Dabur India Ltd - Update for Quarter June 30, 2022 - Q1 FY23

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.

In this challenging macro environment Dabur's India business has been fairly resilient and is expected to report high single digit revenue growth on a very high base of 35.4% revenue growth in Q1 FY22. This 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 outof home consumption, innovation, and intense summer season, h-lome 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 year's high base as the business had registered a growth of 30% in Q1FY22 led by the surge of Delta variant of Covid-1 9 during the quarter.

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 INR would be in low single digit.

Overall, the consolidated revenue is expected to grow at mid to high single digits. We 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. We are taking judicious price increases and have 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 of 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.

This update provides an overall summary of the performance and demand trends witnessed during the quarter ended June 30, 2022 (Q1 FY23). This will be followed by detailed financial results and earnings presentation once the Board of Directors of the Company approves the consolidated and standalone financial results for the quarter ended June 30, 2022.

Shares of Dabur India Limited was last trading in BSE at Rs. 530.20 as compared to the previous close of Rs. 524.90. The total number of shares traded during the day was 39256 in over 1773 trades.

The stock hit an intraday high of Rs. 532.65 and intraday low of 527.25. The net turnover during the day was Rs. 20817879.00.

Source : Equity Bulls

Keywords

DaburIndia INE016A01026 Q1FY23 OperationalUpdate