DABUR EXPECTED TO REPORT HIGH SINGLE DIGIT GROWTH

News: Dabur's India business has remained fairly resilient and is expected to report high single digit revenue growth on a base of 35.4% revenue growth in Q1FY22. Food & beverages vertical has seen strong double-digit growth in the quarter. Home and personal care portfolio is expected to record high single to low double-digit growth on a high base of 26.1 % growth in Q1FY22. Healthcare vertical is expected to report a decline over last year's high base as the business had registered growth of 30% in Q1FY22. International business is expected to register high single digit revenue growth during the quarter in constant currency and low single digit growth in rupee. Overall, the consolidated revenue is expected to grow at mid to high single digits. The company continues to gain market share in most of its segments. Operating margins have been impacted in the near term and are expected to be lower by ~200 bps compared to Q1FY22 but normalising to pre-Covid levels

Views: Sales continue to grow led by mid-single digit volume growth but operating profit and net profit are impacted due to consumption pressure seen in urban and rural markets on account of inflation. Growth in food & beverages segment is led by improving out of home consumption, innovation and the intense summer season. Healthcare division reported higher growth in the past quarter due to surge in the Delta variant of the Covid-19. Hence, revenue from the same is expected to decline in this quarter. Operating margins were also higher in the previous quarter due to the same reason. Revenue growth of the international business in rupee will be lower compared to constant currency basis due to devaluation of the Turkish Lira. Inflationary pressures resulting in higher input costs such as those of crude-led derivatives, vegetable oils, honey and other agri-based commodities continues to affect profit. Price increases and cost saving methods being implemented by the company may reduce this impact. The company's plan to continue investing in power brands, innovation, A&P and distribution expansion is expected to lead to sustainable growth

Impact: Positive