Our Activities .......................................................................................................................... 15

Our Approach to Implementation ........................................................................................... 18

CSR Funds .............................................................................................................................. 18

Monitoring .............................................................................................................................. 19

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INTRODUCTION TO INDUSTRY – FMCG SECTOR

Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian
economy with Household and Personal Care accounting for 50 per cent of FMCG
sales in India. Growing awareness, easier access and changing lifestyles have been
the key growth drivers for the sector. The urban segment (accounts for a revenue
share of around 55 per cent) is the largest contributor to the overall revenue
generated by the FMCG sector in India However, in the last few years, the FMCG
market has grown at a faster pace in rural India compared with urban India. Semi-
urban and rural segments are growing at a rapid pace and FMCG products account
for 50 per cent of total rural spending.
Dabur India Ltd. (Dabur) is one of the leading FMCG companies in India with
revenue of over Rs 7,680 crore and market capitalisation of over Rs 48,800 Crore.
Dabur is the world’s largest Ayurvedic and Natural Health Care Company with a
portfolio of over 250 Herbal and Ayurvedic products. Dabur also recommends
various Ayurvedic Home Remedies formulated using ayurvedic plants and herbs
which are natural and chemical free. Dabur has two divisions in India: consumer
care division and foods division apart from its international operations.
The consumer care division (CCD) offers a wide range of products in hair care,
oral care, health supplements, digestives and candies, baby care, and skin care
products based on ayurveda, over‐the‐counter (OTC) products, Asavs, and branded
ethical and classic products. Consumer Healthcare division has been merged with
CCD to leverage distribution.
The second division, Dabur Foods Ltd produces fruit juices, cooking pastes,
sauces, and items for institutional food purchases. Dabur is well placed among its
consumer goods peers because of its positioning as an Indian company whose
products are derived from exotic sources such as ancient ayurvedic texts and
natural ingredients such as herbs. Its FMCG portfolio includes five flagship brands
with distinct brand identities -- Dabur as the master brand for natural healthcare
products, Vatika for premium personal care, Hajmola for digestives, Réal for fruit-
based drinks and Fem for fairness bleaches and skin care.
The ayurvedic company has a wide distribution network, covering six million retail
outlets with a high penetration in both urban and rural markets. Dabur's products
also have huge presence in the overseas markets and are today available in over
120 countries across the globe. Its brands are highly popular in the Middle East,
SAARC countries, Africa, US, Europe and Russia. Dabur's overseas revenue today
accounts for over 30 per cent of the total turnover.
Dabur’s consolidated net revenue contracted by eight per cent YoY to Rs 1790
crore. EBITDA declined by 11 per cent, while other income grew 33 per cent to Rs
81.3 crore. APAT was down by 5 per cent to Rs 276 crore.
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Domestic FMCG business
Dabur’s domestic business, which contributes 66 per cent of sales, de-grew by five
per cent, with decline of 4.4 per cent in volume growth owing to channel
destocking. Although the primary sales dipped five per cent, on the other hand, the
secondary sales grew 2 per cent YoY. The growth in MT was 5.8 per cent.
The Consumer care segment has seen a delay in recovery. The domestic consumer
business was heavily impacted by channel destocking. In the month of May and
June, the company witnessed very high promotional intensity. Overall destocking
was of Rs 100 crore. Netting off pipeline reductions, volume offtake was in
positive territory.
From second quarter of 2018 onwards, with GST roll out, optically sales may look
lower by six per cent since VAT, which was earlier added in top line, will not be
added.
The nature of promotions may change in GST owing to the way laws have been
framed. The off invoice will become 14 to 15 per cent more expensive. Hence,
promotions will shift from off invoice to on invoice. Going forward, 50 per cent of
off invoice promotions will move to on invoice.
Dabur has not taken price increase irrespective of rate increase. The blended price
hike is 1.2 per cent, but owing to promotional intensity that is not getting reflected.
There is a possibility of rate increase in the third quarter of 2018 and for fiscal
2018, price hikes will be about two to three per cent.

International business
The international business of Dabur remained under pressure, owing to geo-
political issues and unfavourable currency movements. The business declined by
2.2 per cent YoY in constant current terms; it was impacted by the slowdown in
Middle East and North Africa (MENA). The growth in local currency in many
geographies was healthy. Nepal saw double digit sales growth followed by 15 per
cent in SAARC. Turkey witnessed seven per cent growth in and Egypt posted three
per cent. The Gulf countries de-grew by 13 per cent.

Oral care
The toothpaste category grew by 10.4 per cent YoY, this was encouraging,
especially when Colgate clocked a 4 per cent decline.

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Toothpowder, which is 11 per cent of oral care, plummeted 35 per cent YoY. This
decline in toothpowder resulted in 1.5 per cent YoY growth in the oral care
business.
Dabur is also considering introducing White ayurvedic toothpaste; however, its
real threat is from Patanjali since there is still strong traction for that brand.

Healthcare
The health supplements category declined by seven per cent YoY impacted by
short summers and early rains. The market share in Honey has stabilized and
expects sharp improvement in market share. Broadly, the company continues to
give 25 to 30 per cent more as promotion.
Over-the-counter (OTC) and ethical dipped by 6.6 per cent YoY. The digestives
business posted four per cent YoY growth driven by Hajmola and Pudin Hara. The
focus on OTC & ethicals, health supplements and foods businesses, further
bolstered by Project CORE will play a key role in driving premiumisation for
Dabur. Project LEAD and rising coverage of doctors will boost healthcare
products.

Hair care
Dabur’s Hair Care category declined 11 per cent YoY. Its brands Sarson Amla,
Brahmi Amla and Almond Hair oil performed well despite uncertainty and down
stocking of inventory.
Dabur did not retaliate to competition from Marico in time. But the same will not
be repeated in juices category.

Home and Skin Care Categories

The Home category grew by 6.2 per cent YoY. The Odomos brand has started to
begin its full potential. It has been doing good and this franchisee has been on a
strong footing.
The Skincare category grew by 4 per cent YoY helped by double digit growth
in Gulabari and Fembleaches.

Food and Beverages segment

The beverages segment de-grew by 8.3 per cent YoY decline in sales. The
secondary growth was 4 per cent YoY. The foods category was impacted by major
de‐stocking and heightened discounting by competition. In North & Central India,
early monsoon in June has impacted sales.
The overall juice category has seen lot of promotional intensity and massive
destocking. There is no price increase expected in the category. B’natural has nine
per cent market share, which has increased the competitive scenario and the new
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flavors such as Real Mosambi and Real Wellnezz have performed well. At the
wholesale level, juices are managed by fat dealers; this kind of dealers specialize in
carbonated, NCB and juice category.
In coconut water company, there are many supply constraints; however, once this
is solved, the company will be able to double the growth rate. Next year, Dabur
will be able to take the volume up by two to three times.

CSD Channel
Canteen Stores Department (CSD) contributes five to six per cent of revenue. The
channel was weak; realisation in this segment is little lower than general market
and the company expect a delay in its recovery. As per management, government
is reducing the budget and process for CSD.
Going forward, the channel will shrink and is even instructed by the Ministry of
Defence since the Ministry believes there are some irregularities. The off-take
directly to Jawans and Army continues and higher salience in CSD are Amla and
Honey lower in Juice and Chawanprash.

Wholesale Channel
The channel has been in worse condition; presently, it’s not showing signs of
improvement and has a long way to go before it can see the sun shining. The
wholesale medium is not comfortable with full compliance yet and is most likely to
shrink. The impact on wholesale channel was higher in North and East.
This implies that Dabur will have to re‐channelise its distribution network.
Wholesale is 35 per cent and MT is 15 per cent, of which four per cent is
wholesale cash and carry. The super stock is about one-third which more so works
like wholesale and direct distribution is 950,000. The cost is increased to
compensate for margin to wholesalers would be one per cent.

Inventory Levels
Dabur’s inventory levels are at three times at which the market leader Hindustan
Unilever (HUL) operates. The inventory days are compressed by seven to eight
days and the company believes the inventory days may stay at these levels.
Inventory at distributor is 18 days.

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Capital Investment
The facilities in Sri lanka and Uttarakhand factory have commenced and two
tetrapack lines in Uttarakhand. For the current financial year 2018, the capital
expenditure Capex would be Rs 300 crore.

Positive Stance
Over the upcoming 2017-20 period, Dabur is expected to witness 17 per cent
earnings per share (EPS) CAGR and its domestic and international revenue are
expected to show 12 per cent CAGR each. Better revenue growth, stable inflation
and favourable product mix would expand EBITDA margin by 180bps over this
period.
The company is backed by strong revival in volume off take and improving market
share. The current fiscal year 2018 would see strong innovations. Dabur commands
a high operating margin of more than 19 per cent, along with return on capital
employed (RoCE) of more than 45 per cent.

Key Risks
A slowdown in rural demand due to lower government spending or monsoon
failure could impact Dabur’s revenues significantly. In addition to this, further rise
in competitive intensity in categories like Shampoo, Oral care, hair oils, juice may
put pressure on volumes. Dabur’s peer ITC has come out with aggressive ads and
national rollout.

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TIMELINE

1884 - Established by Dr. S K Burman at Kolkata

1972 - Shifts base to Delhi from Calcutta

1984 - Dabur completes 100 years

1988 - Launches pharmaceutical medicines

1994 - New products launched were `Dentacare,' Vatika and Lactonic which were
well received in the market.

1998
- Dabur India Ltd on 19th January 1998 launched low sodium cooking salt called
Nutrasalt in Chandigrah.
- Dabur signed a joint venture with Bongrain International SA of France to form a
new company called Dabon International Ltd
- Dabur India Ltd has launched a range of ayurvedic health care products for dogs
under the umbrella brand name Ayupet.
- Dabur India Ltd (DIL) has commissioned consultancy firm Noble and Hewitt to
script a employee stock option plan.
- Dabur India has tied up with Godrej Foods for the manufacture and packaging of
its `Real' range of fruit juices and fruit drinks in tetrapacks.

2004
-Dabur set to acquire Egyptian hair oil brand Touch
-Dabur India gets Tetra Pak award
-Dabur India inks pact with Accenture for outsourcing
-Implements `Spend visibility solution' software provided by FreeMarkets Inc to
control costs and strengthen the company's procurement process
-Dabur ties up Uttarnachal for cancer drug
-Dabur India has acquired a Nigerian company African Consumer Care Ltd, a step
precursor to its plans to go on-shore for manufacturing in the country

2005
-Delists equity shares from The Calcutta Stock Exchange Association Ltd (CSE)
with effect from January 27, 2005,
- Completes the acquisition process of Balsara Hygiene Products Ltd & Besta

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Cosmetics Ltd on April 16, 2005.

2006
-Dabur's Director P D Narang appoints as Chairman of PTL
-Dabur India secures prestigious National Award from ICSI
-Dabur promoters acquires stake in Vishal Mega Mart
-Dabur crosses $2 bln market cap, adopts US GAAP.
- Approves FCCB/GDR/ADR up to $200 million
-Dabur India has given the Bonus in the Ratio of 1:1

2008 - Launch of First Retail Store by Subsidiary Company

2011
- Dabur enters professional skin care market with the launch of OxyLife
Professional Facial Kit, created exclusively for professional use.
- Dabur India Ltd. launches its first-ever online shopping portal
www.daburuveda.com.
- Dabur India acquires 30-Plus from Ajanta Pharma.
- Dabur India Ltd sets up new subsidiary in Sri Lanka Dabur Lanka (Pvt.) Ltd.
- Dabur India Ltd launches Dabur Almond Hair Oil.

2012
- Namaste Cosmeticos Ltd, has been added as the Company's new step down
subsidiary Company in Brazil.
- Dabur India has expanded its range of fruit juices viz. Réal Activ.
- Mr. Lalit Malik has joined as Chief Financial Officer of the Company.

2014
-Dabur India Ltd Announces 125% Interim Dividend
-Dabur Launches Anmol Coconut Hair Oil with Jasmine
-Dabur Chyawanprash announces "Immune India School Challenge 2014"
-Dabur Launches India First Ayurvedic Medical Journal
-Dabur enters Packaged Coconut Water market with Real Activ

2015
-Dabur India Ltd has inked an agreement with Starcom MediaVest Group (SMG).
-Dabur India Ltd has introduced an array of professional salon facial products for
men and women under the Oxlife brand
-Dabur India has introduced the sugar-free version of its popular ayurvedic product
Chyawanprash named Ratnaprash SugarFree
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2016
-Dabur Unveils New Premium Natural Baby Care Brand
-Dabur acquires South African cosmetic firm Discaria Trading
-Dabur India launches fruit juice-based aerated drinks

2017
- Dabur India has tied up with e-commerce major Amazon for an online ayurveda
marketplace which will house all ayurvedic brands and products available in the
country.
-Dabur India Ltd inaugurated a skill development centre for women here, as part of
the company CSR campaign.
- Dabur India launched an on-the-wheels lab to test honey so as to help reduce
adulteration and ensure greater purity of the product.

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GLOBAL FOOTPRINT

As India’s largest ayurvedic healthcare and natural personal care company. Dabur
has been working towards making Ayurveda contemporary for the modern-day
consumer. Consumers particularly the millennials are increasingly embracing
natural products to meet their daily health and personal care needs. Dabur is best
placed to offer natural solutions to consumers across the globe. Dabur has been
placed with to offer natural solutions to consumers across the globe. The partner
with amazon via their global selling program which allows us direct access to their
consumers in the US and expand our footprint exponentially. Dabur has
significantly strengthened over rural footprint width Dabur now reaching close to
42000 villages across the country Dabur India plans to expand and strengthen its
distribution network with a focus on its direct reach. India said the company it has
been focusing on growing its distribution network not only in traditional trade but
also in emerging channels like modern trade and e-commerce.
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PESTEL ANALYSIS ON DABUR INDUSTRY

(P)OLITICAL FACTORS:
Government intervences : Government support the industry to expand & to
export it’s products & to grow.
Trading policies : Trading policies are also favourable for dabur company so it
can export it’s products & it also help him to expand & to grow.

(E)CONOMIC FACTORS:
Consumer focus : they are continuously focussing on analysing the consumer
needs &develop products to fulfill there needs. This is the main reason for the
growth of Dabur company.
Living standard : Rise in the living standard of people have increased their
production level, & produce high quality & variety of products.
National income : National income is important factor as if affect the growth of
the organisation. If per capita income is more the amount spend will be more & if
it will be lower the amount spent will be less.
Inflation rate : Inflation means the rise in the value of all the product in the
economy, if inflation rate is higher the cost of products will be higher & if inflation
rate is lower the cost of product will be lower. This directly affect the growth of the
organization.

(S)OCIO-CULTURAL FACTORS:
Demographics : Demographics is the study of human population in the economy.
It helps the organzation to divide the markets in different segments to target a large
of customers. For Example- according to race, age, gender, family, religion, & sex.
Distribution of income : This shows that how income is distributed in the
ecconomy. It directly affect the purchasing power of the buyers. And ultimately
leads to increase or decrease in the consumption level of the products.
Consumerism : This indicates that a large number of options are available while
purchasing of goods to consumers, so the choice becomes easy & quality products
can be choose by consumers. So while purchasing a consumer have different
choices to select product according to his needs.
Education levels : Education is one of the most important factor which influence
the buying power of consumer, while selecting a particular good a consumer
should know all it’s features so it can differentiate them with another products.
Law affect social behaviour : Different laws are made by the government to safe
guard the rights of consumers. For example- Consumer protection act, this law
indicates that a consumer can file a case against a seller if he finds that he is
cheated.
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(T)ECHNOLOGICAL FACTORS:
Discoveries & innovation : Continuous innovation in products & processes is the
basis of there services. They provide consumers with innovative products within
easy reach Build a platform to enable Dabur to become a global ayurvedic leader.
Advancement in technology : Focus on growing there core brands across
categories, reaching out to new geographies, within and outside India, and improve
operational efficiencies by leveraging technology.
Automation : Change in technology will leads to automation, this means that with
new technology labour required is less as machines are automatic. All the works
are done automatically by the machines as earlier it is labour oriented. Now all the
work is machine oriented.
Obselete rate : Day-by-day new inventions are made so the rate of obselete is
higher, as in Computer LAPTOPS have replaced the PC. This shows that the
technology becomes obselete very fast.
Research & development : This department plays a vital role in the development
of the organization. As this department always do research that what are the
demand of the markets & how to make advancements so the organization can
survive in the competitive world.

(E)NVIRONMENTAL FACTORS:
Environment regulations : The preferred company to meet the health and
personal grooming needs of there target consumers with safe, efficacious, natural
solutions by synthesizing the deep knowledge of ayurveda and herbs with modern
science.
Environmental protection : Responsible company to protect Ecological system &
use Eco-friendly products.

(L)EGAL FACTORS:
Companies law : The company fulfill all the Company law requirement so as to
grow & develop & to sustain in the compitative market.
Employment law : Employment law provides equal opportunities to every citizen
to work & earn his livelihood. It provides equal opportunities to every citizen.
Consumer protection : This law helps to protect the rights of consumers & he can
file a case against seller if he find that he is cheated.

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Dabur India's CSR Policy

Dabur India's CSR Policy is inspired by the words of its founder Dr S K Burman
who said "What is that life worth which cannot bring comfort to others". While
pursuing our business strategy of introducing products that give our consumers
health & wellness, Dabur operates in a manner that not just continues to generate
an attractive return for shareholders, but also minimizes our impact on the
environment and helps in replenishing the planet; while lending a helping hand to
the community.

Our CSR Vision

Through sustainable measures, actively contribute to the Social, Economic and
Environmental Development of the community in which we operate ensuring
participation from the community and thereby create value for the nation.

Our CSR Mission

1. Ensuring socio-economic development of the community through different

participatory and need- based initiatives in the best interest of the poor and
deprived sections of the society so as to help them to become SELF-
RELIANT and build a better tomorrow for themselves.
2. Ensuring environmental sustainability through ecological conservation and
regeneration, protection & re growth of endangered plant species, and
promoting biodiversity.

Our Activities
The CSR activities we pursue will be in line with our stated Vision and Mission,
focused not just around our plants and offices, but also in other geographies based
on the needs of the communities.

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The four focus areas where special Community Development programmes would
be run are:

1. Eradicating hunger, poverty and malnutrition:

• Provision of food, nutrition supplement, clothes etc for the poor, children
and other deprived sections of the society.
• Supporting nutrition in anganwadi centres and building capacities of
anganwadi workers to this effect.
• Provision of shelter for homeless.
• Promoting sanitation, making available safe drinking water

2. Promoting Health care including Preventive Health care through

awareness programmes, health check-ups, provision of medicine &
treatment facilities , providing pre natal & post natal healthcare facilities,
prevention of female foeticide through awareness creation, program for
preventing diseases and building immunity.

3. Ensuring environmental sustainability and ecological balance through :

• Plantation drives in schools, villages, our manufacturing units &

offices/business premises and other areas in general;
• Reviving endangered plants, promoting agro-forestry;
• Protection of flora & fauna;
• conservation of natural resources
• Maintaining quality of soil, air & water.
• Adoption of wastelands to cultivate plants;
• Promoting biodiversity;
• Animal welfare and veterinary services.
• Technical support and Knowhow for improving farming and building
capacities of small farmers.
• Promoting alternate energy resources.

4. Employment and livelihood enhancing vocational skills and

projects including tailoring, beautician, mehandi application, bee keeping,
food processing and preservation, vermi-composting and other Life Skill
Training and livelihood enhancement projects.

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In addition, the Company has identified the following areas for Community
Development interventions:

5. Promotion of education especially among children, women, elderly and the

differently abled including:

• Non-formal education programmes.

• Supporting schools with infrastructure like benches, toilets, potable
water, fans etc.
• Supporting other educational institutions.
• Improving educational facilities in general.
• Supporting children for higher education.

6. Promoting gender equality and empowering women including:

• Adult literacy for women.

• Promoting and providing credit support to women's self-help and joint
liability groups.
• Training in vocations pursued by women.
• Setting up homes for women & orphans;
• Setting up old-age homes & other facilities for senior citizens
• Setting up hostels for working and student women, day care centers for
kids of working women

7. Contribution or funds provided to technology incubators located within

academic institutions which are approved by the Central Government.

8. Rural Development Projects.

9. Other Activities:

• Promotion of Sports with special focus on training for rural sports,

nationally recognised sports, Paralympic sports, Olympic sports.
• Welfare for differently disabled persons
• Setting up public libraries
• Reducing inequalities faced by the socially and economically backward
groups
• Protection of national heritage, art, culture and handicraft; Restoration of
Buildings & sites of historical importance & works of art.
• Welfare of armed forces personnel, war widows and their dependants
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 10.Incidental Activities.

• Employing people and incurring other costs to carry out aforesaid

activities.

11.Such other activities as the Board may consider to be appropriate.

Our Approach to Implementation

We will strive to implement the aforesaid CSR activities on our own to the extent
possible. However, the principle implementer of our CSR activities would continue
to be our foundation SUNDESH, supported by Dabur Foundation and Dr. S.K.
Burman Charitable Trust. At the same time, we recognize need to work in
partnership with other players also.
This would include:

1. Collaborating with various organisation, which are registered as a Trust or a

section 8 company under the Companies Act, 2013 or Society or NGOs or
any other form of entity incorporated in India that specialise in the aforesaid
activities.

2. Contribution to various funds which are aligned with our Vision and
Mission e.g.

• Prime Minister's National Relief Fund

• Any other fund set up by the Central Government for :
o socio-economic development and relief.
o for the welfare of Scheduled Castes, the Scheduled Tribes,
other Backward classes, minorities and women.

3. Collaborating or pooling resources with other companies to undertake

aforesaid CSR activities.

CSR Funds
The corpus for the purpose of carrying on the aforesaid activities would include the
followings:

• 2% of the average Net Profit made by the Company during immediately

preceding three Financial Years.
• any income arising there from.
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 • surplus arising out of CSR activities carried out by the company and
such surplus will not be part of business profit of the company.

Monitoring
The CSR department will provide regular progress report to the CSR Committee of
the Board. This report would indicate:

1. Achievement since last progress report / during the last quarter in terms of
coverage compared to the target and reasons for variance.

2. Achievement of the year-to-date in terms of coverage compared to the

target, plans to overcome shortfalls if any and support required from the
CSR Committee/Board to overcome the shortfalls.

3. Actual year-to-date spends compared to the budget and reasons for variance.

4. In respect of activities undertaken through outside Trust/Society/NGO's etc.

there will be mechanism of monthly reporting of progress on each such
activities and the amount incurred thereon.
The Board shall seek a short progress report from the CSR Committee on a
quarterly basis.

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