Chyawanprash-maker Dabur India is set to showcase its earnings report for the quarter ended September on October 30, 2024. The FMCG player is likely to see revenue fall in single-digits on falling consumption and low consumer offtake.
According to a Moneycontrol poll of eight brokerages, Dabur India is likely to report revenue at Rs 3,076 crore, falling four percent on-year compared to Rs 3,204 crore in the year-ago period.
Net profit is likely to come in at Rs 425 crore as against Rs 516 crore in the corresponding quarter last year, implying a fall of 17.4 percent.
Earnings estimates of analysts polled by Moneycontrol are in a narrow range, so any positive or negative surprises may elicit a sharp reaction on the stock. The most optimistic estimate sees Dabur’s net profit falling by one percent, while the most pessimistic suggests the net profit could tumble over 25 percent on-year.
Dabur India had previously announced that it would post a mid-single digit decline in the consolidated India revenue for the September quarter. Dabur said its profitability will be affected in Q2FY25, and the operating margin is expected to fall in mid-to-high teens on account of higher investment and deleveraging.
What factors are impacting the earnings?
Volume Growth: Volume growth is likely to decline by around 10 percent as a result of the distributor inventory correction in the GT channel.
"Essentially, the company largely stopped primary sales for the last 7-8 days of the quarter to enable broad-based category-wide distributor inventory correction. We note that Dabur has been most aggressive on new product launches and do not rule our some inventory returns/write-off/provisions pertaining to the same," said Kotak Institutional Equities.
Margins: Dabur continued to invest heavily in its brands, with advertisement and publicity (A&P) spending growing ahead of revenue. As a result, according to experts, Dabur India's EBITDA margin will decline, owing to subdued topline performance and higher ad spends.
Segment Performance: Badshah Masala continued to witness healthy momentum and saw double-digit growth. International business is expected to deliver double-digit growth in CC terms. However, heavy rains and floods across parts of the country affected out-of-home consumption and consumer offtake, particularly in beverages category, said Motilal Oswal.
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