Dabur: “Chawyanprash” with characteristic of “Real” “honey”, improving quality with age


Dabur (derived from “Da”ktar “Bur”man) is an Indian consumer goods company founded in 1884 by S. K. Burman. In 1936, Dabur business got formalised in corporate structure with Dabur India Private Limited which was converted into a public limited company in 1986. The company came out of with IPO in 1994. It manufactures Ayurvedic medicine and natural consumer products. It is one of the largest fast-moving consumer goods companies in India.

Despite promoted and controlled by family, the company has successfully handed over management of business to professionals in 1998 with family members limited there role to non-executive directors. The company has successfully blended organic brands (classic brands like Hajmola, Lal Dantmanjan. Pudin Hara, Chawyanprash, Real Juice, Vatika) as well as inorganic growth strategy (acquisition of Odomoss, Promise, Fem etc).

Past performance

Since listing in 1994, Dabur has performed reasonably for it’s investor provided XIRR of 26.1% (including dividend reinvestment) over a period of 26 years. The value of Rs 9500 invested for 100 share in IPO in 1994, would be valued at Rs 27 Lakh as on March 2020 + Dividend assumed to be reinvested. My calculation of return as well as other financial highlight of the company is enclosed in excel sheet. Key table is as under:

Over last 25 years, the company sales and net profit grew at CAGR of 12% p.a. and 17% p.a. respectively. This has been done reasonably well ROE of 32% over period and healthy dividend payout for shareholder of 38% (average dividend payout). In 1999, when professionals were given operational control, the company was trading at around 65 times PE ratio. If an investor has entered at such high valuation, still one would have generated 17.5% XIRR over period of 21 years. This would be quite commendable performance of the company over any parameters in opinion.


130+ year business showing 30+ business attitude

Ayurveda and Herbal can be defined as Core to Dabur business. The company attempt to use century old tradition of Ayurveda and applied successfully to modern science test. The company has filed 43 patent till March 2020 (of which 1 Patent application filed in FY20) and have 8 patent granted till March 2020. The company has 98 employees in Research and Development.

Since many of the products of the company are coming from Ayurveda, with age, brand develop more and more strength as against recent research brands. Chywanprash, Hajmola and Pudinhara can continue to grow and strengthen their brand equity with ages. This I consider unique advantage of company. Dabur is the world’s largest Ayurvedic and Natural Health Care Company with a portfolio of over 250 Herbal/Ayurvedic products.

In order to get authentic ingredients and herbs, the company has engage with farmer to grow rare medicinal herbs in over 4,800 acres of land spread across the country with over 6,900 farmers benefiting from the exercise. Similarly, it has been using Nepal and Indian farmers support to source authentic Honey supply which provide unique sustainable supply of Honey to the company.

The company see Ayurveda as a core of business. This has assisted company not only in Indian market but also expand its global footprint. Ayurveda/ (Natural) products are getting increasing acceptance among customers. Dabur mission statement articulate this ethos very well ” Contemporise Ayurveda and make it relevant for the new generation”

The company annual report in 2018 highlight finding from a survey carried out by Euromonitor International reveals that over half of Indian consumers reported that ‘natural or organic’ features are known to influence their hair and skin care purchase decisions. About 71% of consumers surveyed said that they would pick up a face cream or lotion provided it claimed to be ‘natural’, while 38% said they would buy a shampoo or hair oil, if it was made with ‘botanical’ ingredients.

In my opinion, this trend to Ayurveda/Natural products would increasingly find acceptance of customer. This is also illustrated when Colgate launched Vedika toothpaste and Hindustan Unilever launched “Ayush” range of products. The 130 years of goodwill of Dabur would provide definitely key advantage to the company. The company is also using various studies conducted by its research team in marketing its products. For instance, Dabur Chyawanprash , which was otherwise, seasonal product with higher demand in winter is now launched with chocolate flavor for kid and now positioned as immunity booster. Similarly, Dabur honey is now market as product which can assist consumer in controlling its weight.

During 2015-16 Dabur entered into a license agreement with the Government of India to commercially produce two new Ayurvedic drugs – Ayush-64 for treatment of Malaria and Ayush-82 for management of Diabetes. A clinical study conducted with Madhumeha (Non-Insulin Dependent Diabetes Mellitus, NIDDM), demonstrated that Dabur Madhurakshak Activ (AYUSH 82 powder) reduced fasting and postprandial blood sugar levels, along with clinical improvement in diabetic subjects after 24 weeks of treatment.

This blending scientific attitude to Ayurveda can augur well for future growth of Dabur India.

“Indian” King of distribution

While I have been holding small tracking position in Dabur for 5 years, my interest in the company developed after I came across CLSA note on ITC which provided some key input about distribution strength of FMCG companies in India. Since ITC was my top holding, I carefully read the report and observed an unique chart which attracted me to write this post.

While the company is 7th largest listed company by revenue from FMCG products, it is second still largest in distribution reach in India among listed players and largest in Indian Owned enterprise.

In order to get more understanding, I tried understand how company has scaled up its distribution over period and what has been impact on net profit margin? Find enclosed my compilation from various annual reports of the company:

This was my effort to understand how increased distribution along with proper blend of old and new brands can do wonders to profitability of company (driven by operating leverage).

High penetration in Rural India

The company has pushed special efforts to increase its reach in rural area. As per internal study, nearly 10% incremental sales in the key brands was driven by high penetration in rural market. Find enclosed map providing special efforts to cater to “Rural India” directly. As against total village of 650,000 in India, Dabur has direct reach 52,298 villages as on March 31 2020. This has been achieved special emphasis and hard word of the company over the years.


Power Brands Focus

With just 3 brands over sales of Rs 100 Cr in FY1998, the company has now increased to 18 brands with sales over Rs 100 Cr in FY2020 (significant impact is also due to inflation over period). The company now intend to focus on key brands, which is call “Power Brands” and plan to increase marketing spending on such brands. Dabur has identified 9 Power Brands – Dabur Chyawanprash, Dabur Honey, Dabur Lal Tail, Dabur Honitus, Dabur Pudin Hara, Dabur Red Paste, Dabur Amla Hair Oil, Vatika and Réal fruit juice – that account for more than 70% of its total Sales. It is important to note that all power brands are developed by Dabur management in-house and are related to Ayurveda/Natural products, which has been core to Dabur business proposition.

Good capital allocation: Using Capital to acquisition of brands

The company in past has worked on inorganic route to pursue extra growth. Most of the times, the company management ensured that acquisition is at reasonable terms and company post acquisition have managed to turn around well. For instance, the company acquired Balasara group of companies along with brands Odonil, Odomos and Promise and manufacturing facilities in FY2005. Dabur bought the entire promoters’ stake of three Balsara companies through an all-cash deal of Rs.140 crore. This acquisition is expected to add approximately Rs.200 crore to Dabur’s revenues. However, the brands were not making major profit at the time of acquisition.

In FY2006, total operational and business integration of the two companies was achieved; and on the financial front, the erstwhile loss-making Balsara entity has generated profits of Rs 14.9 crore.

This was followed with successful acquisition of Fem Care Pharma Limited, a leading woman skin care products company which was acquired for total cash consideration of Rs 203.7 Crore.

Similarly, in international market, in FY2011, Dabur completed two overseas acquisitions within a span of just four months. In October 2010, Dabur completed the acquisition of Turkey-based Hobi Group (Revenue US$ 30 million and consideration US$ 69 million), This was followed in quick succession by the acquisition of Namasté Laboratories LLC (Revenue US$ 94.7 million and acquisition cost US$ 100 million), giving Dabur an entry into global African hair care market. These acquisition has assisted company to increase its footprint in global market. In FY2020, International business contributes 28% of consolidated sales as against 17.6% FY2010.

The company has also divested from capital requiring business, Dabur Pharma in FY2003. The shareholder of Dabur India was given 1 share of Dabur Pharma for each 2 shares held in Dabur India. Dabur pharma was leading oncology players. However, demerger of pharmaceutical businesses, assisted management to focus on core FMCG business and grow over time.


Threat from Competition:

While the company is largest and among oldest player in Industry, recent competition from new players (Patanjali) and increased focused of competitor (from Colgate to Hindustan unilever to Marico) to adjust to new market normal can adversely affect Dabur prospects.

Patanjali entry in Indian market has shown true potential for Ayurved products in India. While I cou;ld not get details about Ayurved based product sales, enclosed link provide good insight about market size and growth potential for relevant segment. As against Rs 6300 Cr consolidated domestic sales by Dabur over 130 years long joinery, Patanjali achieved total revenue of Rs 10,000 Cr in FY2017 only. Although due to logistic and lack of professional management, Patanjali has faced problems which adversely affected its performance, one must credit Patanjali Management to reach second largest FMCG company in India within a decade of its operation.

Baba Ramdev's Patanjali is in a free-fall & it can't be blamed on the slowdown alone

Top Credit Rating Agency, Credit Monitoring Services in India, Credit Quality Rating – Care Rating

Similarly, increasing competition intensity from other established players like Hindustan Lever, Wipro, Marico and Colgate may adversely affect performance of Dabur.

Managing supply of key ingredients

As already said, Ayurved products soul of Dabur business model as described by management, sourcing authentic products and herbs may pause major challenge to the company. FY2018 report provide more insight about company preparedness to address this risk. It state that the company use 249 medicinal and aromatic plants (MAPs) for its various Ayurvedic and natural preparations. Of these, Dabur has identified 100 MAPs as being critical to its operations in terms of their availability, value and volume. Through its biodiversity initiatives, Dabur has put in place direct interventions for either cultivating or sustainably collecting 58 of these 100 critical MAPs. In 17 species of MAPs, Dabur is 100% self-sufficient in a way that the entire requirement of these 17 herbs are managed through its biodiversity program and interventions.

While the company is addressing the issue of sustainable supply, getting sustainable supply of these ingredient appears to be key challenge in my opinion.


At current valuation of Rs 500+, the stock is trading at 61 times PE ratio. This provide very limited margin of safety to investor in my opinion.

Disclosure: I have tracking position ( less than 0.1% of my equity portfolio) in the company since last 5 years. My view may be biased due to my holding. I am not SEBI Registered investment advisor. I am also not recommending any investment action in this company. The reader shall do his/her own due diligence before making any investment decision.
Dabur Past Return.xlsx (824.5 KB)


Amazingly insightful and very well articulated.

Interesting to know how well Dabur has compounded returns for shareholders and have allocated capital well, even when promoters delegated management control to professionals.

" In 1999, when professionals were given operational control, the company was trading at around 65 times PE ratio. If an investor has entered at such high valuation, still one would have generated 17.5% XIRR over period of 21 years."

It definitely looks like ayurvedic products which are reinforced by scientific research, can potentially elongate the product demand cycle, especially in the post Covid era, where the thrust is on natural and immune products.

It will be interesting to know under what circumstances can PE of Dabur potentially compress and what is the likely probability? Really appreciate your inputs

@dd1474 Many thanks for starting this thread.

Following are my pointers.

Strong brand strength of Dabur

In my opinion Dabur brand is the most powerful homegrown FMCG brand and maybe only Nestle brand inspires more awe than Dabur. I am saying this in regards to the number of highly regarded distinct products under its belt, so have not included Lifebuoy or Dettol. This is my personal opinion based on what I perceive qualitatively. Godrej brand is also highly regarded but it is more diversified in Security Locks, RE, Consumer Durables and IMHO in FMCG Godrej’s brand strength is not as rich as Dabur.

Perhaps, Dabur has started to realize this only recently and so have been pushing its all new products under the mother brand or sub-brands only. Based on eCom reviews and local scuttlebutt I was confident that Dabur Sanitize products have gathered enviable strong reputation among the now-crowded hygiene space. They were among the first to fast-track sanitizers aggressively through its well entrenched distribution network when the there was massive shortage of branded sanitizers after COVID fallout.

Also, Dabur was not able to extend the Fem brand well and so now pushing the personal care products through Dabur Gulabari brand. They have kept their hand wash in Fem and was not faring well against competitors. Maybe they will release it under Dabur Sanitize brand too given that they have already launched soap under that brand.

Dabur also had cleaner products under Dazzl brand for a long time but its only after they launched it under Dabur Sanitize brand that it has started to sell substantially. E.g. Dazzl Disinfectant Floor Cleaner (Amazon Rank #16,756 in Health & Personal Care), Dabur Sanitize Disinfectant Floor Cleaner (Amazon Rank #2,708 in Health & Personal Care). So, Dabur clearly have been running enough pilots to understand that they can only gain scale faster with Dabur sub-brands.

Real, Odonil and Odomos have good enough brand strength. Especially, Real has strong market leadership in Fruit Juices segment and it is now ventured into dairy beverage segment too. Beverage market is growing strongly and Real in particular is growing at ~ 20% CAGR. Another potential food focused brand is Dabur Hommade which can grow big if taken good care of.

Aggressive Current Management

Also the current Chairman (Amit Burman) and CEO (Mohit Malhotra) combo has been taking some aggressive steps in reviving growth since mid 2019 (HDFC Sec Dabur Update - 11 SEP 2019.pdf) and the results are getting more visible day by day. Amit Burman in particular is an entrepreneur in itself and has single-handedly built the Real Brand (which was earlier a subsidiary and now have merged with the company. He have founded Lite Bite Foods which is an equally successful venture. One can read about Amit Burman’s journey and some interesting things about the family & the company from The Inheritors book.

Missed Ayurveda wave (almost)

This is very correct. One company you haven’t mentioned is the The Himalaya Drug Company. I again don’t have the data but from the availability and the feedback of their rapidly growing portfolio it seems to me that they are growing the fastest with strong reputation. Before the Ayurveda wave Himalaya was a small brand with very limited visibility.

Regardless, Dabur has fared poorly in comparison to many. Only in Dabur Lal toothpaste it gained strong ground and in its other existing ayurveda portfolio it was able to defend its position but there was not much brand extensions like was seen in Himalaya. However, its refreshing to see a number of Ayurveda related releases after the current management took the helm and also during COVID.


Dabur’s promoter Burman Family is a conservative one and it is quite possible that going forward we may see many of their startup ventures and major financial investments getting merged with Dabur.
For example:

  • Amit Burman may consider merger of Lite Bite Foods if he deems it fit in future. It can be to Dabur what Starbucks JV is to Tata Consumer.
  • Dabur group has taken a significant stake in Eveready, which is at present a financial investment by Burman Family in its personal capacity. Maybe in future after turning around the company well it can merge it with Dabur. According to VC Mohit Burman " both are FMCG businesses, and if we were to get involved we believe that we could add a lot of value to Eveready." Eveready can be to Dabur what PureIt is to HUL.

There can be many such optionalities which I am not aware of.

Disc: One of my oldest core stock.


Curious what makes you think that such mergers may happen in future. Is there anything in past which happened similarly that makes you infer this or is it just a thought process? As a shareholder, I would be wary of any such mergers as I do track Dabur but not other non listed investments of Burman family and also if I want to track, I will find limited financial information on their metrics in public domain…Thanks

Mostly a thought process & so a far fetched optionality at best.

Real Juice actually started as an independent venture by Amit Burman with his own money. He only used Dabur’s distribution initially, but after proof of concept it got equity funding from Dabur as growth capital. Gradually with continued funding it became a subsidiary (as Dabur’s food division) and then merged with Dabur when Real started to contribute significantly to the bottom-line of Dabur.

I believe we need not to give much thinking to them now. Most companies manage new ventures like a startup, e.g. but they allocate some company-funds those projects. But in this case the non-listed investments (Eveready is listed though) are done with their personal money.

Also Dabur is the bread and butter of the promoters. No Dabur promoters draw any remuneration! (Source) They are solely dependent on dividends for their living and they are highly conservative! So, I believe, they will only take a step, if ever, when those investments become sustainably profitable and large enough to contribute meaningfully to the bottonline and fits strategically with Dabur.


Dabur India Q2FY21 conference call key takeaways


  1. Demand progression: in October has been good, E-Com sale events have been beneficiary Festive season to begin from mid-November (Diwali).
  2. urban growth: at 18% currently
  3. Channel growth: (i) E-Commerce (6% of sales v/s 2% YoY): +200%, (ii) Modern Trade: 1.6% (lower growth due to Future group related issues), (iii) CSD: (-) 25-30%, (iv) Cash & Carry: +10%
  4. Primary v/s secondary sales: growth at equal levels.
    Inventory levels of 24 days during early Covid period has been corrected to 15 days now. Company has adopted Continuous Replenishment System (CRS) which will reduced inventory days to 12.5
    5)RM, GPM: 50% dependence on Agri products which has seen significant inflation and company will take judicious prices increases in H2FY21 to mitigate the impact. Q2FY21 saw 100bps increase in GPM due to higher share of Chyawanprash sales and lower sales of Beverages.
  5. Ad-Spends: company will gradually increase going forward, aiming to be at 12% (by re-investing cost saving) of sales (in couple of years) from 8% (Q2FY21) currently. needed to create demand for each and every product and category that company is into currently
  6. EBITDA Margins: H2FY21 margins to be same YoY i.e. at 20%. (H1FY21: 21.9%), lower margins on account of higher Ad-spends, RM inflation and product mix (higher revenues from juices). from a medium-term perspective, company aims to maintain margins at current levels to ramp up ad-spends and drive higher revenue growth.

HealthCare (39.6% of domestic sales)

  1. Health Supplements: Chyawanprash grew 2x on low base. Q3FY21 has a high base but company is still witnessing YoY growth. Penetration levels currently at 3.5-4% (+100bps in H1FY21). Entry of more players (Marico most recently), will increase penetration and could be a good tailwind for the market leader i.e Dabur with ~60% market share.
  2. Capacity: company witnessed high demand for Chyawanprash, currently higher than company’s capacity. They are increasing capacity in Madhya Pradesh which will start production within next 3 months.
  3. Digestives: Hajmola performance was impacted due to low out of home consumption
  4. New Launches: (i) Dabur Honey immunity range, (ii) Dabur Amla Health juices range, (iii) Dabur Vedic Suraksha tea, (iv) Dabur single herbs range (v) Dabur Ayurvedic Nasal drops (vi) Dabur Himalayan Apple Cider Vinegar.

Home & Personal Care (47.6% of domestic sales)

  1. Oral Care: overall category grew by 5% with Natural toothpaste growing at 8%, as per Nielsen. Dabur Dandt Rakshak and clove recorded sales of Rs. 70mn and Rs. 20mn respectively. Company is continually gaining share in the category.
  2. Hair Care: company gained 10bps market share in Coconut hair oil while they lost 10bps share in perfumed hair oil category.
  3. Dabur Sanitize: Sanitizer sales and margins are declining with company registering Rs. 800mn in Q1FY21 and only Rs. 120mn in Q2FY21. This is on account of higher competition (MNC & Local players) and reduced usage by consumers sequentially.

Foods (12.7% of domestic sales)

  1. Beverages: grew by 6% if HORECA & CSD is excluded. Shift from carbonated drinks to juices is visible. Company gained 170bps market share in the category. Launched Real low calories juice this quarter. There is clear sequential improvement and company is confident of further recovery going forward.

International Business (27.6% of overall sales)

  1. Middle East (highest contributor): company expects H2FY21 to be better than H1FY21 as economic activity normalizes. It de-grew by 15% this quarter.
  2. Other geographies, growth: (i) Egypt: (-)3.3% (ii) Hobi: 31.3%, (iii) US Business: 14.6%, (iv) Nepal: 29.3%, (v) Bangladesh: 31.8%. Company is confident that these geographies will continue to deliver going forward.

Outlook: company has delivered the highest ever domestic volume growth of 16.8% this quarter. We like company’s focus and aggression in NPD’s coupled with using it as extensions to strengthen and leverage their core brands to grow it further. Management’s aim to increase ad spends to augment revenue growth in the medium term is encouraged as they are quite clear that this will not be at sacrifice of margin and profitability. We remain positive on structural developments taking place in the company.


Thanks for your message. I consider PE ratio and its compression broadly with product penetration in market. In case product penetration is higher (like in case of Colgate with Toothpaste being major product and have penetration of 90% (sourced from enclosed link • India - penetration rate of the FMCG industry by type 2016 | Statista
image, the PE ratio shall revert to market PE ratio sooner as pathway is limited and growth would be broadly from premiumisation.

However, in case like Chywanprash (as shown in graph for 2016) where penetration is only 1% and also scope for enhance market to global market (with increasing preference in consumption habit to increase natural products), the PE may continue to remain at same level for next decade or so.

I do not have any objective research to support my argument and the above point is probably too much simply PE compression/maintenance. So only time would tell what would be right PE.

Thanks for bringing out information on Himalaya. I missed that company. Another company one could look at is Emami, which acquire Zandu brand and now moving aggressively in Ayurved category.

Thanks for your valuable insights.


This is HUGE!!

"What is even more worrying is that “Indian standards for honey purity cannot detect the adulteration because Chinese companies have designed sugar syrups to bypass these standards,” Centre for Science and Environment (CSE) India said.

  • Honey samples from leading brands such as Dabur, Patanjali, Baidyanath, Zandu, Hitkari and Apis Himalaya, all failed the NMR test.
  • Only 3 out of the 13 brands – Saffola, Markfed Sohna and Nature’s Nectar (one out of two samples) – passed all the tests.

Press Conference:



To stand out in the crowd, Dabur is highlighting the health aspect of ghee. Apart from the regular quality parameters, like taste, texture, source and aroma, the pack puts forth ghee’s nutrition and health benefits – like, boosting immunity, digestion and antioxidant properties. The tagline reads, ‘Nutrition in every spoon.’ Dabur has also prominently highlighted its ‘100% pure’ assurance on the pack.
K Ganapathy Subramaniam, DGM marketing (innovations), Dabur India, tells afaqs! that due to the health aspect, the move into the ghee segment was a seamless transition for the brand. “We have brought alive the health credentials prominently. I’m not sure if there are any other players out there that have done that.”



Dabur announced a fresh investment of Rs 550 crore for a new manufacturing facility in Madhya Pradesh, which it said would be one of its largest plants in the world. The firm has already secured a 51 acre land parcel and begun construction work for the initial phase, which is scheduled to be completed within the current financial year.

I wonder if niche companies will start to wean away consumers. Although I am invested in Dabur, I am not entirely convinced that large organisations really have the same quality as some of the other niche product companies that are available nowadays. Although price does matter, you after all do not get a Merc for the price of a Maruti.
Already in the consumer skincare products, there are a lot of disruptors. Same for consumables as well.

These niche product companies are good overall as they expand market with their disruptions and innovations and provide a solid direction for traditional firms to either acquire them or innovate in that direction, other than some of their own direct innovations… You need to monitor if traditional firms are in denial or acceptance. As long as they learn and grow in right direction, they have enough moats to continue their leadership. Also beauty of FMCG industry is that the incumbents get enough time for course correction unlike various other industries where you can get wiped out. In FMCG companies can survive and bounce back strongly with traditional moats as well and end up regaining lost leadership…


Dabur Baby Super Pants’ Diapers will be launched on e-commerce platform Flipkart during its Big Sale Day sale, according to a joint statement.

1 Like

I happened to cross a beauty and cosmetics store just adjacent to the mighty Nykaa in a mall…the store looked vibrant although not as catchy and global as the Nykaa…it was named NewU …I stopped and read closely to find it followed by…a dabur enterprise?? It triggered old memories when I remembered that Dabur did foray into cosmetics retail long back…even before Nykaa!!!

Did a digging of old articles, news, strategy of Dabur etc. As cosmetics retail is a great business today… And found out that they begun around 2009, launched online in 2012, have an omnichannel strategy, maybe around 100 Stores, open to investors and had intention to spin off this business from Dabur eventually…

All this made me realise few things…many times intention of company is bang on but execution and competency becomes a roadblock. Nykaa started much late and is today almost as big as Dabur, the parent of New U…New U has no significant visibility as on today… clearly the focus & execution was way behind the new emerging leaders here although the intention was right and so was the timing!!!

It is indeed very difficult to incubate businesses of different competency…hats off to RIL for that!!!

Some good reads below…mostly could find them active till 2017 and then one latest news on their digital marketing…not much I could find 2017 onwards…

Would be great to know more insights into this retail venture of Dabur and if anyone aware how it fared during Pandemic, any change in strategy and what’s latest vision for it?


Disc. Invested, biased. Not a buy/sell recommendation. Post for academic purposes only


Rest 49% will be acquired within 5 years.

1 Like

Dabur will invest Rs 325.87 crore in its Indore plant to make red toothpaste and one-litre juice packs, and increase the production capacity of portion packs of its range of juices.

Some more latest traction on NewU. Crossed 100 stores and now aim is to double store count in 2 years. Meaning what they did from 2009 - 2022 (17 Years), they want to do same in next 2 years out of NewU.

Not sure, if this means something meaningful in larger scheme of things for Dabur.

Disc: Invested, biased. Not a buy/sell recommendation.