Reckitt Benckiser (Bangladesh) valuation report: fair value BDT 1,908–2,583 (Oct 2026)

Investment case: Dettol and Harpic earn a 48% gross margin and pay out ~100%; fair value range BDT 1,908-2,583

Reckitt Benckiser (Bangladesh) PLC sells Dettol, Harpic, Lizol, Mortein, Veet and Vanish in Bangladesh. Household and toiletries products were 96% of FY2025 revenue of BDT 5.66bn and Dettol antiseptic liquid, reported as pharmaceuticals, the other 4% [1 p.253]. Reckitt Benckiser Limited, UK owns 82.96% [1 p.244]. Two group companies own the brands and charge a royalty: 6% of sales of Dettol, Veet and Gaviscon, and 4.875% of sales of Harpic, Lizol, Mortein, Vanish, Air Wick and the rest, BDT 313.9mn or 5.5% of revenue in FY2025 [1 p.248] [1 p.249].

The business is mature and very profitable on little capital. Revenue grew 3.5% a year from FY2021 to FY2025 and the gross margin has held near 48% since FY2023 [1 p.50] [1 p.51]. The company pays out about all of its profit: five-year dividends of BDT 3.89bn against profit of BDT 3.86bn [1 p.50]. Equity is therefore small and ROE was 92% on year-end equity in FY2025 [1 p.101]. Interest income is minor: BDT 33mn, 3% of pre-tax profit [1 p.260]. H1 2026 revenue fell 2.1% after a weak first quarter (Eid and the national election), then rose 6.7% in the June quarter; H1 EPS was BDT 64.34 against 62.16 [2 p.3] [5].

We put fair value at BDT 1,908-2,583 a share, base 2,230. The base blends a free-cash-flow DCF at a 13.8% cost of equity and 5% terminal growth (BDT 2,349, 60%) with a dividend discount model (BDT 2,051, 40%) [9]. It equals 12.6x our FY2026F EPS of BDT 177. The price of BDT 3,221.4 on 29-Oct-2026 [6] is above the range: it is 18.4x filed EPS for the 12 months to June 2026. On our forecast, the price corresponds to a 11.0% cost of equity, or 8.4% growth for ever, or an EBIT margin of 28.7% against 20.4% in FY2025 [9].

Reckitt UK owns 82.96% and takes a 5.5% royalty; private free float is about 11%

The company was incorporated on 15-Apr-1961 as Robinson's Foods (Pakistan) Limited, became Reckitt & Colman Bangladesh in 1986 and Reckitt Benckiser (Bangladesh) Limited in 2000 [2 p.6]. It is listed on the Dhaka and Chittagong stock exchanges, makes its products at Nasirabad in Chattogram and imports some finished goods from Reckitt Benckiser (India) (BDT 76.9mn in FY2025) [2 p.6] [1 p.270]. Manufactured goods were BDT 5,100mn of FY2025 revenue and traded goods BDT 564mn [1 p.253].

The free float is thin. The parent holds 3,919,918 of the 4,725,000 shares (82.96%). The Government of Bangladesh holds 3.77%, Sadharan Bima Corporation 1.67% and ICB and its funds 0.47%; individuals hold 6.45% and other institutions 4.67% [1 p.244]. That leaves about 11% in private hands outside the state holders, or about 530,000 shares. Average daily turnover over the last three months was about BDT 1.0mn [6]. The share count has not changed since the 1996 bonus issue [1 p.244].

Group flows are the royalty, imports and dividends. In FY2025 the company accrued BDT 201.4mn to Reckitt Benckiser Health Limited, UK and BDT 112.5mn to Reckitt Benckiser (ENA) B.V., Netherlands, under agreements dated 1-Apr-2019, and paid the parent BDT 1,305.3mn of dividends [1 p.250] [1 p.270]. The royalty payable at December 2023 was BDT 1,110.2mn, about three and a half years of charges; it was paid down in 2024 and is now one year's charge [1 p.248] [1 p.249]. The CRISL rating is AAA / ST-1 [5].

FY2025 growth was all price: cases -1.2%, price per case +4.9%; we forecast revenue +6% in FY2027F

The annual report gives cases and revenue by segment, so volume and price can be split. Household and toiletries sold 2,269,426 cases in FY2025 against 2,297,450 (-1.2%), at BDT 2,397 a case against BDT 2,286 (+4.9%) [1 p.253]. Growth was all price. Dettol antiseptic liquid sold 90,682 cases (+8.8%) at a slightly lower price; it earns a gross margin of only 11% and lost BDT 25.6mn at the operating level [1 p.251] [1 p.253]. The royalty notes give the brand split: Dettol, Veet and Gaviscon BDT 3,356mn (59%) and Harpic, Lizol, Mortein, Vanish and the rest BDT 2,308mn (41%) [1 p.248] [1 p.249].

In H1 2026 revenue fell 2.1% to BDT 2,751mn [2 p.6]. The March quarter fell 10% (fewer business days with Eid and the national election), the June quarter rose 6.7% [3 p.6] [5]. The H1 royalty charges imply that health brands (mostly Dettol) were about 57% of sales, down from 59% [2 p.8] [9]. Dettol soap is the largest single use of materials (soap noodles BDT 897mn) [1 p.256] and competes with Lifebuoy and Savlon; that rivalry, and private labels, limit price rises.

Our base has household and toiletries cases down 2% in FY2026F, then up 2% and 3%, on urban hygiene demand and population growth. Price per case rises 3% in FY2026F and 4% a year after, below the 8-10% inflation of 2025 [1 p.48]. Revenue is BDT 5.73bn in FY2026F (1.1%) and BDT 6.51bn in FY2028F [9]. The second half of FY2026F needs about 4% growth over H2 2025, against 6.7% in the June quarter.

Hygiene brands face local rivals and trade-down; revenue grew 3.5% a year FY2021-25

Reckitt sells into hygiene and home-care categories: antiseptic liquid and soap (Dettol), toilet cleaner (Harpic), floor cleaner (Lizol), insect killer (Mortein), hair removal (Veet) and stain remover (Vanish). The company describes rivalry as intense, from global groups and 'agile local firms', with low switching costs, cheaper alternatives and counterfeit products [1 p.44] [1 p.45]. It also says inflation pushed shoppers to trade down [1 p.49]. In antiseptics and soap the main branded rivals are ACI's Savlon and Unilever's Lifebuoy; in toilet and floor cleaners, local brands and unbranded acid cleaners. These names are our context: the annual report does not name competitors or give market shares, and we found no independent category size (a gap).

Demand follows urban incomes and hygiene habits. The company points to a growing middle class and rising hygiene awareness, and to weaker rural reach than urban [1 p.42] [1 p.45]. Trade receivables show the channels: traditional trade BDT 98.5mn, modern trade 17.5mn, e-commerce 14.0mn and institutions 5.6mn at December 2025 [1 p.242]. Our long-run growth of 5% in nominal taka is close to the FY2021-25 record of 3.5% a year plus some recovery in volume.

There is no close listed peer. Other multinational consumer subsidiaries on the DSE trade at 13-71x trailing earnings [7]. RECKITTBEN trades at 18.4x filed EPS for the 12 months to June 2026 (BDT 175.11) [5]. We do not use a peer multiple: peers' figures are not rebuilt from their filings and the businesses differ.

Imports are 70% of materials; each 10% in taka moves FY2027F EPS about 14%

Materials are the main cost. In FY2025 the company consumed BDT 2,151mn of raw and packing materials: raw materials 74% and packing 26%; imported 70% and local 30% [1 p.255]. Soap noodles, a palm-oil product used in Dettol soap, cost BDT 897mn, 42% of the total. Plastic containers cost BDT 267mn, and PCMX (the antiseptic in Dettol liquid), pine oil and surfactants follow [1 p.256] [1 p.257]. The taka averaged 121.68 to the dollar in 2025 against 115.43 in 2024 [1 p.268]. Manufacturing overhead, mainly wages and depreciation, was BDT 589mn [1 p.254].

The gross margin held at 48.4% in FY2025 against 48.5% [1 p.51]. In H1 2026 materials fell to 40.5% of revenue from 43.1% while manufacturing overhead rose 21% to BDT 347mn, so the gross margin was 46.8% against 46.7% [2 p.3] [2 p.6]. The company warns of higher resin, fuel and logistics costs from the Middle East conflict [1 p.49]. Our base has imported prices down 2% in dollars in FY2026F (the H1 trend) and up 2% a year after, the taka 2% weaker a year, and local costs up 6%. The gross margin is 48.0%, 47.7% and 47.6% for FY2026F-28F, against a five-year median of 48.5% [9]. We have no primary price series for soap noodles or resin (a gap).

The royalty takes 5.5% of revenue, about 21% of pre-royalty profit, and lifts the tax rate

The royalty is a fixed share of brand sales, so it scales with revenue: BDT 302.5mn in FY2024 and BDT 313.9mn in FY2025, 5.5% of revenue both years [1 p.249]; BDT 151.9mn (5.5%) in H1 2026 [2 p.6]. We model it from the two contract rates and the brand mix, giving BDT 317mn in FY2026F [9]. It takes about 21% of pre-royalty operating profit. The rate is the parent's to set: a one-point rise on both contracts would cut fair value to BDT 2,208 [9].

The royalty also lifts the tax rate. Royalty accrued but not yet paid is not deductible until it is paid, which added 2.9 points to the FY2025 rate and 3.9 points in FY2024 [1 p.261]; it added 4.5 points in H1 2026, when the rate was 27.4% [2 p.7]. The company holds a BDT 94.6mn legal provision, mainly for tax disputes including withholding tax on technical-fee remittances [1 p.248]. We use 27.0% for FY2026F and 26.0% after. Workers' profit participation takes 5% of profit before it [1 p.260].

Remittance has been slow before. At December 2023 the company owed the two brand owners BDT 1,110mn, and in 2024 it paid BDT 999mn plus advance tax [1 p.248] [1 p.249]. Payables fell BDT 766mn that year and operating cash flow was only BDT 107mn [1 p.271]. With the backlog cleared, we assume each year's royalty is paid the next year. The company gives no reason for the backlog; Bangladesh Bank's foreign-exchange rules govern remittances of royalty and dividends abroad.

Five-year record: EPS BDT 140-174, EBIT margin median 20.4%, ROE median 79%

Revenue rose from BDT 4.94bn in FY2021 to BDT 5.66bn in FY2025 [1 p.50]. EPS was BDT 171, 140, 174, 159 and 173: profit is flat in taka and down in real terms. FY2022 was the low point, when the gross margin fell to 46.0% from 54.6% as the taka fell [1 p.51]. The operating margin was 23.3%, 19.9%, 22.2%, 20.3% and 20.4% [1 p.47].

Over five years the median gross margin was 48.5%, the median EBIT margin 20.4% and the median ROE on year-end equity 79.0% [9] [1 p.101]. Our FY2027F-28F figures sit at or just below them: gross margin 47.7%, EBIT margin 19.8%. Our forecast ROE on average equity (94%) is high because equity stays near BDT 0.9bn with a 100% payout; the valuation uses the 79% median for new capital. We do not treat FY2021 as normal: its 54.6% gross margin predates the taka's fall.

Payout averaged 101% over five years; at 100% the FY2026F dividend is about BDT 177

Operating cash flow was BDT 806mn in FY2025 against profit of BDT 817mn, after BDT 107mn in FY2024 when the royalty backlog was paid [1 p.219]. In H1 2026 it was BDT 725mn [2 p.5]. Capex was BDT 139mn in FY2025 and BDT 151mn in FY2024 [1 p.219]. The company had no borrowings at December 2025, having repaid BDT 69mn [1 p.249]. Working capital is negative: accruals, provisions and payables of BDT 1.79bn exceed stock and receivables of BDT 0.97bn [1 p.216]. Cash was BDT 1.20bn at December 2025, of which BDT 500mn in short-term deposits at 6.33% [1 p.243], and BDT 1.88bn at June 2026 before the dividend [2 p.2].

Payout follows the parent's cash needs more than a fixed rule. DPS was BDT 165, 98, 55, 333 and 173 for FY2021-25, or 96%, 70%, 32%, 209% and 100% of EPS [1 p.50]. The FY2025 dividend of BDT 173 (BDT 817mn) was paid in August 2026 [5]. Over five years payout averaged 101%. We use 100% in every scenario, giving DPS of BDT 177, 183 and 196 for FY2026F-28F [9]. No regulator caps the dividend of a non-bank company. In the last 24 months the only capital actions were the two cash dividends; there was no rights issue, bonus, bond or EGM [5].

We forecast EPS of BDT 177 in FY2026F and BDT 196 by FY2028F, about 7% a year after FY2026F

Our base has EPS of BDT 176.97 in FY2026F (2.3%), BDT 183.30 in FY2027F and BDT 195.83 in FY2028F [9]. FY2026F is H1 actual (EPS BDT 64.34) [2 p.3] plus a second half built from H1 run-rates: EPS BDT 112.6 against BDT 110.8 in H2 2025 [4 p.3] [1 p.217]. By line, per share: revenue 4.3% (Q2 2026 was +6.7%) with materials at H1 2026's 40.5% of revenue, not H2 2025's 39.4%, gives gross profit +6.4; operating costs -0.3 (marketing at H2 2025 less H1's 3.5% cut, administration flat, royalty 5.5%); other income -1.1; net finance +3.1; WPPF -1.0; tax -5.8. The tax rate is 27.0%: FY2025's 24.9% included a one-off -2.37-point effect from funding the gratuity scheme [1 p.261], so the underlying rate was about 27.3%; H1 2026 was 27.4% [2 p.7]. Later years: revenue 6.1% and 7.1%; selling and distribution 8.4% of revenue, marketing 8.5%, administration +6% a year, royalty 5.5%; finance income 4.5% on opening cash; the 364-day T-bill cut-off was 8.79% [8].

The balance sheet follows the same drivers: cash is the plug, inventory 95 days of cost of sales, payables 11.5% of cost of sales, other payables 19.5% of revenue, the royalty paid a year in arrears, capex BDT 120-150mn against owned-asset depreciation of BDT 152-160mn. Our FY2026F EPS is 1.1% against the 12 months to June 2026 (BDT 175.11). The company gives no guidance and we found no earnings call in its DSE announcements.

Fair value range BDT 1,908-2,583, base 2,230 (12.6x FY2026F EPS); the price is above the range

The valuation reads off the forecast. DCF (60%): free cash flow to the firm for FY2027F-33F is discounted at the cost of equity (there is no debt) to 31-Dec-2026. Growth fades to 5% and the EBIT margin to a sustainable 20.4%, the five-year median. The terminal value uses NOPAT x (1 - g / return on new capital) with a 79% return, so reinvestment is 6.3% of NOPAT. Enterprise value is BDT 10,217mn, 55% from the terminal value. Adding year-end cash of BDT 1,311mn and deducting leases gives BDT 2,349 a share. DDM (40%): the FY2026F-28F dividends, paid each July, then a terminal value of EPS x (1 - g/ROE) / (CoE - g) at the same 79% ROE, give BDT 2,051. The DDM is lower mainly because it pays out only earnings: the BDT 239 a share of net cash at FY2026F, and the cash that builds up later, are never distributed in it. Sum of the parts does not apply: one business, no subsidiaries.

Inputs, set without reference to the price. Cost of equity = 10-year T-bond 9.27% [8] + beta 0.60 x ERP 7.5% = 13.8%. ERP 7.5% is the standard used for non-bank DSE companies in this series. The raw two-year weekly beta against DSEX is 0.37 (correlation 0.43) [6]; Blume-adjusted it is 0.58, so the 0.6 floor of the F08 spec applies. Terminal growth of 5% is the low end of the F08 staples range (5-7%), because revenue grew only 3.5% a year in FY2021-25. The 79% return on new capital is the company's five-year median ROE (range 45-92%) [1 p.101]; ROE stands in for return on capital because operating capital is negative (payables and accruals exceed stock and receivables). The sustainable EBIT margin of 20.4% is the FY2021-25 median (range 19.9-23.3%) [1 p.47]: the target every scenario fades to by FY2033F. The justified forward P/E on these inputs is (1 - g/ROE) / (CoE - g) = 10.7x; our base is 12.6x FY2026F and 12.2x FY2027F EPS, with a 8.2% FY2027F yield. The legs agree within 15%.

The price and our range. At BDT 3,221.4 the market values the company at BDT 15.2bn, 18.2x our FY2026F EPS, above our bull case of BDT 2,583. On our forecast, the price corresponds to a 11.0% cost of equity, 8.4% growth for ever, or an EBIT margin of 28.7% from FY2027F [9]. December trailing P/Es were 33.5x (FY2021, before the floor years), 34.1x and 27.4x at the DSE floor price (FY2022-23), 27.3x (FY2024) and 19.8x (FY2025) [6] [9]. The stock has de-rated as the price fell from BDT 4,820 in September 2024. We do not anchor on the market multiple: about 11% of shares trade privately and turnover is about BDT 1.0mn a day, so the price may reflect factors outside the cash flows. We put no value on them.

Risks: cases -5% cut fair value 9%; a 1pp higher royalty cuts it 1%

Each risk below changes one driver, with everything else at base; margins fade back to normal by FY2033F as in the scenarios. Volume is the largest: 5% fewer cases in FY2027F cuts FY2027F EPS to BDT 161 and fair value by 9%. Imports 15% dearer cut FY2027F EPS to BDT 151, but fair value only 4% because we assume prices catch up. Holding marketing at H1 2026's 10% of revenue costs BDT 54 a share. The parent's decisions on royalty and payout move fair value by BDT 22 and 32. Risks without a modelled number: counterfeits [1 p.45]; tax disputes over technical-fee remittances [1 p.248]; slower remittance of royalty and dividends, which in 2023 left BDT 1.1bn of royalty unpaid [1 p.248]; the payable was BDT 466mn at June 2026 [2 p.8]; and a parent offer for minority shares or a delisting, about which there is no announcement. Liquidity is thin: at BDT 1.0mn a day, small orders can move the price sharply in either direction.

FAQ

What is Reckitt Benckiser Bangladesh's fair value?

We estimate BDT 1,908-2,583 a share, base 2,230, from a DCF (60%) and a dividend discount model (40%) at a 13.8% cost of equity [9]. The price on 29-Oct-2026 was BDT 3,221.4 [6].

Which brands does Reckitt Benckiser Bangladesh sell?

Dettol (antiseptic liquid, soap), Veet and Gaviscon under Reckitt Benckiser Health, UK, and Harpic, Lizol, Mortein, Vanish, Air Wick, Brasso and Trix under Reckitt Benckiser (ENA), Netherlands [1 p.248] [1 p.249].

How much royalty does RECKITTBEN pay?

6% of sales of Dettol, Veet and Gaviscon and 4.875% of other brand sales: BDT 313.9mn, 5.5% of revenue, in FY2025 [1 p.249].

What dividend does Reckitt Benckiser Bangladesh pay?

BDT 173 a share (1,730%) for FY2025, 100% of EPS; BDT 333 for FY2024 [1 p.50].

Who owns Reckitt Benckiser Bangladesh?

Reckitt Benckiser Limited, UK owns 82.96%; the Government of Bangladesh 3.77%, Sadharan Bima 1.67%, and individuals and institutions the rest [1 p.244].

Which results does this report use?

The annual report to 31-Dec-2025 and the unaudited H1 2026 statements. The Q3 2026 results were approved on 29-Oct-2026 and will be added when filed.

Sources

1. Reckitt Benckiser (Bangladesh) PLC Annual Report and Financial Statements 2025 (year to 31-Dec-2025) · link · accessed 2026-10-31
2. Reckitt Benckiser (Bangladesh) PLC interim condensed financial statements, six months to 30-Jun-2026 (Q2 2026, unaudited) · link · accessed 2026-10-31
3. Reckitt Benckiser (Bangladesh) PLC interim condensed financial statements, three months to 31-Mar-2026 (Q1 2026, unaudited) · link · accessed 2026-10-31
4. Reckitt Benckiser (Bangladesh) PLC interim condensed financial statements, nine months to 30-Sep-2025 (Q3 2025, unaudited) · link · accessed 2026-10-31
5. DSE announcements for RECKITTBEN, Nov-2024 to Oct-2026 (quarterly EPS releases; FY2024 and FY2025 dividends; dividend disbursements; CRISL rating 11-Oct-2026; Q3 2026 board meeting notice 25-Oct-2026) · link · accessed 2026-10-31
6. AnalystBro price data (TradingView feed): DSE:RECKITTBEN daily, weekly and monthly bars, DSEX weekly, to 29-Oct-2026 · link · accessed 2026-10-31
7. AnalystBro screener: RECKITTBEN and DSE multinational and consumer peers, close 29-Oct-2026 · link · accessed 2026-10-31
8. Bangladesh Bank, Treasury auction cut-off yields (10-year bond 9.268% on 25-Oct-2026; 364-day bill 8.79% on 26-Oct-2026) · link · accessed 2026-10-31
9. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31