Dabur profit inches up marginally in Q3, revenue rises 8%

Fast-moving consumer goods major Dabur reported modest numbers for the third quarter ended December 31, 2021, with single-digit growth in its top line and little change in its bottom line.

Dabur’s net profit came at Rs 503.3 crore for the three months, compared with Rs 492 crore in the year-ago period. On a sequential basis, net profit marginally declined from Rs 504.35 crore in the second quarter.

The FMCG firm’s operating revenue rose 7.8% to Rs 2,941.75 crore compared with a year earlier. On a sequential basis, revenue rose 4.4%.

Dabur’s share price rose 2% in a strong Mumbai market on Wednesday. The company declared its financials before trading stopped for the day.

Other Key Highlights

1) Q3 margin at 21.33% was down from 22.03% in Q2 but a tad higher than 21.04% in the year-ago period.

2) Core consumer care business remains stuck at a low growth path, rising 4.1% over Q3 FY21 to Rs 2,543.23 crore.

3) Food business revenue rose 39% to Rs 329 crore, profit nearly doubled to Rs 50 crore.

4) Retail business marked operational break-even. Digestives business grew 12.2%.

5) Home care business posted 19% growth while the skin care business, excluding the sanitiser range, grew 20%.

6) Hair care category reported 8.4% growth, riding on 21% surge in shampoo business.

7) Toothpaste business was up 8.1% while the ayurvedic ethicals business grew 8.3%.

8) Dabur posted market share gains across portfolio, led by a 514-basis-point improvement in juices and nectars market to the highest-ever share of 64.3%.

9) Dabur’s international Business reported growth of 8.7% in constant currency terms.

10) The UK and EU business grew by 21.5%, while the Nepal business was up 17%.

11) US business posted growth of 16%; Turkey business reported 14.6% growth; Egypt grew by 13%.

Management commentary

Dabur India CEO Mohit Malhotra said the overall operating environment remained challenging throughout the quarter with unprecedented inflation of 13% and subdued consumer sentiments. Dabur mitigated the impact of inflation partially through calibrated price increases and cost-saving initiatives, he said.

“Despite these macro-economic headwinds, we remained focused on rolling our consumer-centric innovation that expanded our total addressable market, besides gaining market share across 100% of our product portfolio, which is unprecedented. Our investments in distribution footprint expansion in rural India helped drive growth even in a challenging environment with rural demand for Dabur outpacing urban demand by 500bps,” Malhotra said.

He also said that there has been a marked revival in discretionary spending by consumers, which helped the home and personal care business grow by 8.4%.

“While our healthcare portfolio was impacted due to the high base of the previous year and a marked drop in demand for COVID-contextual products, this business reported a two-year CAGR of 11.4%,” he said.

“Excluding the COVID-contextual range of Chyawanprash and Honey, our domestic FMCG volume growth stood at 8% for the third quarter,” he added.