Domestic FMCG maker Dabur India, armed with cash reserves of Rs 7,000 crore, is looking for acquisition opportunities in the healthcare and home and personal care sectors, according to its CEO Mohit Malhotra.
Additionally, Dabur is looking for acquisition opportunities in the online space, and has several D2C (direct to consumer) brands in the works, it now finds valuations “more reasonable” and if it gets valuations suitable for growth So he will take it forward. Said.
The company is expanding its presence in the online sector, including e-commerce channels and D2C business, where it plans to introduce more innovations under existing brands and through inorganic opportunities.
“We are bringing innovations there. These innovations are coming on the basis of existing brands and these innovations are coming on the basis of some new brands that we may launch or we may come up with a new brand,” Malhotra told PTI. “Considering an acquisition.”
The company will drive organic growth with new brand launches in skin care and premium skin care and the rest will be through acquisitions.
“We don’t want to launch any organic new brands except in skincare and premium skincare where we are not present in. That’s where we can make an exception otherwise we look at it to look at acquisitions,” he said.
If Dabur gets a “reasonable valuation”, it could consider an acquisition for which “we have about Rs 7,000 crore lying in our balance sheet for that particular purpose,” he said.
Malhotra also emphasized that apart from acquisition, innovation is also very important, which not only attracts young or new age consumers but also extends the lifecycle of a brand.
“It is a necessity,” he said, “If a brand has to evolve or grow, it has to have a new avatar every two to three years, only then will the brand move forward.” All nine power brands of Dabur India “have to evolve and go through a cycle of evolution. That’s what we are doing.” Dabur has nine power brands, eight in India and one in overseas markets, which account for 70 per cent of its total sales.
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The brands are – Dabur Chyawanprash, Dabur Honey, Dabur Honeytuss, Dabur Pudinhara, Dabur Lal Tail, Dabur Amla, Dabur Red Paste, Real and Vatika.
The revenue of its juice brand Real is around Rs 1,700 crore and the company wants to take it to Rs 2,000-2,500 crore in the next five years.
“The brand should trend around 15 per cent CAGR, which we have, so we should be able to double the business in six years with this brand,” he said.
Besides, it has three brands worth Rs 1,000 crore, Dabur Amla, Dabur Red and Vatika, which Malhotra expects to grow to Rs 1,500 crore.
Addressing an investor meet last week, Malhotra said Dabur has 17 brands that are above Rs 100 crore but below Rs 500 crore in size.
Earlier this year, Dabur completed the acquisition of 51 per cent stake in Badshah Masala to enter the branded spices and masala market.
Now, Dabur is expanding Badshah into international markets, targeting international expatriates.
“So we have a very rich pipeline of brands to build an organization fit for the future,” Malhotra said. ,
He said power brands, which get greater allocation of funds and resources from their manufacturing and innovation to marketing, will continue to contribute 80 to 85 per cent of Dabur’s revenues.