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Dabur organized a capital market day on 15th September 2023 to share its strategy and fresh developments in its business segments

* Dabur, derives 75% of revenue from the domestic market and 25% from international operations. Under Mr. Mohit Malhotra's leadership since FY19, the company has taken several strategic initiatives, which have improved its performance and increased portfolio penetration to 76% in FY23 from 69% in FY19. Sales increased by a 7.8% CAGR over FY19-23 vs. 2.2% over FY15-19.

* Dabur's ability to harness Ayurveda sets it apart in the industry. The company is repositioning its core brands for India's younger generation, enhancing their relevance through modern formats, attractive packaging, and scientific claims.

* The company is focusing on expanding its presence in the existing categories and venturing into adjacent markets like therapeutics, baby care, hair oils, toothpaste, tea and foods. Dabur invests in media to bolster brand strength and boost secondary sales to achieve its target of double-digit sales growth in constant currency terms for international business and a 300bp gross margin expansion through premiumization, innovation and cost control. 

Key components of its growth strategy

* Power brand to power platform – DABUR’s Power Brand strategy focuses on nine of its major brands that accounted for over 75% of the company’s consolidated revenue in FY23. The company has evolved its Power Brand strategy into a Power Platform strategy by extending its brands into adjacent spaces, expanding the total addressable market of its portfolio, and elevating these brands to new heights. This strategy has helped Dabur expand its TAM by 3.2x in FY23 compared to FY19.

*Healthcare segment – In the healthcare business, the management aims for high single-digit growth, mainly led by the allopathic business. The company has entered two new categories, baby care and tea. The company’s therapeutics division has established connections with 72,300 doctors. It has grown its Ayurveda portfolio by addressing the gaps in the current range and focusing on premiumization. It targets to reach the revenue mark of ~INR50b in the next 4-5 years.

* Home & Personal care - The HPC segment contributes to 50% of Dabur's overall business. Growth is driven by a focus on premiumization in urban markets. Dabur aims to achieve a market share of 15-25% in the premium segment. With a strong presence in modern trade channels, its products are available in 7 out of 10 outlets. Dabur boasts over INR10b in revenue in Dabur Red and Amla each, along with other INR5b brands like Odonil and Vatika. Additionally, there are 14 brands that generate revenue under INR1b in this segment. The management targets to become INR70b brand and increase its CAGR to 7-9% from 5% currently

* Food and Beverage (F&B) segment accounts for 21% of the domestic business and has achieved a 14% CAGR over the last four years. Within this segment, Beverages have grown at a four year CAGR of 14%, while Foods have seen a 16% CAGR. The TAM has seen impressive growth of 7.3x over the past four years. NPD’s contribution reached to 8.7% in FY23. Its Badshah brand focuses on core markets, which contribute to over 90% of current sales, and will be expanded to other markets in a phased manner. The company has set an ambitious goal of doubling its F&B business in the next five years.

* International Business – Dabur's International Business accounts for 25% of its total operations. About 90% of the portfolio consists of personal care products. It employs two main distribution models: National Distributor Model and Direct Mode. Badshah already has a presence in international markets, and the company plans to further expand into new regions. The management aims to achieve double-digit CC growth in the future.

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