Dabur Ltd Shares Quarterly Results

For the Dec-21 quarter, Dabur Ltd reported 7.8% growth in sales at Rs.2,942 crore on a YoY basis. If you look at the key verticals of Dabur for the Q3, then the core consumer care business saw sales up 4.1% at Rs.2,543 crore for the Dec-21 quarter. On the other hand, the food business saw robust growth in sales of 39% at Rs.329 crore in Q3.

The consumer care business sales was tepid largely on account of weak rural sales, which has been the general trend in FMCG. The sales in the retail and miscellaneous business were higher but they were not significant in the overall scheme of things of Dabur.

Rural sales were weak but international business grew by 8.7% on a YoY basis during the quarter. On a sequential basis, the revenues were up by 4.41% compared to Sep-21 quarter.

Let us now turn to the operating performance. For Dec-21 quarter, the operating profits grew 9.14% at Rs.564.30 crore on a consolidated YoY basis. During the quarter, there was solid traction in the foods business of Dabur. The inflation impact was 13% during the quarter which more than offset most of the price hikes that Dabur managed.

The operating profits of the consumer care vertical was up just about 5% but in contrast the food business saw a doubling of operating profit on better cost management and higher yields on investment. Operating margins improved from 18.95% in Dec-20 quarter to 19.18% in the Dec-21 quarter despite the top line pressures and the cost implications. Operating margins were lower on a sequential basis by about 60 bps.

Net Profits for the Dec-21 quarter was up just 2.3% YoY at Rs.503.32 crore. Here is why the operating profit growth did not get transmitted. The improved operating performance got largely neutralized due to higher taxes in the quarter. This spike in taxes in the current quarter was a key reason why the net profit growth was so tepid.

PAT margins fell from 18.03% in the Dec-20 quarter to 17.11% in the Dec-21 quarter largely due to the higher tax effect on the profits of the company in the Q3. The PAT margins were also lower on a sequential basis by 79 bps.