Dabur Q2 update | Consolidated revenue to grow in the mid-single digits, operating profit in-line with estimate

Dabur India Ltd. on Monday, October 7, said its sales have moderated in September and the second quarter on the back of the GST reforms, which led to customers deferring their purchases to benefit from lower MRPs. 

The company said trade witnessed a temporary disruption due to the same. Distributors and retailers also focused on liquidating the existing higher-priced inventory, it added.

However, it said its key categories such as oral care, juices, hair oils, shampoo, digestive, OTC, branded ethicalsand

culinary, which represent around 60% of its India business, would benefit from 12% and 18% GST rate cut to 5%. It said, post the GST reforms, 85% of its portfolio is at a GST rate of 5%, which is a key positive.

The management still called the tax reform "a landmark step" that will ensure affordability and enhance purchasing power which will boost consumption in both urban and rural markets. 

"Retail offtakes continued to be resilient, enabling us to sustain market share gains in 90%+ of our portfolio," the company said.

 Non-GST impacted brands like Dabur Honey, Anmol Coconut Oil, Gulabari and Hajmola Zeera have performed well, it said.

For the quarter ended September 30, the company expects double-digit growth in oral care products such as Red Toothpaste and Meswak.

Its skincare portfolio is expected to grow in high-single digits led by Gulabari and Oxy franchise, while in its hair care portfolio, Dabur expects Shampoos to register high single-digit growth led by Vatika and hair oils is estimated to report mid single-digit growth, Within home care, Odonil has performed well, it said.

In healthcare, key brands such as Dabur Honey, Honitus, Hajmola franchise and health juices are likely to register double-digit growth, underpinned by strong volumes, the company said.

Within the F&B category, the culinary business is set to record double-digit growth with strong performance in oils and fats. In beverages,

In beverages, its 'Activ' range is yielding positive results as it is expected to report 30% growth led by both, Activ juices and coconut water. However, the higher-than-expected rainfall and floods in July and August impacted its overall beverage portfolio, it said.

Dabur is expecting its e-commerce channel to grow in double digits in the second quarter.

In its international business, MENA, Turkey, and Bangladesh are expected to perform well, Dabur said, adding that the Nepal business was adversely impacted due to pollical unrest. Dabur also expects its overall international business to post mid-single digit growth in INR and CC terms.

Dabur sees consolidated revenue growing in the mid-single digits and operating profit growing almost in-line with revenue in the second quarter.

Dabur shares were trading flat at 492.95 apiece around 3 pm.