Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dabur India Ltd (BOM:500096, Financial) reported strong growth in its international business, with a 13% increase in constant currency terms.
- The company gained market share across 95% of its portfolio, indicating strong brand performance.
- Dabur's home and personal care segment grew by 6%, and healthcare by 4%, showing resilience in key categories.
- The proposed merger with Sesa Care Private Limited is expected to enhance Dabur's presence in the premium ayurvedic hair oil segment, offering substantial revenue and cost synergies.
- Dabur's Dow Jones Sustainability Index score improved by 170% over two years, reflecting its commitment to sustainability and responsible governance.
Negative Points
- Dabur India Ltd (BOM:500096) experienced a 5.5% decline in consolidated revenue due to inventory rationalization efforts.
- The company's operating profit decreased by 16.4% due to revenue decline and increased advertising and promotion expenses.
- Urban consumption slowed down, particularly affecting the beverage category, due to heavy monsoons and high food inflation.
- Competitive intensity in the oral care segment increased, impacting Dabur's growth compared to market leaders.
- The juices and nectars category faced a high single-digit decline, exacerbated by aggressive monsoons and competitive pricing pressures from carbonated drinks.
Q & A Highlights
Q: How does Dabur's growth in the oral care category compare to competitors, and what are the future plans for this segment?
A: Mohit Malhotra, CEO, stated that Dabur has grown ahead of the category at 5% value and gained market share in Dabur Red. The company is focusing on expanding its oral care portfolio internationally, particularly in markets like Egypt and MENA, where they have become a leading brand. Despite increased competitive intensity in India, Dabur is matching competitors in trade and visibility.
Q: What impact has the introduction of Campa Cola had on Dabur's fruit juice segment, and how is the company responding?
A: Mohit Malhotra explained that while the competitive intensity from Campa Cola has affected the price index, Dabur is introducing new price points and enhancing value propositions to consumers. The company is also expanding its drinks portfolio to include more affordable options to compete with carbonated drinks.
Q: Is the inventory correction in the general trade (GT) channel complete, and what growth is expected in the second half of the fiscal year?
A: Mohit Malhotra confirmed that the inventory correction is complete, and the company expects to return to normal growth rates of mid- to high single digits in the second half, assuming favorable conditions.
Q: Can you provide insights into the strategic rationale and expected synergies from the Sesa acquisition?
A: Ankush Jain, CFO, highlighted that the Sesa acquisition will enhance Dabur's premium hair oil portfolio, offering significant revenue and cost synergies. The acquisition is expected to be EPS accretive in the long term, with operating margins reaching 18-19% post-synergies.
Q: How is Dabur addressing the challenges posed by quick commerce and e-commerce on traditional distribution channels?
A: Mohit Malhotra noted that Dabur is strengthening relationships with quick commerce and e-commerce players through joint business planning and customized product offerings. The company is also exploring digital solutions to improve supply chain efficiency and reduce reliance on traditional distributors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
