Dabur Q3 Results: Profit, Revenue Rise Marginally

Dabur India Ltd.'s third-quarter profit rose marginally in line with analysts' estimates amid high food inflation and persistent slowdown in urban demand.

Net profit attributable to the shareholders of the ayurveda products maker rose 1.6% over the previous year to Rs 522 crore in the three months ended December, according to an exchange filing on Thursday. That compares with the Rs 509-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue rose 3.1% to Rs 3,355 crore, as against the projected Rs 3,339 crore.

• Operating profit increased 2.1% to Rs 682 crore, as compared with the Rs 677-crore forecast.

• Margin stood at 20.3% versus 20.5%, exactly in line with estimates.

• Domestic volumes grew 1.2%

• Advertising spends fell 7.3% to Rs 226.72 crore. This metric comprised 6.8% of sales.

Rural markets continued to grow ahead of urban for the fourth consecutive quarter, according to Chief Executive Officer Mohit Malhotra.

"Our rural distribution network expanded by 15,000 villages this fiscal and today reaches over 1,31,000 villages, making it among the highest in the industry. This extensive reach has given us a distinct advantage, allowing us to drive rural growth at a pace nearly 140 bps ahead of urban areas," Malhotra said.

He added that premiumisation as a strategy is paying off, with the premium portfolio growing 2.5–3 times faster than overall business.

• Home and personal care grew 6% to Rs 1,110 crore.

• Healthcare fell 1.6% to Rs 872 crore.

• Food, which accounts for 2.1% of business, grew 30% to Rs 48 crore.

• Beverage, comprising 11.3% of business, fell 10% to Rs 273 crore.

• Spices portfolio, which includes Badshah brand, grew 15% with double-digit volume growth.

Unfavourable weather conditions impacted the healthcare portfolio, while muted festive season demand and price-led competitive intensity from peer Reliance-owned Campa hit beverages segment.

Dabur has gained market share in 95% of the portfolio, led by a 150-basis points improvement in the hair oil category. Its hair oil market share now stands at 18%. The company also reported 101-basis-point gain in air freshener market share and 318 bps gain in juices and nectars.

Dabur's international business, which contributes 25% to sales, grew 19% in constant currency terms to Rs 847 crore, driven by Egypt (55%), Turkey (28%), Bangladesh (22%) and Middle East and North Africa region (17.5%).

Shares of Dabur closed 3% higher at Rs 533.70 apiece on the BSE after the results were declared, compared to a 0.30% advance in the benchmark Sensex.