Healthcare and rural recovery to boost Dabur’s immunity in the second quarter
- According to various analysts reports, Dabur is estimated to see revenue growth of nearly 8.4% and profit growth of 14.7% in the second quarter.
- Dabur’s share price has gained over 9% since the beginning of the quarter.
- Brokerages highlighted that low commodity prices have led to significant margin visibility for Dabur.
According to various analysts reports, Dabur is projected to see revenue growth of nearly 8.4% and profit growth of 14.7%.
Q2 earnings estimates
|Brokerages on Dabur||Expected Revenue Growth||Expected Net Profit Growth|
Personal care products led the recovery; demand for immunity products has not moderated yet
AdvertisementWhile immunity-boosting products like Glucose and Chyawanprash have shined in Dabur’s portfolio in the past nine months, the demand for those has not moderated yet. The healthcare segment plays an essential role in Dabur’s portfolio — as nearly 38% of its total sales come from its health care portfolio. With the increasing consumer preference for health supplements, Ventura believes that Dabur is poised to grow further.
The company also saw a high demand for its hair oil and personal care products, which largely remained muted during the lockdown and the early phases of unlocking, according to B&K Securities. Ventura's report dated September 21 also highlighted that the “essential categories like oral care, health care, and other essentials witnessed a V shape recovery.”
Great margin visibility led by robust volume growth
Brokerages have also highlighted that there is significant margin visibility for Dabur led by the low commodity prices, along with the high-margin healthcare products. The company took some price hikes to offset the inflation in agriculture-based commodities.
According to IIFL Securities, Dabur is slated to see over 5% sales and volume growth in the quarter.
Rural market resilience
In the first quarter, nearly 48% of revenue contribution for Dabur came from rural sales. According to Axis, with rural growth ahead of urban areas, Dabur could be a huge beneficiary of this improving demand trend. Various factors, such as better than expected monsoon, government support through increased allocation to MGNREGA will play its part in Dabur’s second quarter earnings.
Not only brokerages but investors too have been betting big on Dabur on the back of ‘recovery play.’ Its shares recently hit a new high of ₹528 on NSE. Dabur has gained over 9% since the beginning of the quarter.
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