Dabur Q1 Results Review - Growth Coming Back Gradually; Margin Normalisation To Take More Time: Systematix

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..Systematix Research Report.Dabur India Ltd.’s numbers were in-line with our expectations with revenue growth of 10.9% YoY, domestic volume growth of 3%, flat Ebitda margin at 19.3% and Adjusted profit after tax growth of 3.7% YoY. Key growth drivers were double-digit growth in healthcare and home and personal care business (unseasonal rains and high base impacted beverages) and 20.6% constant currency growth in international business, gross margin expansion led by softening of inflation and superior segment mix was invested in higher advertising and promotion spends. Key quarter takeaways are:Dabur's India revenue (72.8% of total sales) grew at 8%, with international revenue expanding at 20.6% CC,cross margin expansion of 74 bps YoY to 46.6% was led by lowering of raw material cost and lower beverage contribution, however consolidated Ebitda margin remained flat at 19.3%, led by higher ad spends, healthcare revenue grew 10% YoY with market share gains across sub categories,home and personal care revenue was up 11%, led by market share gains in home, oral, skin and hair care categories, food and beverage revenue remained flat for the quarter as beverages were impacted due to unseasonal rains in North and West, International business (~23.4% total sales) delivered 20.6% revenue growth in constant currency terms,strong rural recovery at 8% ahead of market growth of 4%. Both home and personal care and healthcare should grow close to double digits in FY24 with continued share gains, product innovation and expanding distribution reach. F&B should grow close to mid-single digit growth with aggressive portfolio expansion in both foods and beverages partially offset by muted peak season beverage sales. Stable currency and distribution restructuring in international markets should drive double-digit growth there as well. Dabur' margins should stay below 20% for FY24 as well despite a superior segment mix given high inflation in foods basket and expected pick up in advertising and promotion spends. We now build in marginally better growth and see 10.5%/16.9% revenue/profit after tax compound annual growth rate over FY23-25E, which is in-line with peers. We maintain our 'Hold' rating, with a revised target price of Rs 590 (earlier Rs 578), based on 45 times FY25E earnings..Click on the attachment to read the full report:.Dabur Q1 Results Review - Inline; Improving Narrative: Motilal Oswal.DISCLAIMERThis 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.

Dabur Q1 Results Review - Growth Coming Back Gradually; Margin Normalisation To Take More Time: Systematix

Double digit growth in healthcare and home and personal care; beverages impacted by unseasonal rains.

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