PL First Cut - Dabur India 2Q24

PL First Cut – Dabur India 2Q24 – Amnish Aggarwal – Head of Research, Prabhudas Lilladher Pvt Ltd

Dabur India 2Q24 – In-line results; miss on volumes

(CMP: Rs517|Accumulate)

Financial Performance:

> Revenues grew by 7.3% YoY to Rs32bn (PLe: Rs32.4bn)

> Gross margins expanded by 295bps YoY to 48.3% (Ple: 46.7%)

> EBITDA grew by 10% YoY to Rs6.6bn (PLe:Rs 6.5bn); Margins expanded by 51bps YoY to 20.6% (PLe:20.1%)

> Adj PAT grew by 3.3% YoY to Rs5.1bn (PLe: Rs5.0bn)

> Consumer care revenues grew 7.6% YoY while EBIT grew by 11.6%. Margins improved by 87bps YoY to 24.3%.

> Food segment revenues grew by 8.2% YoY while EBIT declined by 13.6%. Margins contracted by 377bps YoY to 15%.

> Retail segment revenues grew by 14.1% YoY while EBIT declined by 122.2%. Margins improved by 205bps YoY to 0.3%.

Business performance:

> Domestic volumes grew by 3% (PLe: 4%)

> Rural is improving gradually, e-com & MT is doing good

> Market share gains led by gains in Chyawanprash, honey and Glucose

> Healthcare category was flat YoY with 18.1%/8.4%/7% growth in Digestives/OTC/Ethicals

> Home Care reported 15.1% growth with 4.1%/4%/4.1% in Oral Care/Hair Oils/Shampoos

> Foods grew by 40.4% while Beverages portfolio was impacted by the uneven distribution of rains with 10% decline

> IBD witnessed 21.7% YoY growth in constant currency terms

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Dabur reported an in-line set of numbers but missed on volumes (some impact in beverages due to adverse rains. Gap between rural and urban has reduced & we expect this to continue given green shoots seen in rural sentiments. Gross margins have recovered with a fall in inflationary pressures which should continue in the near term. We have an Accumulate rating on the stock.

Stock trades at 40.5x FY25 EPS