Arisaig’s letter for January is now available on their website. Their Asia Consumer Fund reported a new stake in Dabur. The company is India’s largest manufacturer of branded Ayurvedic medicine & related products. The fund actually owned Dabur shares previously but exited its stake in 2007 due to valuation concerns at the time – since then, shares are up ~4x.

Ayurvedic medicine has, of course, been around for a long time but it previously struggled to break into the mainstream healthcare space. According to Arisaig, that’s changing today driven by:

• Greater health and wellness awareness amongst younger consumers
• Increased conviction and pride in national traditions
• Investment behind the category to improve its credibility and appeal

Dabur is well positioned to capitalise on these trends. ~90% of their product portfolio is sourced from herbal ingredients and the brand is trusted by customers. The company has also built out an advanced R&D operation.

The team at Arisaig see a big opportunity for the company to scale up its international business (currently only ~32% of sales) and strengthen its position in certain domestic categories (e.g. juice).