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Informist, Friday, Oct. 24, 2025

 

By Avishek Rakshit

 

KOLKATA – In line with all companies in the consumer goods industry, Dabur India Ltd. too faced sales disruptions in the September quarter from its trade channels after the government announced a cut in the Goods and Services Tax rates to boost consumption. But a low base effect in the year ago quarter helped the company limit the hit on its revenues and profit to a large extent.

 

After the government announced a prospective cut in the GST in August, trade channels in the consumer goods industry faced temporary disruption as consumers deferred purchases to benefit from lower prices which came into effect only on Sept. 22.

 

At the same time, distributors and retailers also focussed on liquidating the existing higher-priced inventory and online platforms resorted to deep discounts, thereby creating a serious imbalance in the industry. In fact, some brokerages cut their initial estimates on most consumer goods companies' revenues after the reduction in the GST.

 

Dabur, the world's largest Ayurvedic and natural healthcare company, is expected to report a nearly 7% on-year increase in its net profit for the September quarter to INR 4.5 billion and its revenue is expected to increase by just over 6% on year to a little over INR 32 billion, according to the average of estimates from 13 brokerages. On a trailing basis, the bottom line is expected to fall by nearly 12% and the top line is expected to go down by around 6%.

 

Brokerages attributed the on-year growth to a low base effect when Dabur suffered an 8?cline in sales after it allayed concerns in the general trade channels by correcting inventory. The company will detail its September quarter earnings on Oct. 30.

 

YES Securities (India) Ltd. has the highest net profit projection for Dabur at INR 4.8 billion and Prabhudas Lilladher Pvt. Ltd. has the lowest estimate at INR 4.3 billion. YES Securities also has the highest top line estimate at INR 33.6 billion and Emkay Global Financial Services Ltd. has the lowest revenue estimate at INR 31.7 billion.

 

After Dabur detailed its September quarter operational performance and demand trend, Elara Securities (India) Pvt. Ltd. cut its revenue growth projection to mid-single digit from the earlier estimate of low double-digit growth. Elara Securities said Dabur had suffered a 6-7% growth impact in primary sales due to the GST rate cut. Considering the low base effect, Kotak Securities Ltd. estimates a 5% top line growth even as trade destocking is expected to have hit 75% of Dabur's domestic business portfolio.

 

The early onset of the monsoon also resulted in tepid demand for beverages which usually see an uptick when the temperatures remain high. While Dabur admitted that its beverages portfolio had taken a hit, it said its Activ brand of juices and packaged coconut water saw a 30% uptick in sales in the September quarter.

 

In the international business, which usually accounts for 26% of the top line, key markets of West Asia, North Africa, Turkey, and Bangladesh are expected to perform well. However, the political unrest in Nepal is expected to take a toll on the company's earnings. Sector analysts expect Dabur to report mid-single digit top line growth in constant currency terms from global sales.

 

Dabur is expected to report an earnings before interest, tax, depreciation, and amortisation of around INR 5.7 billion, according to the average of estimates from 11 brokerages. YES Securities' EBITDA estimate of INR 6.2 billion is the highest and JM Financial Institutional Securities Pvt. Ltd.'s estimate of over INR 4.6 billion is the lowest.

 

Friday, shares of Dabur ended at INR 508.45 on the National Stock Exchange, down 0.6% from the previous close. The shares are down nearly 4% since the company announced its June quarter earnings in July.

 

Of the 20 research reports on the company available with Informist, 12 brokerages have a 'buy' rating on the stock at an average target price of INR 609. Five brokerages have a 'hold' rating on the stock at an average target price of INR 534 and three have a 'sell' rating on the scrip at an average target price of INR 508.

 

The following are the Jul-Sept earnings estimates for Dabur from 13 brokerages in descending order of the estimate of net profit in INR million:

 

Broker Name	Net Sales (in INR million)	Net Profit (in INR million)	EBITDA (in INR million)
YES Securities (India) Ltd	33,617	4,770	6,219
Nomura Equity Research	32,240	4,729	5,801
Kotak Securities Ltd	32,197	4,671	5,958
Emkay Global Financial Services Ltd	31,721	4,629	5,776
Motilal Oswal Financial Services Ltd	32,067	4,570	5,868
Elara Securities (India) Pvt Ltd	32,136	4,535	5,850
JM Financial Institutional Securities Pvt Ltd	31,930	4,535	4,629
Sharekhan Ltd	32,270	4,490
Nuvama Wealth Management Ltd	31,907	4,487	5,903
Systematix Shares and Stocks (India) Ltd	31,800	4,439	5,760
Anand Rathi Share and Stock Brokers Ltd	31,876	4,429
Nirmal Bang Equities Pvt Ltd	31,800	4,375	5,788
Prabhudas Lilladher Pvt Ltd	31,952	4,306	5,815
Average	32,116	4,536	5,761

 

End

 

Edited by Ashish Shirke

 

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