Dabur India (DABUR) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 saw a 5.5% decline in consolidated revenue due to a one-time inventory rationalization to support GT channel partners, impacting short-term sales but aimed at long-term business health.

• Rural growth outpaced urban for the third consecutive quarter, while urban consumption is believed to have bottomed out and is expected to recover.

• Dabur proposes to merge Sesa Care Private Limited, a leading Ayurvedic hair care brand, to strengthen its portfolio and market position in the Ayurvedic hair oil segment.

• Unaudited consolidated and standalone financial results for the quarter and half year ended September 30, 2024, were approved by the Board on October 30, 2024.

• Interim dividend of ₹2.75 per share (275% of face value) declared, with record date set for November 8, 2024, and payment from November 22, 2024.

Financial highlights

• Consolidated revenue from operations for Q2 FY25 was ₹3,028.59 crore, down from ₹3,203.84 crore in Q2 FY24; H1 FY25 revenue was ₹6,377.70 crore, up from ₹6,334.31 crore in H1 FY24.

• Net profit for Q2 FY25 stood at ₹417.52 crore, compared to ₹507.04 crore in Q2 FY24; H1 FY25 net profit was ₹911.87 crore, down from ₹963.65 crore in H1 FY24.

• Secondary sales grew 2.3% year-on-year, with home and personal care up 6% and healthcare up 4%.

• Sesa reported approximately INR 133 Cr in revenue for FY24, with EBITDA margins around 13%.

• Gross margins expanded by 102 basis points.

Outlook and guidance

• Inventory correction is complete; normal growth expected to resume in Q3.

• H2 is expected to see mid- to high-single-digit growth, subject to favorable winter and FMCG sector performance.

• The merger is expected to unlock significant cost and revenue synergies, leveraging Dabur's distribution and operational strengths.

• Premium pricing and superior gross margin profile anticipated post-merger.

• Interim dividend declared for FY25, reflecting confidence in cash flows and financial stability.