July 30: Dabur’s consolidated revenue and EBITDA for 1QFY27 grew 11percentage year-on-year to Rs 37.6 billion and Rs 7.4 billion, respectively, supported by 5percentage India FMCG volume growth and healthy pricing. Gross margins expanded 32 basis points YoY to 47.3percentage.
Domestic growth was led by Hair Care and Oral Care, while the Food & Beverages business recovered through May-June following weather-related disruptions in April and early May. Healthcare remained relatively subdued. International revenue grew approximately 16percentage in INR terms despite geopolitical challenges in the Middle East.
With input cost inflation elevated at approximately 8percentage, management expects calibrated pricing, premiumisation and productivity initiatives to support profitability. Value growth is likely to outpace volumes in the near term.
Despite the correction in the stock price, the inflationary cost environment is expected to keep margins under check. Accordingly, the ADD rating is maintained with a September 2027 target price of Rs 474.
Domestic Momentum Steady; International Business Resilient
Consolidated revenue grew 11% YoY to Rs 37.6 billion, driven by 10% growth in India FMCG and 5% volume growth, reflecting steady consumer demand despite inflation and adverse weather conditions. Rural demand continued to outpace urban markets.
Hair Care led domestic growth on strong momentum in hair oils and shampoos, while Oral Care continued to outperform the category with market-share gains across flagship brands.
Unseasonal rainfall affected beverages and glucose products early in the quarter, but demand recovered meaningfully in May-June, supporting sequential improvement. International revenue grew 16% in INR terms despite supply-chain and geopolitical challenges.
Management expects growth to accelerate, aided by pricing, innovation, go-to-market transformation and sustained brand investments.
Margin Protection in Focus
Consolidated gross margins expanded 32 basis points YoY to 47.3%, supported by pricing, product mix and cost efficiencies. EBITDA margins remained broadly stable at 19.7%, as inflation in crude-linked inputs and packaging necessitated higher operating investments.
Management indicated that input inflation remained elevated at approximately 8% in 1QFY27, with further calibrated pricing likely if pressures persist.
Dabur remains focused on protecting profitability while reinvesting productivity gains in brand building, innovation and media to sustain market-share gains and support long-term category growth.
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Dabur’s operating momentum continues to strengthen, supported by Hair Care, Oral Care and Foods, an improving mix, resilient rural demand and market-share gains. Near-term volume growth could remain moderated by inflation-led pricing, but the company’s diversified portfolio, strong brand franchise, healthy cash generation and disciplined capital allocation support a positive view.
Following the recent correction, the risk-reward has turned favourable despite a lower target multiple of 36x.