Dabur Q2 profit seen up 16.6%, volume growth may be at 9%

Dabur India will announce its second quarter (July-September) results today. Analysts on an average expect the FMCG company to fare better in a slowing consumption scenario.

The reasons are 1) significant share of product portfolio that skewed towards mass/mid segment, 2) growing share of rural sales led by distribution enhancement, and 3) recovery in margins for overseas operations, according to a CNBC-TV18 poll.

Consolidated profit after tax (post minority interest) is expected to increase 16.6 percent year-on-year to Rs 236 crore and total income may grow 13.5 percent on yearly basis to Rs 1,734 crore in three months period ended September 2013.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is likely to soar 16.1 percent Y-o-Y to Rs 313 crore and operating profit margin may expand 40 basis points year-on-year to 18 percent in the quarter gone by.

According to the poll, Dabur India will see strong organic volume growth during September quarter. Analysts expect domestic volume growth at 9 percent as against 9 percent in June quarter and in a year ago period.

Company will see good all round growth across all product categories, feel analysts.

Weak rupee will have an impact on company's fruit juice business (raw material for which is imported) while advertising and promotion spending, which peaked to 15.4 percent in June quarter, is expected to have moderated to normal level of around 13 percent during July-September quarter.

With some recovery in the Namaste business and good performance of Hobi business, analysts expect international business to grow at around 10 percent Y-o-Y because of impact in Egypt. International business grew 25 percent in a year ago period.