DABUR REPORTS Q4FY22 NUMBERS

News: Dabur witnessed a revenue growth of 7.7% to Rs2517.8 crore (Idirect estimate : Rs2528.8 crore) led by 7.6% growth in standalone business (domestic) & 8.2% growth in subsidiaries (international business). The quarter has seen a strong growth of 33.5% in foods & beverage business led by Juices (saw 35% growth). The company saw 610 bps increase in market share in Juices & Nectars. Despite high base of health-supplement (Chawayanprash, Honey), the category reported 9.7% sales growth. OTC & home care category saw growth of 17% & 11%, respectively. However, oral care, hair oils & shampoos witnessed muted 1.1%, 2.6% & 5.6% sales growth. Digestives also recorded dismal 1.1% sales growth. Skin & Saloons category saw de-growth of 10.6%. Gross margins contracted by 130 bps. Employee & marketing spends were down (% to sales) by 40 bps & 63 bps respectively. The reported net profit was down by 22% to Rs294.3 crore. The company proposed a final dividend of Rs2.7 /share & total dividend stands at Rs5.2 / share for FY22.

Views: The impact of commodity inflation is least for Dabur India given large part of raw material for the company is non-crude & non-palm commodities. However, overall consumer sentiments seems to be adversely impacted by steep inflation. The company has witnessed very strong growth in last two years despite covid-19 related disruption & steep increase in commodity prices. Dabur adopted a strategy for aggressive new product launches in last two years. Further, it has forayed into multiple new categories, which has propelled the growth for the company. We believe the company would continue to grow at a strong pace with huge opportunity size in newly ventured categories. Moreover, it is best placed to handle commodity inflation in medium term. We remain positive on the company on growth prospects & its ability to improve margins continuously. We will be coming out with a detailed update after the conference call with the management.

Impact: Positive