Dabur India said that ICRA has reaffirmed its rating on the long-term debt instruments of the company at '[ICRA] AAA' with 'stable' outlook.
The credit rating agency has reaffirmed Daburs short term rating at [ICRA] A1+.
ICRA stated that the reaffirmation of ratings factors in Dabur India's (Dabur) continued healthy operating and financial performance, as reflected in its healthy volume growth (across product categories), robust cash flows, strong balance sheet and superior liquidity position.
The ratings continue to derive strength from Daburs position as one of the leading companies in the domestic fast-moving consumer goods (FMCG) segment, its well-established brands in the ayurvedic/ herbal category, healthy market share for many of its products, strong distribution network and a diversified product portfolio.
The ratings remain supported by Daburs strong balance sheet with negative net debt position and strong credit metrics.
Dabur is continuously seeking synergistic acquisitions in both domestic and international markets in an endeavour to increase its market share and brand portfolio. In this regard, ICRA notes that the company had acquired nearly 51% stake in Badshah Masala w.e.f. 2 January 2023, a branded player in the spices and condiments category with major presence in Gujarat, Maharashtra and Telangana, at a consideration of approximately Rs 588 crore.
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This acquisition was funded by internal accruals and existing liquid investments and is expected to help expand the companys foods business over the medium term. ICRA expects the management to continue to adopt a disciplined approach while evaluating further inorganic growth opportunities.
Dabur continues to remain exposed to intense competition in the FMCG sector and risk of growth slowdown due to a challenging macro-economic environment. The domestic FMCG business continues to witness competition with multiple established players, including some large multinational players as well as domestic companies.
Dabur India is among the top four FMCG companies in India. It has business interests in healthcare, personal care and food products. The company offers products in over 100 countries across the globe, covering health and personal care segments across the herbal and natural space.
The FMCG major's consolidated net profit rose 8.04% to Rs 514.22 crore on 6.96% increase in revenue from operations to Rs 3,255.06 crore in Q3 FY24 over Q3 FY23.
The scrip shed 0.30% to end at Rs 522.35 on the BSE on Friday.
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