Chyawanprash-maker Dabur India is set to showcase its earnings report for the quarter ended June on August 1, 2024. The FMCG player is likely to see revenue grow in mid-single digits as rural demand still has not made a complete recovery.
According to a Moneycontrol poll of eight brokerages, Dabur India is likely to report revenue at Rs 3,286 crore, rising five percent on-year compared to Rs 3,131 crore in the June quarter of FY24.
Net profit is likely to come in at Rs 499 crore from Rs 464 crore from the corresponding quarter last year, higher by 7.6 percent.
Earnings estimates of analysts polled by Moneycontrol are in a narrow range, so any positive or negative surprises may elicit a sharp reaction in the stock. The most optimistic estimate sees Dabur’s net profit jumping over 15 percent on-year.
What factors are impacting the earnings?
Consolidated sales are expected to grow in mid-single digits led by HPC and the healthcare portfolio, said Axis Securities.
Segmental performance: The healthcare and HPC portfolios are expected to lead growth. The food business was impacted due to weaker sales of beverages led by low out-of-home consumption due to the heatwave.
The hair oil category is expected to see flat sales as competition remains high at the bottom of the pyramid. Oral care will likely sustain double-digit growth, where the company has affected price hikes. Digestives are also likely to sustain double-digit growth momentum, said Emkay Global.
Margins: The gross margin is likely to expand sharply, rising over 140 basis points to 48 percent, as per Kotak. However, as A&P spends to expand 14 percent on-year, coming in at 7.1 percent of sales versus 6.5 percent in 1QFY24, the expansion in EBITDA margins will be at a slower pace.
Rural demand: Rural recovery is expected to be seen in Dabur’s portfolio, as rural growth is likely to outpace urban growth during the quarter.
What to look out for in the quarterly show?
Analysts will closely monitor demand in metro areas compared to the rural outlook, along with the competitive intensity. Additionally, the Street will be closely watching for NPD performance and new launches in niche segments; domestic demand outlook coupled with international business performance and distribution expansion.
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