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Centrum Broking Report
Dabur India Ltd.'s Q4 FY22 print was in-line with our estimates. Despite high base consolidated revenue/Ebitda/adjusted profit after tax grew 7.7%/2.5%/0.9%, while two-year compound annual growth rate was 16.2%/13.5%/13.4%.
India fast moving consumer goods business surged 7.6%, led by 2% volume growth. International business (27.5% of sales) grew 10.7% (constant currency).
Bearing in mind high base (up 25.3%), unsettled execution coupled with efforts on new product development led Dabur to continue its reasonable performance. Driven by rural distribution efforts and its power brand strategy.
Gross margin cut by 130 basis points to 47.4% owing to 12.5% cost inflation.
Other expenses/employee cost grew 13.7%/4.0%, and cut in ad-spend by 2.5% resulted in muted Ebitda growth of 2.5%; Ebitda margin at 18.0% (down 92 bps).
We remain hopeful on growth prospects, driven by distribution excellence, covering 90,000 villages and touching 1.3 million outlets directly.
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