Dabur India Q3 Results Review - Multiple Headwinds Led To A Subdued Quarter: ICICI Securities

ICICI Securities Report

Dabur India Ltd.’s revenue print (up 3% YoY India, up 9.5% on three-year compound annual growth rate basis) was impacted due to-

1. healthcare segment lapping on a high base of Covid,

2. downtrading in rural and late onset of winter impacting home and personal care segment and

3. early festive season (shift of inventory loading to Q2 FY23) impacting beverages revenue.

That said, management highlighted early signs of recovery in rural. Further, healthcare business trajectory is likely to improve with high base of Covid mostly over. New product developments are likely to drive growth in foods and beverages segments.

Gross margins were flattish QoQ as input cost inflation has moderated. However, management highlighted there is a shift in inflation with raw material basket from crude linked products to herbs.

Operating margins were also maintained at 20% (flattish QoQ) by reducing ad-spends significantly (down 24% YoY). Dabur has guided to maintain operating margins in similar range through managing ad-spends if input cost inflation continues.

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