Dabur India Ltd on Wednesday recorded its fiscal second quarter earnings with a profit decline of 17.7 per cent at Rs 417.52 crore in comparison to Rs 507.04 crore recorded during the corresponding quarter of FY24. It posted revenue from operations at Rs 3,028.59 crore, down 5.5 per cent as against Rs 3,203.84 crore during the same period of previous financial year. The company EBITDA stood at Rs 553 crore.
In a statement, the company said, “Despite a challenging demand environment marked by high food inflation and a resultant squeeze in urban demand, Dabur continued to drive consumer engagement across its key brands to end the second quarter of 2024-25 with a consoLidated revenue of Rs 3,029 crore.”
The company board also declared an interim dividend of 275 per cent for 2024- 25. “Continuing with our payout policy, the Board has declared an interim dividend of Rs 2.75 per share, aggregating to a total payout of Rs 487.39 crore,” said Mohit Mathotra, Chief Executive Officer, Dabur India.
The FMCG company said that it has continued to invest behind its brands, helping the India Business report market share gains across 95 per cent of the portfoLio. “We expect recovery in consumer demand in the coming quarters, both in urban and rural markets. We are focusing on strengthening our competitive edge in the marketplace by investing in scaling up our ruraI footprint and rolling out consumer-centric innovations. Our focused approach towards expanding our rural footprint to over 1.22 lakh villages reaped rich dividend as rural demand outpaced urban demand by 130 bps during the quarter,” said Mohit Mathotra. In order to cater to this wider network, Dabur has expanded its product basket with the launch of affordable and rural specific pack bundles across categories, while also investing in consumer activations in the hinterland to establish a better connect with its consumers
Dabur’s international business reported strong constant currency growth of 13 per cent during the second quarter. The Egypt business reported a near 73 per cent CC growth, while the MENA business grew by 10 per cent and Sub-Saharan Africa grew by 26 per cent. The Badshah business also reported a 15 per cent growth in Q2, it said.
Mohit Mathotra said, “Over the past couple of years, we have witnessed a marked shift in consumer buying patterns in favour of emerging channels like quick commerce, driven by the convenience this channel offers. This has resulted in the emerging channels growing at high teens, putting the General Trade under stress. To address the changing dynamics in the marketplace and support our distributor partners in tiding over the challenges, we took a proactive decision to rationalise inventory in the GeneraI Trade, which resulted in a temporary dip in sales during the quarter. However, the move has resulted in improving the long-term health and hygiene of our business, paving the way for healthy growth going forward.” This one-off adjustment notwithstanding, Dabur’s business fundamental, he added, remains strong with secondary sales for the second quarter growing at over 2 per cent and our 5-year revenue CAGR for the India business at over 8 per cent.
Acquisition announcement
Dabur India also announced that it has entered into an agreement to merge Sesa Care Private Limited (Sesa). As part of the transaction, Dabur said, it will acquire 51 per cent of the total paid up cumulative redeemable preference shares (CRPS) of Sesa from its existing shareholder, True North, for Rs 12.59 crore at face value. The enterprise value is estimated to be in the range of Rs 315-325 crore, including debt of Rs 289 crore, which will be backed by the Corporate Guarantee of Dabur.
From: financialexpress
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