Informist, Wednesday, Jul. 30, 2025

By Rati Chaphekar

MUMBAI – Dabur India Ltd. is expected to report sluggish net profit and revenue growth on year as the fast moving consumer goods company's sales are expected to be dented by unseasonal rains and the short summer.

Dabur India is expected to make a consolidated net profit of INR 4.92 billion in the June quarter, down 1.6% on year but up 54% on quarter, according to the average of estimates from 15 brokerages. The highest estimate for the company's consolidated net profit is INR 5.16 billion by Elara Securities (India) Pvt. Ltd. and the lowest estimate is INR 4.63 billion by YES Securities (India) Ltd.

The company is expected to report a consolidated revenue of INR 34.16 billion in the reporting quarter, up 2% on year and up 21% on quarter, according to the average of estimates from 15 brokerages. The highest estimate for the company's consolidated revenue is INR 34.61 billion by Nirmal Bang Equities Pvt. Ltd. and the lowest estimate is INR 33.68 billion by Kotak Institutional Equities.

The company's domestic volume of sales is expected to fall 3% on year in the June quarter, Yes Securities Ltd. said. Summer-driven category products such as beverages, glucose, ice-cream, talcum powder and cooling hair-oil will most likely report weaker sales, especially in May, compared with initial expectations due to unseasonal rains and a short summer.

"Out-of-home consumption tends to suffer when there are rain spells at the peak of summer. So, categories that ride the summer season, including beverages, ice creams and talcum powder, will take a hit. We do not expect the June quarter to be strong from a beverages, glucose and cooling hair oil sales perspective due to the unseasonal rains," Nuvama said citing company's chief executive officer.

The home and personal care division of the company is expected to perform well driven by oral, home and skin care categories in the reporting quarter. The company is expected to report a 5% on-year growth in the oral care segment mainly driven by high rural demand, which will help the company's vertical outperform Colgate, according to Nuvama. The healthcare segment is expected to post a double-digit growth led by nearly 40% growth in Dabur Honitus, Nirmal Bang said. Apart from Dabur Honitus, other brands such as Dabur Honey, Hajmola, and Dabur Health Juices are expected to post robust growth.

The company's international business is expected to post double-digit growth in sales in constant currency terms. However, this growth will be lower in rupee terms due to the negative impact from currency movement, according to Nuvama. The company is expected to report a gross margin of 47%, down 80 bps on year, according to YES Securities.

Dabur's consolidated earnings before interest, tax, depreciation, and amortisation are estimated at INR 6.50 billion, down 17.2% on year but up 14.4% on quarter, according to an average of estimates from 14 brokerages tracking the firm. The highest estimate for the company's EBITDA is INR 6.71 billion from Nirmal Bang and the lowest estimate is INR 6.16 billion from Emkay Global Financial Services Ltd.

The company's EBITDA margins are expected to fall due to lower sales, higher overhead spending, and raw material cost inflation. Higher raw material prices are expected to put pressure on margins which would lead to flat EBIDTA growth on year, Nomura said. Kotak expects the EBITDA margins to contract 125 bps to 18.3% as lower spending on advertising and promotion by the company will likely offset lower gross margins. Emkay expects the company's EBITDA to decline 6% due to weak sales which will lead to negative operating leverage. The company will report its June quarter earnings on Thursday.

Inflation for commodities such as tea, coffee and palm oil, which was high for the past few quarters, has started to ease. The impact of the fall in inflation is expected to be seen in the next quarter by most FMCG companies such as Dabur, which are still relying on high-cost inventories, Motilal Oswal said.

Key metrics to be monitored are commentary on demand trends in categories and recovery in the food and beverages segment, Systematix said.

On Wednesday, shares of Dabur India closed 0.7% higher at INR 522 on the National Stock Exchange. The stock has risen 11.4% since the company had announced its March quarter earnings. Of the 20 research reports on the company available with Informist, 12 have a 'buy' recommendation with an average target price of INR 593. Five brokerages have a 'hold' recommendation and three brokerages have a 'sell' recommendation.

Following are the June quarter earnings estimates for Dabur India based on reports from 15 brokerages in descending order of estimate of net profit:

IST, or Indian Standard Time is five and a half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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