Dabur India Q4 Results: Revenue Rises, Higher Costs Hurt Margin

Dabur India Ltd.'s quarterly revenue rose in line with estimates, but the pace of growth was tepid on persisting subdued consumption.

Consolidated revenue of the Ayurveda products maker increased 6% over the previous year to Rs 2,677.8 crore during the January-March period, according to its filing with the bourses. That compares with the Rs 2,708.9-crore consensus estimate of analysts tracked by Bloomberg.

Dabur India Q4 FY23 Highlights (YoY)

• Net profit attributable to shareholders rose 2.2% to Rs 300.83 crore, against an estimate of Rs 377.69 crore.

• Operating profit fell 10% to Rs 409.84 crore due to higher expenses, as compared with the Rs 466.5-crore forecast.

• Total expenses stood at Rs 2,402 crore, up 12%.

• Depreciation and amortisation expenses were higher in the quarter due to the inclusion of Badshah Masala.

• Margin came in at 15.3% against 18%. Analysts had projected it at 17.2%.

• Dabur's international business reported a growth of 9.6% in constant currency terms and 1.4% in rupee terms.

• Domestic volume growth came in at just about 1%.

For the full fiscal, the company saw 5.9% rise in revenue to Rs 11,529.89 crore. Net profit, however, fell 1.84% to Rs 1,707.15 crore during the year.

"In an environment where high Inflation continued to impact consumption, we are happy to have progressed well with broad-based growth in our key categories and report market share gains across our product portfolio," said Dabur India Ltd.'s Chief Executive Officer Mohit Malhotra.

During the year ended March 2023, the company raised prices to the tune of 6% in a bid to partly mitigate the impact of high inflation. Dabur also offered promotions to soften the impact of price hikes on consumption.

The discounts, coupled with a 11.4% increase in material inflation, ate into the company's fourth-quarter margins.

Malhotra expects concerns around inflation to remain in the near term, implying delay in margin recovery. But despite that, the company plans to accelerate the growth momentum by continuing to invest in brand building, innovation, and capabilities that will drive future growth, he said.

Category-wise Performance:

• Homecare business ended the quarter with 10.3% growth.

• Oral care business shrank 3% in Q4. But the company has now become the second largest player in the segment, with 15.8% market share.

• Hair oils posted flat growth, while shampoos portfolio grew 2%.

• Skin care, excluding sanitisers, declined 2%.

• Health supplements and OTC & Ethicals continued to see a decline of 3.3% and 0.4%, respectively.

• Foods category grew 20%, while beverages saw growth of 29%.

Among consumer goods makers, that have announced March quarter results so far, Hindustan Unilever Ltd. has posted an increase in profit even as higher costs continued to weigh on its margin.

Adani Wilmar's earnings more than halved on lower edible oil prices, while Nestle India posted a 25% increase, primarily driven by price hikes. The maker of Maggi and Kitkat chocolates' margins, however, took a beating due to inflation.

The company also declared a dividend of Rs 2.70 a share.

Shares of Dabur fell 1.4% after the results were declared, as compared with a 0.92% gain in the benchmark Nifty 50.