FMCG Sector Stocks – Marico vs Dabur

Company Overview of Marico Ltd

Marico Limited is an Indian company that specializes in consumer goods within the beauty and wellness sectors on a global scale. The company offers a range of products including coconut oil, refined edible oils, haircare products, male grooming items, and packaged foods. Its well-known brands include Parachute, Saffola, Nihar Naturals, Hair & Care, Livon, Set Wet, and many others. 

Marico operates internationally with a presence in approximately 50 countries and runs seven manufacturing facilities in India. Its subsidiaries include MBL Industries Limited and Marico Middle East FZE.

Company Overview of Dabur Ltd

Dabur India Limited operates as a fast-moving consumer goods (FMCG) company with divisions in Consumer care, Food, Retail, and Other segments. The Consumer care division encompasses home care, personal care, and health care products. Within the Food segment, the company offers juices, beverages, and culinary items. 

The Retail division focuses on retail stores, while the Other segments include Guar gum, pharma, and other miscellaneous products. Dabur’s product range spans categories such as hair care, oral care, health care, skin care, home care, and Energizers, Ethicals. The company’s FMCG lineup includes popular brands like Dabur Chyawanprash, Dabur Honey, Dabur PudinHara, Dabur Lal Tail, and Dabur Honitus in health care; Dabur Amla and Dabur Red Paste in personal care; and Real in the food and beverage sector.  

The Stock Performance of Marico Ltd

The table below displays the month-by-month stock performance of Marico Ltd for the past year.

The Stock Performance of Dabur Limited

The table below displays the month-by-month stock performance of Dabur India Ltd for the past year.

Fundamental Analysis of Marico Ltd

Marico Ltd is a prominent Indian consumer goods company, well-known for its innovative products in the beauty and wellness sector. Established in 1990, it has developed a diverse portfolio that includes brands like Parachute, Saffola, and Livon. The company focuses on providing high-quality products while maintaining a strong commitment to sustainability and social responsibility.  

The stock closed at ₹652.60 with a market cap of ₹84,437.85 crore and a dividend yield of 1.45%. It has delivered a 5-year CAGR of 13.33% while trading 10.30% below its 52-week high. Despite a slight dip in recent months, it maintains a 12.38% net profit margin.

• Close Price ( ₹ ): 652.60
• Market Cap ( Cr ): 84437.85
• Dividend Yield %: 1.45
• Book Value (₹): 4169.00
• 1Y Return %: 22.77
• 6M Return %: -2.21
• 1M Return %: 2.98
• 5Y CAGR %: 13.33
• % Away From 52W High: 10.30
• 5Y Avg Net Profit Margin %: 12.38

Fundamental Analysis of Dabur Limited

Dabur India Limited is a leading consumer goods company based in India, renowned for its diverse range of health and wellness products. Founded in 1884 by Dr. S.K. Burman, Dabur began as a small pharmacy and has since evolved into a major player in the Ayurvedic and natural products market. Its extensive portfolio includes personal care items, home care solutions, and food products, catering to a wide array of consumer needs.  

The stock closed at ₹522.40 with a market cap of ₹92,585.74 crore and a dividend yield of 1.05%. It has a 5-year CAGR of 1.39% while trading 28.64% below its 52-week high. Despite recent losses, it maintains a strong 15.43% net profit margin.

• Close Price ( ₹ ): 522.40
• Market Cap ( Cr ): 92585.74
• Dividend Yield %: 1.05
• Book Value (₹): 10303.08
• 1Y Return %: -6.51
• 6M Return %: -18.50
• 1M Return %: 0.36
• 5Y CAGR %: 1.39
• % Away From 52W High: 28.64
• 5Y Avg Net Profit Margin %: 15.43

Financial Comparison of Marico and Dabur

The table below shows a financial comparison of Marico Ltd and Dabur India Ltd.

Points to be noted:

• (TTM) Trailing 12 Months – Trailing 12 months (TTM) is used to describe the past 12 consecutive months of a company’s performance data when reporting financial figures.
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): Measures a company’s profitability before accounting for financial and non-cash expenses.
• PBIT (Profit Before Interest and Tax): Reflects operating profit by excluding interest and taxes from total revenue.
• PBT (Profit Before Tax): Indicates profit after deducting operating costs and interest but before taxes.
• Net Income: Represents the company’s total profit after all expenses, including taxes and interest, are deducted.
• EPS (Earnings Per Share): Shows the portion of a company’s profit allocated to each outstanding share of stock.
• DPS (Dividend Per Share): Reflects the total dividend paid out per share over a specific period.
• Payout Ratio: Measures the proportion of earnings distributed as dividends to shareholders.

Dividend of Marico and Dabur

The table below shows a dividend paid by the company.

Advantages and Disadvantages of Investing in Marico

Marico Ltd

The primary advantage of Marico Ltd lies in its established presence in the fast-moving consumer goods (FMCG) sector, particularly in personal care and health products, which ensures consistent demand and strong brand recognition in both domestic and international markets.

1. Strong Brand Portfolio: Marico has a robust portfolio of trusted brands like Parachute, Saffola, and Livon, which enjoy high consumer loyalty. This helps the company maintain a competitive edge in the FMCG sector, driving sustained revenue growth.
2. Diverse Product Range: The company operates across various product categories, including hair care, health foods, and skin care. This diversification allows Marico to cater to different consumer needs, ensuring broad market appeal and mitigating risks from market fluctuations.
3. International Presence: Marico’s international operations, particularly in the Middle East, Africa, and Southeast Asia, contribute significantly to its revenue. Expanding its footprint globally provides access to new markets and growth opportunities, diversifying income streams.
4. Focus on Innovation: Marico invests heavily in product innovation, adapting to changing consumer preferences. By launching new variants and formulations, the company stays relevant in a competitive market, maintaining customer interest and driving brand expansion.
5. Sustainability Initiatives: Marico has embraced sustainability practices by focusing on eco-friendly packaging, reducing carbon emissions, and promoting ethical sourcing. These initiatives not only enhance its corporate image but also align the company with evolving consumer expectations around environmental responsibility.

The main disadvantage of Marico Ltd lies in its heavy reliance on a few key brands, such as Parachute and Saffola, which makes the company vulnerable to changing consumer preferences or competitive pressures within the FMCG sector.

1. Brand Dependency: Marico’s revenue generation is closely tied to the success of flagship products like Parachute and Saffola. If consumer preferences shift or competitors launch stronger alternatives, the company could experience a decline in market share and profitability.
2. Price Sensitivity: As an FMCG company, Marico faces pressure from rising raw material costs, which can lead to increased product prices. Such price hikes could affect consumer demand, especially in cost-sensitive markets where competition is fierce.
3. Intense Competition: The FMCG sector is highly competitive, with numerous global and local brands vying for market share. Marico faces challenges from established players, which could lead to a loss of market position if it fails to innovate or adjust to trends.
4. Slow Growth in Domestic Market: Marico’s growth in India, though steady, has been slower compared to other emerging markets. The company must find new ways to drive growth within its home market, especially as the FMCG landscape becomes increasingly saturated.
5. Regulatory Challenges: Marico, like other FMCG companies, must navigate complex regulatory environments, particularly in international markets. Changes in regulations, such as new labeling laws or import/export restrictions, can affect product availability and increase operational costs.

Advantages and Disadvantages of Investing in Dabur

Dabur India Ltd

The primary advantage of Dabur India Ltd lies in its strong portfolio of Ayurvedic and natural health products, which appeals to a growing demand for wellness, and its well-established brand recognition in both domestic and international markets.

1. Wide Product Range: Dabur offers a diverse product portfolio across various categories like health care, personal care, and food. This diversification ensures the company caters to a broad consumer base, mitigating risks associated with dependency on a single product line.
2. Strong Brand Equity: With well-known brands like Dabur Amla, Real, and Vatika, the company enjoys high consumer loyalty. Its strong brand equity helps retain market share, attract new customers, and maintain competitive pricing, driving consistent revenue growth.
3. Focus on Natural and Ayurvedic Products: Dabur’s emphasis on natural and herbal-based products aligns with the growing consumer preference for wellness and organic products. This strategy helps differentiate Dabur in a competitive FMCG market, positioning it as a trusted brand for health-conscious consumers.
4. International Presence: Dabur has successfully expanded its footprint in global markets, particularly in the Middle East, Africa, and South Asia. Its international operations contribute significantly to its revenue, helping mitigate risks from domestic market saturation.
5. Innovation and R&D: Dabur invests heavily in research and development to innovate and adapt to changing consumer demands. New product launches and improvements in existing products allow the company to stay relevant and competitive in the fast-evolving FMCG sector.

The main disadvantage of Dabur India Ltd lies in its reliance on the FMCG sector, where high competition and price sensitivity can affect profitability, especially when facing increased raw material costs or aggressive pricing strategies from competitors.

1. Intense Market Competition: Dabur operates in a highly competitive market, with both local and global players vying for market share. Increased competition can lead to pricing pressure, reduced margins, and the risk of losing customers to more affordable alternatives.
2. Dependency on Key Brands: Dabur’s reliance on flagship products like Dabur Amla and Real means that any decline in consumer demand for these items could significantly affect revenue generation, making the company vulnerable to shifting market trends.
3. Raw Material Cost Fluctuations: As an FMCG company with a focus on natural and herbal ingredients, Dabur is susceptible to fluctuations in the cost of raw materials. Any increase in these costs can erode profitability and necessitate price hikes, impacting consumer demand.
4. Regulatory Risks: Operating in multiple markets requires Dabur to comply with varying regulatory standards. Changes in food safety, packaging, or labeling regulations in different countries could lead to increased compliance costs and operational delays.
5. Domestic Market Saturation: In India, Dabur faces challenges from market saturation, particularly in the personal care and health segments. As growth in these areas slows, the company must explore new markets or diversify its product offerings to maintain growth.

How to Invest in Marico and Dabur Stocks?

To invest in Marico and Dabur stocks, investors need to first open a demat and trading account with a registered stockbroker. After choosing the stocks, investors can place buy orders through the broker’s platform and monitor their investments.

1. Open a Demat and Trading Account: The first step is to open a demat and trading account with a broker like Alice Blue. This allows you to securely buy, hold, and sell stocks in a regulated environment, enabling smooth transactions.
2. Research the Stocks: Before investing, conduct thorough research on Marico and Dabur, analyzing their financial performance, growth prospects, and market trends. Understanding their business strategies and competitive position helps make informed investment decisions aligned with your risk tolerance.
3. Select Stocks and Place Orders: Once you’ve researched the stocks, log into your Alice Blue account, search for Marico and Dabur, and place a buy order. Specify the quantity and price at which you want to purchase the shares, ensuring you meet your investment goals.
4. Monitor Stock Performance: After making the purchase, it’s essential to regularly monitor the performance of your investments. Use Alice Blue’s tools to track Marico and Dabur stocks, staying updated on market developments that might impact the value of your investments.
5. Review and Adjust Portfolio: Over time, review your portfolio to ensure it aligns with your financial goals. If needed, adjust your holdings in Marico and Dabur based on market conditions, company performance, and changing personal objectives.

Marico vs Dabur – Conclusion

Marico has a strong presence in the personal care and health food sectors, with popular brands like Parachute and Saffola. Its focus on innovation and international expansion has led to steady growth, but it faces intense competition in a price-sensitive market.

Dabur stands out with its focus on Ayurvedic and natural products, offering a diversified portfolio including health care and personal care. Its strong brand recognition and international presence provide growth opportunities, though dependency on key products makes it vulnerable to market fluctuations.

FMCG Sector Stocks – Marico vs Dabur – FAQ

Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.