This acquisition is in line with Dabur’s strategic intent to expand in Foods business to Rs 500 crore in 3 years and into new adjacent categories. Moreover, it also marks Dabur’s entry into over Rs 25,000 crore branded spices and seasoning market in India.
Shares of Dabur India were up 4 percent to Rs 551 apiece in Thursday’s intra-day trade after the company acquired a 51 percent stake in Badshah Masala Private Limited for Rs 587.5 crore (the balance 49 percent stake would be acquired after five years).
“The company has signed definitive transaction agreements to acquire 51 percent shareholding of Badshah Masala Private Limited (Badshah), which is engaged in the business of manufacturing, marketing, and export of ground spices, blended spices, and seasonings,” Dabur India said.
This acquisition is in line with Dabur’s strategic intent to expand in Foods business to Rs 500 crore in 3 years and into new adjacent categories. Moreover, it also marks Dabur’s entry into over Rs 25,000 crore branded spices and seasoning market in India.
With this acquisition, analysts at ICICI Securities believe that the company is increasing its addressable market by entering many food categories, which are either dominated by unorganized segment or has large growth potential. This would help the company to grow at a higher sustainable pace for a longer period of time, said analysts.
Meanwhile, on Wednesday, the fast-moving consumer goods (FMCG) major reported a 2.85 percent year-on-year (YoY) decline in consolidated net profit to Rs 491 crore for the July-September quarter (Q2FY23). The company’s revenue from operations, however, rose 6 percent YoY to Rs 2,986 crore in the recently concluded quarter.
“The company is investing ahead of the curve to ride this demand recovery by expanding its rural footprint by adding nearly 9,000 villages in Q2FY23 to take total coverage to over 100,000 villages,” the management said.
