Dabur India Q1 Results: Profit Beats Estimates Despite Higher Raw Material Costs

Dabur India Ltd.’s profit rose sequentially beating estimates as its margin expanded, overcoming higher raw material costs.

Net profit attributable to shareholders of the maker of ayurvedic products rose 15.7% sequentially to Rs 437.3 crore in the quarter ended June, according to an exchange filing. That compares with the Rs 402.4-crore consensus estimate of analysts tracked by Bloomberg.

Q1 FY22 Highlights (QoQ)

• Revenue rose 11.8% to Rs 2,611.5 crore, compared with the estimated Rs 2,385.3 crore.

• Operating profit rose 24.8% to Rs 552 crore, against the Rs 490.8-crore forecast.

• Margin stood at 21.1% against 18.9%. Analysts had pegged the metric at 20.6%.

• Raw material costs rose 9 % sequentially.

• As a percentage of revenue, raw material costs stood at 44.5% compared to 45.7% in the January-March quarter.

India consumer goods volumes rose 34.4% year-on-year in the April-June quarter.

"We applied learnings from last year on streamlining the supply chain to ensure minimal disruption while firmly focusing on delivering volume-led profitable growth," Mohit Malhotra, chief executive officer at Dabur India, said in an earnings statement.

Among the consumer goods makers that have so far announced results for the April-June quarter, Nestle India Ltd. and Hindustan Unilever Ltd. saw their margin narrow over the preceding three months as commodity costs rose. Britannia Industries Ltd.’s margin was stable, while Marico Ltd.’s expanded.

HUL, India’s largest FMCG company, said it would need to navigate the next couple of quarters of “very high inflation”. Britannia witnessed an increase in the prices of palm oil and crude. Nestle India, too, highlighted rising commodity prices across oils and packaging materials.

Shares of Dabur rose 3.06% after the results were announced compared with a 0.98% rise in the Nifty 50.