Author – Daksha Bharadwaj
Introduction – Established in 1884, Dabur India Limited is one of the world’s largest Ayurvedic and natural healthcare companies and India’s fourth-largest FMCG firm. Founded by Dr. S.K. Burman in Kolkata (originally as a small pharmacy), the company now operates globally, selling over 250 products across 120+ countries.
Objective – To calculate beta & observe its significance
Literature Review –
Dabur India Ltd – The world leader in Ayurvedic Products – Sustaining Competitive advantage – Thomas Mathew (2016)
Dabur is one of the oldest listed companies currently in the fourth position among the FMCG companies in India and has a varied portfolio of more than 260 herbal ayurvedic products. Dabur by virtue of being the world’s largest herbal ayurvedic portfolio has dominated this market. During financial year ended March 2015 Dabur has recorded revenues of Ra.7806 cr, an increase of 10.3 percent over FY2014. Its net profit in FY2015 was Rs.1066 cr, an increase of 16.6 percent over FY2014. It is of strategic importance for Dabur to maintain the high growth in order to capture higher market share. This can be achieved by specific strategic actions to be sequenced by Dabur in order to achieve their goals. Dabur is leveraging its dominant market position to bring out new products. Therefore, Dabur has initiated the focus on empowering and detailing their marketing front end team to increase their reach to the doctors. To do so, it has strengthened its team by providing innovative technologies like hand held devices to communicate seamlessly to expand their health portfolios.
Performance evaluation of Dabur India Ltd through Profitability Ratio Analysis – Bharathi and Suresh Ramana Mayya (2022)
For the quarter ended September 30, 2021, the company reported a 12 percent increase in consolidated revenue, with a rise of 10% in the Fast-Moving Consumer Goods sector at the industry level. In the second quarter of 2021-22, Dabur India Ltd fetched a revenue of Rs 2,818 crore, which increased from Rs 2,516 crore the previous quarter. From Ayurvedic medicines to hair care, oral care, home care, and food and beverages, the company’s revenues and market share improved across the board. The operational margin rose by 9% during the quarter, while the consolidated net profit increased by 4.7 percent to Rs 504 crores from Rs 482 crores the year before. The efforts paid off handsomely, with the demand exceeding from rural people compared to urban people in the third quarter and e-commerce contributing 7% to domestic sales. In order to grow its rural footprint, the corporation is spending ahead of the curve. The business has already covered about 83,500 communities, exceeding its rural coverage objective of 80,000 villages 18 months ahead of schedule.
Data Collection – Data for NIFTY 50 & Dabur India was demonstrated from NSEindia.com for the period 1-12-2024 to 30-11-25. Then Friday closing price was calculated. Then weekly returns of NIFTY & Dabur India were calculated.
Weekly return of NIFTY was taken as X
Weekly return of Dabur India was taken as Y
Y was regressed on X
Data Analysis–
Equation – Dabur India = -0.00953 – (-0.30516) Nifty50
The above equation shows the relationship between the Nifty 50 (X) and Dabus India share price (Y). The negative sign means inverse relationship which means if one’s share price rises other’s share price will fall and vice versa. If share price of NIFTY 50 rises by 1 unit, then share price of Dabur India will fall by 0.30516 unit. The p value for share price NIFTY 50 is 0.215983 and more than 0.01 which means that there is no statistically reliable relationship between the weekly returns of NIFTY 50 (X) and Dabur India (Y) for the period analysed. Number of observations are 48, R2 is 0.03308, which means 3.308% of the variances of share price of Dabur are explained by share price of NIFTY 50. 96.692% is the error which is due to the variables which are not in the models. F is 1.57387 which close to 1 usually suggests the model is barely better than a random guess, with p value to be 0.215983 indicate that this is not significant at 1% level.
Conclusion – Dabur India beta is -0.30516. As beta is negative we should avoid this company for investement.
References –
Dad, A. M. (2012). Interactive communication channels and their appropriateness for the FMCG business. International Journal of Business and Social Science, 3(17), 242-258.
Misra, R., Singh, S., & Mahajan, R. (2022). An Analysis on Consumer Preference of Ayurvedic Products in Indian Market. In Research Anthology on Recent Advancements in Ethnopharmacology and Nutraceuticals, 11(4), 925-941.