Dabur India shares have projected a weak Q2 results outlook, leading to an 8% drop in its stock price, which touched a four-month low at ₹571.25 on the BSE during Thursday’s intraday trade. The management anticipates a mid-single-digit decline in consolidated revenue for Q2FY25, citing disruptions from heavy rains and floods affecting out-of-home consumption and consumer offtake.
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Despite posting over 7% YoY growth in Q2FY24 and Q1FY25, the company’s operating profit is expected to decline in the mid to high teens YoY for Q2FY25, mainly due to lower primary revenue and elevated advertising and promotion (A&P) costs. At 09:37 AM, Dabur was trading at ₹584.60, down 5.5%, in contrast to a 0.70% dip in the BSE Sensex. The trading volume surged more than twofold, with a total of 5.6 million shares exchanged on NSE and BSE by the time of reporting.
Dabur’s Q2FY25 business update revealed higher growth in modern trade (MT), E-commerce, and Quick Commerce in recent quarters, which led to increased inventory levels in the general trade (GT) channel and impacted distributor return on investment (ROI). Consequently, the company has decided to correct distributor inventory at the GT level, which is expected to temporarily reduce revenue.
The company noted that while demand had been improving, heavy rainfall and floods in some regions affected consumer offtake and particularly impacted the beverage segment. However, with inventory streamlining in GT and strong growth in alternative channels, Dabur expects revenue growth to rebound starting October 2024.
On a positive note, Dabur’s Dow Jones Sustainability Index (DJSI) score improved significantly from 72 to 81, marking a 170% improvement over the last two years, which highlights its commitment to sustainability and responsible governance.
Dabur, a prominent FMCG company in India and a leader in ayurveda, offers a wide range of products including health supplements, digestives, personal care, and food items. The board meeting is scheduled on October 30, 2024, to approve the unaudited financial results for Q2FY25 and consider the declaration of an interim dividend for the financial year 2024-25.
