BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Weak rural demand and delayed winter led to 3% volume decline for Dabur India Ltd. in 3QFY23. Management indicated that rural demand started exhibiting green shoots towards the end of Q3 FY23 and the outlook is getting gradually better.
Dabur's Q3 FY23 consolidated sales remained flat YoY at Rs 30.4 billion (our estimate: Rs 32.1 billion). Ebitda/profit before tax remained flat YoY at Rs 6.1 billion/Rs 6.2 billion while adjusted profit after tax declined 5.3% YoY to Rs 4.8 billion (our estimate: Rs 6.5 billion/Rs 6.8 billion/Rs 5.3 billion), respectively.
The company likely posted 3% volume decline YoY in Q3 FY23 (our estimate: up 3%). Gross margin contracted 280 bps YoY to 45.5% (estimate: 46.5%).
As a percentage of sales, lower ad-spends, stable staff cost and other expenses restricted Ebitda margin contraction to 130 bps at 20.0% (estimate: 20.3%) during the quarter.
Dabur's Q3 FY23 standalone sales grew 3.3% YoY to Rs 23.0 billion. Ebitda/ adjusted profit remained flat YoY at Rs 5.0 billion/Rs 3.9 billion, respectively. Ebitda margins remained flat YoY at 21.6%.
We have also baked in financials of the recently acquired ‘Badshah' brand from Q4 FY23 onwards.
Despite near-term challenges, Dabur (with nearly half of its domestic sales coming from rural) remains a good play on the incipient but gradual rural demand recovery theme.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
