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Dabur India, a leading FMCG company, reported a consolidated net profit of ₹515.05 crore ($6.95 million) for Q2 FY24, marking a 5% YoY increase. The revenue growth of 7.2% YoY to ₹3,203.84 crore ($43.18 million) was driven by performance in both ‘Home and Personal Care’ and ‘HealthCare’ businesses. The company also declared a dividend of ₹2.75 per share.
Today, despite underperforming its sectoral index Nifty FMCG and the benchmark index Nifty 50 over the past year, Dabur India’s share price rose over a percent on the NSE. Brokerages have largely maintained their views on Dabur stock with some trimming their estimates due to a legal issue for which Dabur has product liability insurance in place.
Nuvama Wealth Management maintained a Buy call but lowered the target price to ₹680 from ₹725 earlier due to factors like the ongoing legal issue, raw material cost, increased competition intensity for a few sub-categories, and a cut in FY25E/26E EPS by 6% each. Motilal Oswal Financial Services reiterated its buy call with a target price of ₹660 at 50 times FY25E EPS, citing Dabur’s commitment to volume growth, market expansion, and effective cost management. Kotak Institutional Equities has an ‘Add’ call with a target price of ₹590.
Dabur’s beverages portfolio started witnessing growth in October and the company’s full-year operating margin guidance stands at nearly 19.5%. The company is also stepping up A&P spends (advertising and promotional spend), which is expected to provide an additional boost to its growth trajectory.
CEO Mohit Malhotra cited significant urban demand growth driven by new-age channels and early signs of rural recovery as key factors to the company’s performance. The India business reported category-leading growths with market share gains across most product lines, contributing to a volume growth of 3% in Q2.
On Thursday, Dabur India announced a Q2 FY24 net profit of ₹507.04 crore (INR100 crore = approx. USD12 million), marking a 3.29% increase from ₹490.86 crore year-on-year. The company’s shares surged by 2.56%, ending at ₹530.40 each. The board declared an interim dividend of ₹2.75 per equity share (275%) for FY23-24 in accordance with Regulations 30 and 43 of the Listing Regulations, setting November 10, 2023 as the record date.
The company’s revenue for the quarter climbed by 7.27% to ₹3203.84 crore from ₹2986.49 crore a year ago, propelled by strong performance in Home & Personal care and HealthCare businesses, which sequentially increased revenue by 2.34%. Dabur India’s EBITDA rose by 10% to reach ₹661 crore with an EBITDA margin of 20.6%.
Despite a yearly decline of 5.63%, Dabur India’s last trading price on BSE was ₹530.40 per share, and the company’s market capitalisation stood at ₹93,988.72 crore. The stock has experienced a five-year surge of 43.37%.
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