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Dolat Capital Report
Dabur India Ltd.'s Q4 FY23 results were broadly in line with our estimate. Domestic fmcg registered 1% volume growth and three-year revenue compound annual growth rate of 12.8%.
Growth in the domestic market was driven by strong growth in foods business but was restricted due to soft performance in personal care business. Foods business excluding Badshah Masala acquisition reported 22% growth during the quarter while beverages posted 29% jump.
Primary sales during the quarter were impacted by supply issues (at ~5%) due to unseasonal rains. However, the secondary sales remained at ~10%. This hints that the primary growth would normalise in the ensuing quarters.
Dabur recorded sales decline in health supplements, over-the-counter and ethical and skin business due to unfavorable base. Though the company reported flat growth in hair oil segment, the company gained 160 basis points market share.
We have lowered our earnings per share estimates for FY24/25E by 13.1/10.0% to factor in gross margin pressure. However, we maintain revenue estimates as we believe that the primary growth would improve here on.
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