Dabur Q2 Profit Declines 17%, Declares ₹2.75 Dividend

Dabur India Ltd announced its financial results for the quarter ended September 2024, reporting a net profit of ₹425 crore, a decline of 17% year-on-year. The company’s revenue also fell by 5% to ₹3,029 crore, aligning with market expectations. Dabur's consolidated revenue from operations stood at ₹3,028.59 crores during the quarter ended September from ₹3,203.84 crore in Q2FY24, a year-on-year fall of 5.5%. The business stated in an exchange filing that Dabur maintained excellent consumer connection with its major brands in spite of a challenging demand landscape marked by high food inflation and the ensuing strain on urban demand.

Quick Insights

• Revenue: ₹3,029 crore, down by 5% YoY.
• Net Profit: ₹425 crore, decreased by 17% compared to last year.
• Segment Performance: Domestic volume declined by 7.5%, less than expectations of 8-10%.
• Management's Take: "Despite challenges, we remain confident in our business fundamentals and long-term growth."
• Stock Reaction: Dabur shares price rose by 2% post quarter 2 results of the Dabur.

Management Commentary

Dabur's CEO, Mohit Malhotra, noted, "The shift towards quick commerce has impacted traditional sales, but our proactive inventory management has positioned us for future growth. We expect to build upon our marketing investments to enhance performance in the coming months."

“Dabur's lnternationaI Business reported strong constant currency growth of 13% during the second quarter. The Egypt business reported a near 73% CC growth, while MENA business grew by 10% and Sub-Saharan Africa grew by 26%. The Badshah business also reported a 15% growth in Q2,” added Malhotra.

For the fiscal year 2024–2025, the firm said that its board of directors had approved an interim dividend of ₹2.75 per equity share with a face value of ₹1/-each (or 275%) during a meeting. November 8, 2024 has been designated as the record date.

Stock Market Reaction

After the results announcement, Dabur's share price was trading 2% higher at ₹546.95 on the BSE. However, the stock is down over 2% year-to-date. 

About the Company and Upcoming News

Dabur India Ltd is a leading FMCG company focusing on natural and ayurvedic products. The company recently announced its acquisition of a 51% stake in Sesa Care for ₹315-325 crore, aiming to expand its presence in the ₹900 crore ayurvedic hair oil market. The merger is expected to complete within 15-18 months, subject to regulatory approvals.

The Ayurvedic personal care and wellness company Sesa Care will be acquired by domestic FMCG and Ayurvedic product manufacturer Dabur on Wednesday for an enterprise value of ₹315-325 crore. Dabur stated in a regulatory filing that this new acquisition will aid in the company's growth in the ₹900 crore ayurvedic hair oil industry. For ₹12 crores at face value, it has agreed to buy the majority 51% stake from its shareholder, True North, a private equity fund.