Dabur Q4 net seen up 10%, Nepal issue may hit volume growth

Dabur is likely to report net profit at Rs 313 crore, up 9.8 percent in January-March quarter from Rs 285 crore in corresponding quarter last fiscal. According to a CNBC-TV18 poll, revenue may jump 6.1 percent at Rs 2069 crore in Q4FY16 against Rs 1950 crore year-on-year. During the quarter, EBITDA is seen up 9.2 percent at Rs 378 crore versus Rs 346 crore and EBITDA margins may come in at 18.3 percent versus 17.7 percent YoY.

Analysts polled by CNBC-TV18 expect a tepid 3-5 percent volume growth on annual basis and feel margins will expand due to benign input cost environment but expansion may show moderation. Growth in international businesses is expected to remain healthy.

Volumes may be impacted by Nepal border issues, intensified competition in Ayurveda-based FMCG products and demand ticking up slowly amid muted winter sales. Analysts also feel volumes may be partially lifted by growth in categories like oral care and hair care overall.

Gross margins are likely to expand 100 basis points due to input cost deflation but it may be partially offset by higher overheads. Analysts say margin expansion may see moderation due to base effect. Promotional intensity due to increasing competitive intensity may partially offset gains from input cost. Other expenses are seen to be higher due to restarting Nepal operaion.

International business is likely to grow at 12 percent (YoY).Growth in the US may  be sustained by Namaste. Healthy constant currency growth is seen at 15 percent led by Middle East and Bangladesh.