Dabur India - Q4FY21 First Cut - ICICI Direct

(CMP - Rs. 534, MCap - Rs. 94,689 crore)

Dabur India's results were below our estimates on the revenue as well as earnings front.

Q4FY21 Earnings Summary

- Dabur India reported 25.3% revenue growth to Rs. 2336.8 crore (I-direct estimate: Rs. 2520.3 crore) led by 30.3% growth in domestic & 12.7% growth in international business. The strong growth was mainly on account of low base effect of corresponding quarter which was impacted by lockdown in last 10 days of March. Volume growth during the quarter was 25.4%. Health Supplements, Oral care, OTC & Ethical witnessed a robust growth of 17.7%, 42.1%, 34% & 39.1% respectively. Food & Beverage segment also saw 27.6% growth during the quarter largely due to low base quarter

- With firm agri commodity prices & rising crude based derivative, gross margins increased by 35 bps. We believe the company has taken select price increase to pass on the rising commodity costs. Given 78 bps savings in overhead spends, 85 bps savings in employee spends & 126 bps increase in advertisement spends, the company was able to maintain its operating margins at 18.9%. Operating profit increased by 25.6%

- Net profit saw increase of 34% to 377.3 crore (I-direct estimate: Rs. 432.5 crore)on the back of strong growth in operating profit, stable taxation & higher other income. The company declared a final dividend of Rs. 3/share with full year dividend of Rs. 4.75/share

Dabur has seen a strong growth of 10% in FY21 with 12.4% volume growth in India business. The company was benefited with the strong growth in health supplement & Ayurveda based products given consumption shifted towards the healthier products. We believe with the second wave of pandemic, the strong growth in health supplements & Ayurveda based products would continue. The company also launched many new products & forayed in newer category to leverage its brand equity of Ayurveda products. However, rising commodity prices is expected to result in inflationary pressures in medium term, which could adversely impact the operating margins, going forward.

We will be coming out with a detailed update after the conference call with the management.

Shares of DABUR INDIA LTD. was last trading in BSE at Rs.534.7 as compared to the previous close of Rs. 545.45. The total number of shares traded during the day was 394027 in over 11239 trades.

The stock hit an intraday high of Rs. 550 and intraday low of 532.5. The net turnover during the day was Rs. 211714243.

Source : Equity Bulls

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