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In-line revenue; beat in profitability

DABUR released its business update for 2QFY27. Here are the key highlights:

Demand trends

* Demand remained steady despite geopolitical tensions in the Middle East, elevated commodity inflation and deficit rainfall.

* Management remains optimistic about further improvement in consumption, supported by the upcoming festive season.

* Rural demand continued to outpace urban demand, supported by continued efforts under Project Saksham.

* Emerging channels such as E-commerce and Quick Commerce are expected to maintain strong growth momentum.

India business performance

* India FMCG business is expected to deliver double-digit growth (est. 13% in 2QFY27, 9% in 1QFY27), marking its strongest performance in recent quarters.

* HPC is expected to post double-digit growth, while Healthcare is likely to grow in mid-single digits.

* Food & Beverages is expected to deliver mid-teen growth.

* Modern Trade continued to grow in double digits, while General Trade remained healthy across both rural and urban markets

Segmental performance

** Home & Personal Care (HPC)

* Hair Oils & Shampoos: high-teen growth, led by strong performance across perfumed and coconut hair oils; fourth consecutive quarter of double-digit growth.

* Oral Care: mid-single-digit growth on a high base, supported by brand investments and franchise strength.

* Home Care: high-single-digit growth.

* Skin Care: double-digit growth, supported by strong brand equity.

** Healthcare

* OTC & Ethicals: early-teen growth, reflecting sequential recovery.

* Digestives: high-teen growth, maintaining strong momentum.

* Health Supplements: Performance impacted temporarily by the transition to refreshed packaging and labels.

** Foods and Beverages

* Foods: Strong double-digit growth expected.

* Beverages: early-teen growth, supported by wider offerings across formats/price points and favorable seasonality.

* International business

* International business expected to deliver high-teen growth in INR terms (est. 12% in 2QFY27, 16% in 1QFY27) despite severe headwinds in the Middle East.

* Egypt, Turkey, USA, Bangladesh and the UK are expected to report strong double-digit growth in INR terms.

* Key brands continued to witness robust growth, supported by focused brand investments and wider distribution.

* Cost and margins

* Inflationary pressure remained elevated, particularly in HPC and OTC & Ethicals.

* Operating margins were impacted by higher input costs. The impact was partly offset by calibrated price increases and cost-saving initiatives.

* Management remains focused on improving cost competitiveness and leveraging digital capabilities.

* Consolidated business

* Consolidated revenue is expected to deliver double-digit growth (est. 13% in 2QFY27, 11% in 1QFY27), supported by broad-based growth across businesses.

* PAT is expected to grow in double digits (est. 8% in 2QFY27, 15% in 1QFY27), supported by strong business fundamentals.

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