Dabur has nearly doubled its stock price in the last five years, surging over 96 percent from Rs 226 in 2014 to Rs 444 at present. In comparison, the Nifty50 index has risen only 32 percent, while the Nifty FMCG has grown nearly 50 percent during this period.

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However, owing to the ongoing consumer slowdown, the stock has fallen 2.1 percent in the last one year but gained 3 percent since the beginning of 2019. However, Nifty FMCG has fallen over 4 percent in the last one year and nearly six percent in 2019. Meanwhile, Nifty has also fallen over two percent in the last one year and gained 1.5 percent in 2019.

Most peers have also underperformed the stock in 2019 with Britannia, ITC, Emami, and ITC falling between 10 percent and 30 percent.

To survive the slowdown and increase its market share in the FMCG space, the company recently initiated the need to get back to the roots – Ayurveda.

The BJP government, since winning elections in 2014, have increased their focus on Ayurveda, with the formation of Ministry of Ayush in November 2014. The ministry draws a parallel between traditional remedies and wellness while reinforcing the idea of Ayurveda.

Also, the recent success of Patanjali and Himalaya in a few categories is also indicative of consumers’ increasing preference for herbal products. According to analysts, Dabur is well poised to capitalise on these trends with its longer pedigree, better sourcing and access to a wider set of manuscripts, unlike herbal peers.

The goal is to appeal to the millennial, increase accessibility and drive penetration through sampling and innovation in the case of healthcare, the management said.

Post Q1 earnings, the company said the ongoing quarter remained challenging but retained its guidance of mid-to-high single-digit volume growth for the remaining nine months of FY20. Given weak industry growth and intensifying competition, below-the-line spends will be much higher than envisaged at the beginning of the year, it added.

The company also aims to accelerate the pace of new launches – management believes it was lacking there, either in terms of quantum or commitment.

Analysts note that the successful execution of the planned strategy will be the key. The company, in the past, placed primacy on Ayurveda with mixed results. However, the intent appears much clearer now.

"Potential for herbal and herbal-based products in India is very attractive and Dabur undeniably has the pedigree to take advantage of that. However, it is worth noting that healthcare, where the ‘back to roots’ programme will have the highest impact, is only 30 percent of domestic sales," said Motilal Oswal in a report.

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