Earnings Outlook
Dabur's top line growth seen subdued on truncated winter
This story was originally published at 16:52 IST on 5 May 2025
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By Anand JC
NEW DELHI – Ayurveda-focused fast-moving consumer goods major Dabur India Ltd. has said it will report a "flattish" revenue growth for the March quarter on account of a shorter winter and a slowdown in urban demand. However, solid performance in the international markets could neutralise some of this negative impact, analysts said.
Dabur's March quarter consolidated net profit is expected to decline 3% on year to INR 3.4 billion, according to an average of 16 estimates from brokerages. Its top line is expected to grow a modest 2% on year to INR 28.7 billion.
In its quarterly update, Dabur had said it expects its consolidated revenue growth to be "flattish" due to delayed winters and a demand slowdown, which caused its India FMCG business to decline in "mid-single-digits".
Dabur's portfolio, which is heavily focused on healthcare and personal care products, includes Chyawanprash, Honitus, Lal Tail, and Honey. These products contributed around 30-35% to its top line for the December quarter, as per media reports.
Operational Performance
Winter in India was shorter, Prabhudas Lilladher said. This resulted in mixed demand for healthcare and skincare products. "The winter portfolio had a mixed impact, with companies like Dabur experiencing demand challenges, while Emami benefited from the relatively normal season," the brokerage said.
Analysts expect Dabur to report an earnings before interest, taxes, depreciation, and amortisation of INR 4.6 billion, according to the average of estimates of 14 brokerages. Among the brokerages, Centrum Broking has forecast the highest EBITDA at INR 6.8 billion and Systematix Shares and Stocks has estimated the lowest at INR 4.1 billion.
Systematix expects Dabur's India volume to decline 7% on year in the March quarter. A low single-digit decline in healthcare business, a steep double-digit decline in foods and beverages business, along with flat growth in home and personal care business, would likely cause this decline, the brokerage said.
While modern trade like e-commerce and quick commerce maintained their growth momentum, general trade was under pressure, Dabur said in its quarterly update. Overall volume trends continued to be subdued, the company had said.
Dabur's India business volume grew 4.2% in the year-ago quarter and 1.2% in the December quarter. Nirmal Bang Institutional Equities expects India business volume to fall 1% in the March quarter. The six-year compound annual growth rate of its domestic FMCG volume business is 2.6%. The FMCG industry has attributed subdued demand in the urban markets, in part, to food inflation. Inflation and operating deleverage during the March quarter will lead to a year-on-year contraction of 150-175 basis points in its operating profit margin, Dabur said.
Dabur reported an EBITDA margin of 16.6% a year ago and 20.3% for the December quarter. Its management in January said it intended to maintain or slightly improve the margin trajectory, enabled by gradual price hikes, premiumisation within categories, and cost-saving initiatives. The company could also maintain its margin by improving its product mix by driving better growth from margin accretive categories such as oral care and health care, Dabur had said.
Nirmal Bang and Equirus Securities expect the EBITDA margin to fall 160 bps on year, while Centrum expects it to fall 174 bps. Nuvama Institutional Equities expects the EBITDA margin to fall 150 bps due to higher inflation in edible oil, surfactants, and incinerated gold. Dabur's Ayurvedic medicine Swarna Bhasma powder contains incinerated gold.
International Operations
Dabur in April said key markets, including West Asia, North Africa, Egypt, and Bangladesh, are expected to post strong performance in the March quarter, leading to a robust double-digit growth in constant currency terms for the international business.
Nuvama Institutional Equities expects Dabur's international business to report a 15% on-year sales growth in constant currency terms for the March quarter, but slower growth in INR terms owing to foreign exchange impact.
HDFC Securities expects currency devaluation in Turkey and Egypt to adversely impact the company. Dabur will announce its March quarter earnings on May 7. Since reporting its December quarter earnings on Jan. 30, shares of the company have fallen roughly 9%. Wednesday, its shares closed at INR 481.85 on the National Stock Exchange, up 0.3%.
Following are the Jan-Mar earnings estimates for Dabur India based on reports from 16 brokerage firms in descending order on the estimate of net profit:
Brokerage | Net sales (in INR mln) | Net profit (in INR mln) | EBITDA (in INR mln) |
Centrum Broking Ltd | 33,553.00 | 5,153.00 | 6,819.00 |
Kotak Institutional Equities | 29,531.00 | 3,894.00 | 5,009.00 |
Morgan stanley | 29,106.00 | 3,660.00 | 4,943.00 |
Nuvama Wealth Management Ltd | 29,026.00 | 3,554.00 | 4,775.00 |
IIFL Capital Services Ltd | 29,025.00 | 3,513.00 | 4,807.00 |
HDFC Securities Ltd | 28,146.00 | 3,495.00 | 4,668.00 |
PhillipCapital (India) Pvt Ltd | 28,149.00 | 3,262.00 | 4,287.00 |
Equirus Securities Pvt Ltd | 28,068.00 | 3,225.00 | 4,213.00 |
Motilal Oswal Financial Services Ltd | 27,790.00 | 3,127.00 | 4,165.00 |
Elara Securities (India) Pvt Ltd | 27,835.00 | 3,126.00 | 4,163.00 |
Sharekhan Ltd | 28,240.00 | 3,110.00 | |
Prabhudas Lilladher Pvt Ltd | 28,384.00 | 3,066.00 | 4,312.00 |
Anand Rathi Share and Stock Brokers Ltd | 28,203.00 | 3,053.00 | |
Systematix Shares and Stocks (India) Ltd | 27,941.00 | 3,045.00 | 4,146.00 |
Nirmal Bang Equities Pvt Ltd | 28,397.00 | 3,002.00 | 4,251.00 |
JM Financial Institutional Securities Pvt Ltd | 27,954.00 | 2,968.00 | 4,220.00 |
Average | 28,709.25 | 3,390.81 | 4,627.00 |
End
Edited by Saji George Titus
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