Shares of Dabur India dropped as much as 4% on May 8 as the company’s subdued earnings performance in the March quarter failed to impress investors.
The company’s consolidated net profit for the quarter gone by fell over 8% to Rs 320.13 crore, down from Rs 349.53 crore in the year-ago period. On the other hand, topline growth also remained sluggish at less than 1% to Rs 2,830 crore, as against Rs 2,814.60 crore in the same quarter last fiscal.
The homegrown consumer major struggled with sluggish urban demand in the March quarter, a persisting trend that has been affecting FMCG companies in the recent times, putting pressure on their earnings and profitability.
Likewise, EBITDA margins for Dabur India also eroded to 15.1% in Q4, down from 16.6% in the year-ago period. Looking ahead though, Dabur is targeting a double-digit CAGR in both its top line and bottom line by FY28.
For FY26, it anticipates volume and value growth in the high single-digit to near double-digit range. Within its Foods and Beverage portfolio, the company expects growth to remain in the low-to-mid-single digit range. Now while analysts at HDFC Securities took note of the management’s aspirations for FY26 and ahead, they feel that meeting the guidance will require the support of favourable weather conditions and a normal monsoon.
Meanwhile, bogged down by the muted Q4 earnings, brokerages were quick to trim their earnings estimates for Dabur. Brokerage firm Nuvama Institutional Equities cut its FY26/FY27 earnings-per-stock (EPS) estimates for the stock by 4.8% and 3%, respectively, to factor in the sluggish urban demand and consecutive underperformance by the HPC category due to higher base effect.
In addition to that, Nuvama also cut its price target for the stock marginally to Rs 615, but retained its ‘buy’ rating on Dabur.
