Analyst Concall
Dabur sees high single digit value growth in India ops FY26
This story was originally published at 19:15 IST on 7 May 2025
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--Dabur: Beverages value declined Jan-Mar due to urban consumption slowdown
--CONTEXT: Dabur management's comments in post-earnings investor call
--Dabur: See macros improving going ahead, leading to growth recovery for co
--Dabur: Open to M&A opportunities which create future fit pdt portfolio
--Dabur: Open to M&A opportunities which are revenue accretive
--Dabur:Expect India ops growth recovery to be gradual with improving macros
--Dabur: Embarking on premiumisation across all three key verticals
--Dabur: Took around 1.6% price increase in beverages segment Jan-Mar
--Dabur: Took around 4.5% price increase in healthcare segment Jan-Mar
--Dabur: High cost inflation, competitive intensity hit Jan-Mar gross margin
--Dabur: See India ops value growth FY26 in high single-digit
--Dabur: See slow, gradual recovery in beverages value growth
By Rajesh Gajra
NEW DELHI – After a tough 2024-25 (Apr-Mar) for its India businesses due to subdued demand trends in the fast moving consumer goods industry, the management of Dabur India Ltd. Wednesday guided for a high single digit value growth in FY26. Speaking to analysts and investor at a post-March quarter earnings conference call, the management said it expects the growth to be gradual and sequential in nature on the back of improving macroeconomic factors.
In the near term, softening food inflation and income tax cuts will put more money in the hands of the consumer, and along with a likely good monsoon, these will aid the recovery in growth going forward, the management said. The rural demand is already picking up and "urban green shoots will also come in gradually and slowly," the management said.
In the March quarter, Dabur saw decline in value growth on a year-on-year basis in the oral care and hair care businesses in the home and personal care segment. There was also a decline in the health supplements, over-the-counter and ethical, and digestives businesses in the company's healthcare segment.
In the foods and beverages segment, the value growth in beverages, which contributed 19.7% of total India revenue, fell 9.2% on year. Slowdown in urban consumption and competitive intensity were the key reasons behind this fall, according to the management. Going forward, the company sees a slow, gradual recovery in beverages value growth and expects the growth in low to mid single digits, according to the management.
To an analyst's question on a sharp contraction in the gross margin for the company in the March quarter, the management said that cost inflation in the quarter was the highest in any quarter in FY25, and competitive intensity was also very high. The company did try to balance the need to grow volume and pass on rising costs in the March quarter, and took around 4.5-5.0% price increase in healthcare, 1.6% price increase in beverages, the management said. The impact of this will also flow into the June quarter, it said.
To improve the profitability, the company is embarking on premiumisation across all the three verticals, the management said, but pointed out premiumisation is a lever that can only be used for products sold in the urban market. The biggest benefit expected from premiumisation will be in the personal care segment, the management said.
While steering the company through the expected growth recovery phase, Dabur India is also open to merger and acquisition opportunities which are revenue accretive or which go into creating future fit portfolio that the company is aiming for, the management said.
The company announced its March quarter earnings Wednesday. Dabur's consolidated net profit declined 8% on year to INR 3.20 billion while its consolidated revenue from operations increased by a marginal 0.6% to INR 28.30 billion. On Wednesday, shares of Dabur India increased 0.3% to INR 482.10 on the National Stock Exchange of India. End
Edited by Akul Nishant Akhoury
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