Mumbai:

The brand franchise of Dabur remains strong and today there is a willingness from the side of the management to pursue market expansion rather than get into micro product management, a report by ASK Raymond James says.

It is expected that Dabur will deliver double-digit topline and bottomline growth in this challenging environment. According to the report, the company remains among the very few consumer companies that is not affected by margin and topline pressure.

The demerger of the pharmaceutical business (which contributes 18 per cent to its turnover) will deliver value for stakeholders. The new-found fiscal discipline within Dabur will continue to see a balance sheet contraction along with reduction in the working capital, it said.

Dabur has been among the most significant out-performers within the fast-moving consumer goods (FMCG) fold over the past couple of quarters. The FMCG sector under-performed the BSE Sensex over the past one year by 21 per cent. But in the past one month, the FMCG sector has performed in line with the market.

Dabur is among the best performer. The recent performance of the sector has been driven by an increased sense of recovery due to good monsoons and a belief that the worst is over for the FMCG sector.

Analysts expect the company''s payouts to be at over 50 per cent of the profits. There is expected to be a favourable shift from historic erratic payouts as also an indication of the management''s willingness to share the spoils.

Dabur India recently acquired Redrock and made it a wholly owned subsidiary of the company. Redrock is engaged in the business of manufacture and sale of various cosmetics, toiletries and healthcare products and operates from the Jebel Ali Free Trade Zone, Dubai.

Redrock also holds a majority beneficial stake in Weikfield International (UAE) LLC, a company registered in Sharjah that is engaged in the manufacture and sale of cosmetics and food products catering essentially to the GCC (Gulf Cooperation Council) countries.

Redrock also holds a majority stake in a joint venture company in Bangladesh, namely Asian Consumer Healthcare Pvt Ltd, which is setting up manufacturing facilities in Bangladesh to manufacture cosmetics and toiletries. Accordingly, Weikfield International and Asian Consumer Healthcare become the step-down subsidiaries of Dabur India.