This is indeed sad and shocking! Specially I had trust in Dabur’s purity - a 100 year young ayurveda company. Disappointed to say the least. On reading articles that you shared, it looks that some traders/middlemen do this adulteration and not directly done by these companies but still they would know about it? Also, this seems something like how milk in India is also sourced via multiple farms with no means to check quality at each and same milk is sold by some well known brands. Its sad indeed.
Now as shareholder of both Marico and Dabur, its good to see Marico pass all tests but Dabur has really lost the place it had been growing in my mind since last few months. I have been a long term investor in both. Seeing this I am really evaluating what should I do about my Dabur shares. Its not a knee jerk reaction but this is the least I would expect from a 100 year Ayurveda company and market leader and someone vouching for purity always to give me pure honey as a consumer and also ensure ethics as investor.
I would wait to see how they respond to this news. Thoughts from others welcome.
Well aware it will not affect the company stock price and could be a non event, but as per the investing criteria I follow, it is a solid event for me, specially as consumer as we give same honey to our kids. We cannot brush aside it as consumer and I cannot as a long term investor, share price is affected or not is immaterial to me. If this article is true then the image of Dabur changes for me and hence my investing rationale. I may or may not sell now or in near future but it is a solid event to trigger a new thought process for me. Dabur is approx 5% of my portfolio and I was gradually increasing allocation. If above adulteration news is true, I might not sell but would never dare to have a large allocation to such company.
Disc. This is just my assessment and I maybe wrong. Not a recommendation to buy/sell
Saffola, MarkfedSohna and Nature’s Nectar were the brands that passed all tests.
That should mean, Marico enjoys lower margin on such product than others!
…it’s hard to design safety tests that can constantly evolve and adapt to identify new adulterants. Rumour has it that companies in China are already producing sugar syrups that can beat NMR. So it’s unlikely to be a fruitful endeavour over time. However, they do believe that the regulator can play an active role in monitoring the supply chain — Keep track of the middlemen, the importers, the beekeepers, the producers, the whole lot and hopefully, this should help us identify some bad apples.
The quarter was characterized by a faster than expected recovery in consumer sentiment in India,
aided by the festival season and a declining COVID-19 graph. The Company witnessed strong
performance across its portfolio with General Trade continuing to grow healthily and rural markets
staying ahead of urban. In the new age channels, while E-Commerce continued the stellar run, Modern
Trade after a soft first half, fared better in Q3. CSD continued to decline, albeit improving sequentially.
India business delivered a strong performance with double-digit volume growth. Revenue growth was
in tandem with volume growth. Parachute Coconut Oil delivered ahead of its medium-term
aspiration. Saffola Edible Oils continued its growth momentum, delivering double-digit volume
growth. Value Added Hair Oils also exhibited strength with a broad based sharp recovery across sub
segments leading to overall double-digit growth for the category. The Foods portfolio continued to
witness exponential growth in line with the near-term aspiration, backed by strong performance in
both the base foods and the new product launches.
There was a steady revival in discretionary
categories with the Premium Personal Care portfolios witnessing improving trends sequentially,
however, still posting a modest decline on a year-on-year basis.
The International business had a resilient quarter with high-single digit constant currency growth, led
by double-digit constant currency growth in Bangladesh and recovery in few other markets.
The quarter was also characterized by inflationary pressure in key raw materials necessitating cutting
back of some promotions and taking effective price increases across both Parachute and Saffola edible
oil portfolios.
The Company expects to deliver a healthy profit growth on the back of various cost
optimization initiatives and judicious A&P spends.
The Company maintains an optimistic outlook for the rest of the year provided the COVID and the
economic situation continues to improve. The Company remains steadfast in its medium-term
aspiration of delivering sustainable and profitable volume led growth, building on strong brand equity
across core franchisees and progressively driving and scaling up new engines of growth.
One observation, I don’t see that much of “Saffola Oil” in Jiomart and Dmart ready. May be it is an area thing, do you guys see the availability in your area?
I mean the oils are there but I see more options with other oils like gemini and fortune etc but availability for every variety of Saffola is not there on any platform. Even amazon pantry shows the same.
strong performance in Q4, positive commentary overall. Now this a business which is kind of boring and not exciting as other IN themes, and continues to deliver double digit growth - volume/value/profit with healthy cash flows and good dividends.
Indeed, but market doesn’t seem to like the mention of significant drop in margins due to transitionary very high input costs…somehow market always tend to find negatives in good, boring businesses and positives in ordinary, exciting businesses
Marico has consistently used this strategy of absorbing high raw material costs. This helps them gain market share from unorganized players especially in Saffola and Parachute oil category.
Completely agree. They have been doing this for many years.
They capture market share and grow volumes during times of RM inflation. And when the RM prices correct, which I hope should happen by Q1 or Q2 FY 22, the bottomline just explodes !!!
Delayed recognition of this business aspect is a good opportunity for existing / prospective shareholders to add to their positions.
In the FMCG segment looking at the stock price movement of Marico, Dabur, HUL pre and post corona -2020 throws up interesting movements. Dabur, HUL seems to be unfazed by it, Marico had a deeper fall. My questions are: 1.Any reasons why Marico & Dabur have such a huge difference, did dabur chawayanprash save the day? 2. Also this seems to be contrary to the strong moat that we associate with Marico with its focus on Parachute & Saffola brands. I would have expected Marico to be quite defensive. Any thoughts?
It has more to do with portfolio of these companies.
Dabur: Ayurved portfolio.
HUL: Hygiene and wash portfolio.
Expectations these portfolio sales growth will counter-balance slowdown else where.
Marico portfolio was mostly edible oil and hair-care. Expectation: Oil may remain stable and hair-care shrink as people are not going out.
Hello, one more observation I would like to mention here about the product and I have already written about this to Marico.
The official website only features Saffola “Total” oil, their online order page too, shows only this variant but on Amazon, Flipkart, Jiomart, and Dmart ready one can see Saffola “Active”, Saffola “Gold” and Saffola “tasty” three other variants of cooking oil that have absolutely NO mention anywhere in the official website. I wonder if these are fake products or something…
