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View Promises →Dabur India Limited — Q2 FY24
Dabur's Q2 FY24 consolidated revenue grew 7.3% YoY to INR 3,204 crore, with constant currency growth of 10.4%.
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Dabur's Q2 FY24 consolidated revenue grew 7.3% YoY to INR 3,204 crore, with constant currency growth of 10.4%. International business was a standout, growing 23.6% in constant currency. India business ex-beverages grew 6% with 5% volume growth. Gross margin expanded ~300bps YoY due to material deflation, but A&P spend increased 43% to support brands. PAT grew 14.1% despite INR 36 crore exceptional legal cost related to Namaste LLC litigation. Home care (up 15%) and foods (Hommade +40%) were strong; beverages declined 10% due to uneven rainfall and festive shift. Management expects rural recovery to continue and guides for ~19.5% annual operating margin despite ongoing legal costs. Key risk: escalation of Middle East conflict could impact international business growth.
डाबर की दूसरी तिमाही में कुल कमाई 7.3% बढ़कर 3,204 करोड़ रुपये हो गई। विदेशी कारोबार में 23.6% की जबरदस्त बढ़ोतरी हुई। भारत में पेय पदार्थों को छोड़कर बाकी कारोबार 6% बढ़ा, जिसमें बिक्री की मात्रा 5% बढ़ी। कच्चे माल की कीमतें घटने से कंपनी का मुनाफा बढ़ा, लेकिन विज्ञापन पर खर्च 43% बढ़ाया गया। होम केयर (15% बढ़ा) और खाद्य उत्पाद (होममेड 40% बढ़ा) ने अच्छा प्रदर्शन किया। पेय पदार्थों की बिक्री 10% घटी क्योंकि बारिश कम हुई और त्योहारों का समय बदल गया। कंपनी को उम्मीद है कि गांवों में कारोबार सुधरेगा और सालाना परिचालन मुनाफा 19.5% रहेगा। खतरा: मिडिल ईस्ट में लड़ाई बढ़ने से विदेशी कारोबार प्रभावित हो सकता है।
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Namaste LLC litigation costs and business impact
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Read Transcript →Quarter Snapshot
International Business Constant Currency Growth
23.6%
+23.6pp YoY
International business grew 23.6% in constant currency, driven by MENA (+18.4%), Egypt (+35%), Turkey (+78%), and Bangladesh (+11%).
Odomos Market Share Gain
65%
+556bps YoY
Odomos gained 556bps market share in mosquito repellent category, reaching 65% share.
Direct Reach Outlets
1.4M
+0.1M vs last quarter
Direct distribution reach stands at 1.4 million outlets, targeting 1.5 million by fiscal year end.
Hair Oil Market Share
17%
+143bps YoY
Dabur's hair oil market share improved by 143bps to 17%.
What Changed vs Last Quarter
NEW
Annual operating margin guidance of ~19.5%
Management reiterated commitment to ~19.5% annual operating margin despite INR 63 crore legal cost in H1 and recurring costs of ~INR 20 crore per quarter.
NEW
Direct reach to increase to 1.5 million outlets by year-end
Direct distribution reach will increase from current 1.4 million to 1.5 million outlets by end of fiscal year.
UPDATED
Foods portfolio to exit year at INR 500 crore run rate
Despite high spice inflation, Dabur remains committed to exiting the fiscal year with a run rate of INR 500 crore from its foods portfolio.
UPDATED
International business to sustain high double-digit constant currency growth in H2
Management expects international business to continue high double-digit constant currency growth in second half, barring escalation of Middle East conflict.
DROPPED
EBITDA margin band of 19-19.5% for FY24
Management reiterated maintaining EBITDA margin in the 19-19.5% range, with any gross margin upside reinvested into media.
DROPPED
Healthcare vertical targeting INR 150 crore incremental sales
New therapeutics division with 400 specialists targeting INR 150 crore incremental revenue in FY24, reaching 70,000 allopathic doctors.
NEW RISK
Namaste LLC litigation costs and business impact
Ongoing multi-district litigation in US against hair relaxer industry could result in continued legal costs (~INR 20 crore/quarter for ~2 years) and potential revenue loss from relaxer portfolio (25% of Namaste's $45-50M business).
NEW RISK
Middle East conflict escalation
If the Israel-Hamas war spreads to the broader region, Dabur's international business (MENA region grew 18.4% in Q2) could be adversely impacted.
NEW RISK
South India rural weakness and credit issues
South India rural market is lagging due to poor monsoon and credit extension issues, with inventory build-up and delayed payments affecting business.
NEW RISK
Beverage business competitive pressure
New entrant Storia in coconut water impacted Dabur's market share in modern trade; recovery depends on aseptic PET bottle capex (INR 30-40 crore) which may take time to yield results.
RISK GONE
Beverage weakness due to unseasonal rains
Beverage portfolio declined ~1.6% in Q1 due to unseasonal rains in North and West India; full-year growth may be muted if weather patterns persist.
RISK GONE
Honey purity controversy
Recent study questioned Dabur Honey purity; management strongly refutes claims but reputational risk remains, though past controversies led to market share gains.
RISK GONE
US litigation on hair relaxer products
Subsidiary Namaste LLC named in lawsuit alleging harmful effects of hair relaxers; portfolio is <1% of revenue and insured, but legal outcome uncertain.
RISK GONE
Input cost inflation in food basket
Spices inflation at 19% and fruit concentrate inflation impacting food margins; may offset deflation in other raw materials.
Fast read
Guidance and risk preview
Management reiterated commitment to ~19.5% annual operating margin despite INR 63 crore legal cost in H1 and recurring costs of ~INR 20 crore per q...
Ongoing multi-district litigation in US against hair relaxer industry could result in continued legal costs (~INR 20 crore/quarter for ~2 years) an...
View Risks →