Dabur India (Dabur) share price slipped 8 per cent to Rs 571.25 per share, hitting a four-month low on the BSE in Thursday’s intraday trade, after the management said it expects consolidated revenue to decline in mid-single digits in July to September quarter (Q2FY25) as heavy rain and floods across the parts of the country impacted out of home consumption and consumer offtake.
The personal care products company posted over 7 per cent year-on-year (Y-o-Y) growth in Q2FY24 and in Q1FY25. On account of lower primary revenue and high advertisement & promotion (A&P), however, the management expects operating profit to decline in mid to high teens Y-o-Y in Q2FY25.
The stock is trading at its lowest level since June 4, 2024. At 09:37 AM, Dabur was quoting 5.5 per cent lower at Rs 584.60 as compared to 0.70 per cent decline in the BSE Sensex. Average trading volume on the counter jumped over two-fold with a combined 5.6 million shares changing hands on the NSE and the BSE till the time of filing of this report.
In Dabur India’s Q2FY25 business update, the company said Dabur India has experienced disproportionately higher growth in modern trade (MT), E-commerce, and Quick Commerce during the last few quarters, which led to high inventory levels for its general trade (GT) channel and affected distributor return on investment (ROI).
This has prompted the company to make a strategic decision of correcting distributor inventory at the GT level to improve its ROI. This is expected to impact the temporary decline in revenue.
“While demand trends were witnessing some improvement, heavy rain and floods across parts of the country impacted out-of-home consumption and consumer offtake in Q2FY25. Due to this, we saw some impact on our business especially in the beverage category,” the company said.
While this correction has happened in the India business, the international business is expected to register “double-digit constant currency growth in topline”, the company said. ‘Badshah Masala’ business continued to perform well, growing in double digits during the quarter, it added.
Meanwhile, with the streamlining of the GT channel and strong growth momentum in alternate channels, the management expects revenue growth to recover starting from October 2024.
On a separate note, Dabur’s Dow Jones Sustainability Index (DJSI) score has seen a remarkable improvement, rising from 72 to 81. Over the past two years, there was 170 per cent improvement in the score. This significant progress highlights the company’s steadfast commitment to sustainability and responsible governance, Motilal Oswal Financial Services said in company update.
Dabur, a leading Indian fast moving consumer goods (FMCG) company, is a global leader in ayurveda with a portfolio of over 250 herbal/ ayurvedic products. The company provides health supplements, digestives, shampoos, hair oils, skin care, oral care, foods and other OTC and ethical products.
The meeting of the board of directors of Dabur is scheduled on October 30, 2024 to consider and approve the unaudited financial results for the quarter/half year ending on 30th September 2024 and to consider declaration of interim dividend on the equity shares of the company for the financial year 2024-25.
First Published: Oct 03 2024 | 10:45 AM IST
