Chyawanprash-maker Dabur’s fourth quarter revenue takes a 12% hit⁠— the damage will be double in the next 3 months, warns management

Dabur Website
  • Dabur’s consolidated net profit was down about 24%, at ₹281.60 crore between January and March 2020.
  • The company’s total revenue was down 12.3% to ₹1,865.36 crore during Q4 compared to the same quarter last year.
  • The company’s share price dropped over a percent ahead of the earnings.
  • “The outbreak of Covid-19 pandemic is causing significant disturbance and slowdown of economic activities globally,” the company said.
Dabur, one of India’s largest fast-moving consumer goods (FMCG) companies, reported a drop of about 24% in its consolidated net profit, at ₹281.60 crore between January and March 2020 compared to the same quarter last year.

“Dabur 4QFY20 results were lower than ours, and consensus estimates primarily due to loss of sale (₹3.6bn) owing to supply chain disruption towards the mid-march which led to lower stocking up of summer portfolio (Glucose D, Pudin Hara, Juices, Health supplements) ahead of peak season,” said Phillip Capital, an equity research firm.

“The outbreak of Covid-19 pandemic is causing significant disturbance and slowdown of economic activities globally. The nationwide lockdown ordered by the Government of India has resulted in a significant reduction in economic activities and also the business operations of the company in terms of sales and production,” the company said in fourth-quarter earnings.

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Dabur’s revenue from operations was down 12.3% to ₹1,865.36 crore in Q4 compared to the same quarter last year.

Philip capital in its report said Dabur in the May month had seen 80-90% of consumer demand coming back to the levels which existed prior to the breakout of COVID-19. However, Dabur said it expects the impact of COVID-19 to continue in the coming quarter — forecast a dip in its operating revenue to be in the range of ₹400 to ₹450 crore. It also expects net profit to take a hit of ₹60 to ₹80 crore. That’s about a 25% fall compared to the latest quarterly revenue.

DaburQ4 Growth (YoY)
Revenue-12.30%
Profit-24%

“Impact on revenue from operations has been partially mitigated by higher focus on health and hygiene categories, the launch of new products, driving sales through new channels such as delivery platforms and e-commerce and aggressive monitoring of sales in GT channel,” said Dabur.
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The company’s share price dropped over a percent ahead of the earnings.
BI India

"Continuing with our Dividend Payout policy, the Board has proposed a dividend of ₹1.60 per share, aggregating to ₹282.74 crore," said Dabur India’s Chairman, Amit Burman.

Earlier, Dabur reportedly said it witnessed strong growth in enquiries and demand for Ayurvedic products across its portfolio, which includes Chyawanprash, a dietary supplement⁠— based on Ayurvedic texts ⁠— that has everything from sugar, honey, ghee, Indian Gooseberry (amla) jam, sesame oil, berries to various herbs and spices.during the lockdown.
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The coronavirus pandemic has brought a massive change in consumer lifestyles— which saw a large shift towards Ayurvedic medicines and products, according to Euromonitor International. A wave of Indian consumers who prefer tags like organic and ayurvedic products are sweeping products like the Chyawanprash off the shelves.

According to IMARC, India’s organic food market may grow at a compounded annual growth rate of 20% to $2.1 billion by 2024.

SEE ALSO: Dabur Chyawanprash was in the minds of immunity-seeking Indians amid COVID-19 lockdown⁠— the earnings will show if they bought enough of it
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