Dabur India Ltd’s shares demonstrated resilience despite a significant 17% year-on-year decline in net profit for Q2 FY25, which dropped to ₹425 crore from ₹515 crore in the same period last year. The company’s revenue also fell by 5%, amounting to ₹3,029 crore compared to ₹3,204 crore in Q2 FY24. On the BSE, the stock traded at ₹546.95 per share, reflecting an intraday gain of 2.07%.
In addition to its earnings report, Dabur declared an interim dividend of ₹2.75 per share (275%) for FY 2024-25. CEO Mohit Malhotra acknowledged the challenging demand landscape, particularly due to high food inflation affecting urban consumption. In response to changing consumer preferences, Dabur has focused on enhancing customer engagement with its key brands while rationalizing inventory in the General Trade segment. This strategy led to a temporary dip in sales but is anticipated to improve the long-term health of the business.
Key Highlights:
- 52-week high: ₹672.00 (on September 17, 2024)
- 52-week low: ₹489.00 (on April 16, 2024)
- Market capitalization: ₹96,936.57 crore
- Recent stock performance: Down 13% over the past three months, with a 4% increase in the last year, a 6% decline over three years, and an 18% rise in five years.
In terms of institutional ownership, foreign institutional investors (FIIs) slightly reduced their stake from 15.82% to 14.99% as of the June 2024 quarter, while mutual funds increased their holdings from 5.98% to 6.25%.
Analysts have varying outlooks for Dabur. Citi has issued a “sell” recommendation with a revised target price of ₹570, citing a reduction in earnings estimates, while Macquarie maintains a neutral rating with a target price of ₹560. They expect sales growth to recover from October but are concerned about sluggish demand momentum.
Overall, while Dabur faces challenges in the current market, the company is proactively adapting its strategy to align with shifting consumer preferences, which could pave the way for healthier growth in the future.
Disclaimer: The information provided herein is for informational purposes only and should not be construed as financial advice. Please consult a certified financial advisor or conduct your own research before making investment decisions. The author and the respective brokerage houses are not liable for any losses incurred as a result of actions taken based on this information.
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