Wednesday, June 03, 2009

Handing over the reins of the company to outsider CEOs is not the latest twist in the tale for Dabur...

But it sure has helped the company to wade through troublesome waters, growing from an ayurvedic company to a complete beauty and healthcare giant. Research had proven it before, Dabur has proven it again. What next now?Angshuman Paul answers...

You’d have heard of many slumdogs turned millionaires (no reference to that film here; read the editorial for it). And no surprises – we know of one too; not exactly a slum dweller though, but one who rose up the social and capital ladder, from a small pharmacy in Kolkata to a posh green office in Kaushambi (Ghaziabad)... Yes, Dabur, a Rs.3,000 crore ayurvedic-product manufacturing company, owns it!

So what’s there to tell beside the dramatic surge of Dabur’s brand valuation over the past years? Run through the management cadre and you’d understand how Dabur has managed this feat, not often associated with ayurvedic companies! Change in management style is what has helped the company to a great extent, change from being a family-run business to a professionally-run organisation. So what’s the latest where earnings are concerned for the herbal giant? Call it a change in management that has turned things around for Dabur, but surprisingly, even during times when most pharma companies are being weighed-down by losses, Dabur’s financials sit pretty, having posted a smashing y-o-y topline growth of 19.9% for Q3, FY 2009 to touch Rs.779 crore. Of course, many experts (like Angel Broking) claim that there was a significant 4-5% contribution of the associated price hike in the overall growth in profitability of Dabur, but the truth also is that the topline growth was primarily due to the swashbuckling advancements made by its International Business Division, which on a y-o-y basis grew by a handsome 48.2% during Q3, FY2009, led by markets like Egypt (85%), Bangladesh (65%) and North Africa. What’s better? As per analysts at Angel Broking, the estimated net sales for the company for FY2009 also stands at a handsome Rs.2,818 crore, a growth of 19.3% y-o-y, and the highest in the past three years! Great numbers, and perhaps enough to give many investors smiles; but that’s perhaps where troubles start surfacing...

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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