Dabur India rises after good Q1 biz update

6 Jul 2022 , 01:06 PM

The growth in India business is backed by mid-single digit volume growth. Food & Beverages vertical has seen strong double-digit growth in the quarter on the back of improving out of home consumption, innovation, and intense summer season, Home and Personal Care portfolio is expected to record high single to low double-digit growth on a high base of 26.1% growth in Q1 FY22. Healthcare vertical is expected to report a decline over last years high base as the business had registered a growth of 30% in Q1FY22 led by the surge of Delta variant of Covid-19 during the quarter. During the quarter, consumption pressure continued across the sector on account of unprecedented inflation which has impacted the share of the income available for spending on consumer staples. This was witnessed across urban and rural markets, the company stated. Daburs International business is expected to register high single digit revenue growth during the quarter in constant currency, however due to currency devaluation particularly of Turkish Lira the reported growth in Rs would be in low single digit. Overall, the consolidated revenue is expected to grow at mid to high single digits. The company said that it will continue to grow ahead of category growths and gain market share in most of our segments. On the profitability front, inflationary pressures continue to impact input costs such as crude led derivatives, vegetable oils, honey and other agri-based commodities. The firm is taking judicious price increases and has embarked on cost saving initiatives to mitigate the impact on our margins. However, the input cost pressure combined with portfolio mix changes have led to a near term impact on the operating margins which are expected to be lower by around 200 bps as compared to Q1FY22, with margins normalising to pre-covid levels for Q1 despite unprecedented inflation. During Q1 FY22 and FY21, the operating margins were higher than normal due to Covid-led surge in Healthcare vertical. The company continues to target higher than industry growth on a medium to long term perspective with stable margins, although there are near term inflationary pressures. In spite of high inflation and near-term consumption pressure, the company will continue to invest behind power brands, innovation, A&P, distribution expansion and a strong back end which will help us drive long term sustainable growth of the business. Dabur India is one of Indias leading FMCG companies. The companys FMCG portfolio today includes eight brands; Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara and Dabur Lal Tail in the Healthcare space; Dabur Amla and Dabur Red Paste in the Personal care category; and R?al in the Foods & Beverages category. The FMCG company reported a 22% decline in consolidated net profit to Rs 294.22 crore despite a 7.7% rise in revenue from operations to Rs 2,517.81 crore in Q4 FY22 over Q4 FY21. Powered by Capital Market - Live News