After roping in Priyanka Chopra for re-launching hair oil earlier and now shampoos, Dabur India is again in the news for acquiring GD Pharmaceuticals’ Eleen and Dey’s Medical-owned Keo Karpin in a bid to spruce up its sagging hair oil portfolio. The company has not denied the news completely as Sunil Duggal told Business Standard that the company is looking for niche, heritage, home-grown brands with strong recall in personal care especially hair care and healthcare segments in the eastern and southern part of India. The company has earmarked Rs 500 crore for domestic acquisitions and is likely to close a domestic deal in early 2013.
Both GD Pharma and Dey’s are based in Kolkatta and the popular brands reported to be acquired are into hair oil category. While Eleen is into perfumed light hair oil (enriched with Amla and Vitamin E), there are a range of products like hair oil, body oil and hair vitaliser sold under Keo Karpin. The acquisition, if it happens, will not be a very big acquisition considering the small size and niche presence of brands. Thus, they are unlikely to make any significant impact on hair oil revenues of the company given the presence of already larger brands like Dabur Vatika, Dabur Amla and Almond Hair oil.
Hair oil, a bigger category in the hair care business (largest for Dabur), has been struggling in last two quarters with single-digit sales growth of 8.4 per cent (June 2012) and 9.1 per cent (September 2012) compared to average 21 per cent recorded in each quarter of FY12. Marico is the market leader in hair oils whether coconut oil (Parachute has 57 per cent market share) or value added hair oils (Parachute advanced, Nihar, Hair and Care has emerged as market leaders with a share of 25 per cent). The company has gained market share in both these categories in Q2FY13.
Analysts feel Dabur may be better off focusing more on shampoos (another category in hair care), which has been witnessing consistent improvement in sales growth--4 per cent, 16.8 per cent, 23 per cent and 40.2 per cent respectively--for the past four consecutive quarters ending September 2012. Roping in Bollywood actor Priyanka Chopra for re-launching of Vatika Premium Naturals Shampoo range will help hold on to the strong growth momentum according to the company.
The stock (Rs 127) outperformed BSE FMCG index with gains of 1.9 per cent compared to 1.1 per cent in case of latter on
Monday.