DABUR Q3 2024-2025 Call Highlights: Oral Care Boom, Beverages Challenge & McKinsey’s Strategy!

Dabur India Ltd., a leading Indian multinational consumer goods company known for its Ayurvedic and natural health and personal care products, in its Q3 earnings call discussed the company’s strategic approach amid challenging market conditions, with a focus on navigating seasonal challenges in the Healthcare portfolio while leveraging strong growth in segments like Oral Care. The company mentioned it is actively addressing competitive pressures in the Beverages segment through strategic initiatives and collaborating with McKinsey to refine its business strategy. Management emphasized the company’s plans to drive growth through premiumization, mix optimization, and targeted investments in high-potential categories like Oral Care and Healthcare. The company remains cautiously optimistic, expecting mid-single-digit growth and planning to mitigate inflationary pressures through selective pricing and cost-saving measures.

Dabur India reported its Q3 financial results with a 2% year-on-year profit increase and a 3.1% revenue growth, meeting market expectations. The company expressed optimism about its future, targeting mid to high single-digit growth in fiscal year 2026 and highlighting that urban markets have bottomed out. The company’s performance was characterized by a 1.2% domestic volume growth, with standout segments including Home and Personal Care and Badshah business. The company’s total expenses rose by 3.9% to INR2,826.20 crore, reflecting marginal operational expansion.

Continue Reading: Discover the Vital Insights from Dabur India Ltd.’s Earnings Call!

Financial/Operational Metrics:

• Total Revenue: INR3,483.28 crores, up 3% YoY.
• Net Profit: INR515.82 crores, up 2% YoY.
• Basic EPS: INR2.95, up 2% YoY.
• Operating Margin: 20.32%.
• Advertising & Publicity Expense: INR226.72 crore, down 7% YoY.

Outlook:

• Short-Term Focus: Expansion in the consumer care segment and cost optimization.
• Strategic Focus: Continued investment in brands, innovation, and operational efficiency to drive profitable growth.

 Analyst Crossfire:

• Health Supplements Post-COVID & Oral Care Market Trends (Mihir Shah – Nomura)? The health supplement category, particularly Chyawanprash, has stagnated due to post-COVID effects. Efforts are underway to introduce modern formats like tablets and capsules, target group expansions, and repositioning Chyawanprash as an all-weather product to revive growth. Dabur has seen high single-digit growth in oral care due to increased herbal category saliency and new product introductions like gels. The company plans further expansion into sensitive and whitening segments, enhancing their market position, and has gained market share in modern trade (Mohit Malhotra – CEO).

 

• McKinsey Engagement & Pricing Strategy in FY ’26 (Abneesh Roy – Nuvama)? McKinsey’s role is to validate and refine Dabur’s strategic vision, focusing particularly on challenged categories like beverages and Chyawanprash. There’s no current linkage of their payment to target achievements, but it’s under consideration. Dabur anticipates inflation-driven price increases across categories including oral care and juices. For juices, they plan consumer offers to reduce effective prices and introduce economical ranges to compete with Cola brands (Mohit Malhotra – CEO).

 

• Beverage Market Challenges & Growth Projections (Percy Panthaki – IIFL Securities)? The beverage segment, particularly the Nectar portfolio, is impacted by seasonality, urban market conditions, and competition from Cola brands. Dabur is strategizing with communication revamps, value offerings, and distributor support to regain market traction. Excluding beverages, Dabur expects mid to high single-digit growth in Q4, factoring in seasonal corrections and inflation management through pricing adjustments and cost efficiencies (Mohit Malhotra – CEO).

 

• Margin Profile and Inflation & Namaste Litigation Costs (Avi Mehta – Macquarie)? Despite rising inflation, Dabur plans to maintain current margins in the second half, with expectations to improve margins in FY ’26 through price increases, mix changes, premiumization, and cost-saving initiatives. Legal costs related to Namaste have decreased from INR 100 crores to INR 75 crores, improving the profitability of the international business due to reduced litigation expenses and better currency dynamics (Mohit Malhotra – CEO).

 

• Rural vs. Urban Growth & Advertising Spend Strategy (Disha Giria – Ashika Institutional Desk, Harit Kapoor – Investec)? Rural markets are outperforming urban by 490 basis points according to syndicated data, with Dabur’s rural business growing by 2% compared to 0.6% in urban areas. Advertising expenditure has decreased in line with market conditions where consumer growth is not strong, shifting focus towards Below The Line (BTL) activities to gain market share (Mohit Malhotra – CEO).

 

• Volume Growth and Market Dynamics (Latika Chopra – J.P. Morgan)? The 1.2% domestic volume growth was not influenced by channel corrections but reflects the market’s underlying performance. Future growth is expected to be mid-single digit in value, influenced by both volume and pricing strategies amidst competitive market conditions (Mohit Malhotra – CEO).

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