Dabur India's stock increases as Q2 net profit increases by 3%

 Dabur India's stock increases as Q2 net profit increases by 3%

In Q2FY24, Dabur India recorded a consolidated net profit of Rs 507.04 crore, up 3.29 percent over the same period the previous year.

Dabur reported revenue of Rs 3,203.84 crore, an increase of 7.27 percent.

The FMCG company Dabur India announced a consolidated net profit of Rs 507.04 crore for the second quarter of FY24, up 3.29 percent year over year. This news caused the share price of Dabur India to rise by more than one percent in early trading on November 3.

According to Morgan Stanley, the profits were consistent, urban growth exceeding rural growth, and encouraging indications of recovery were seen in October. Dabur saw increases in market share across ninety percent of its product line.

The firm said that the profit was greater due to consistent results from the healthcare and home & personal care (HPC) segments.

Revenue increased by 7.27 percent to Rs 3,203.84 crore from Rs 2,986.49 crore in the same period last year. The revenue grew 2.34 percent sequentially.

But Motilal Oswal pointed out that Dabur, with over half of its domestic sales coming from rural areas, has seen a stronger rural recovery than the sector as a whole. The domestic brokerage said, "Enhancing infrastructure for distribution and fostering innovation will serve to further boost the company's growth momentum."

OTC and digestives propelled the healthcare industry's expansion. Dabur announced increases in market share in the healthcare sector for the Chyawanprash, Honey, Glucose, and Baby Care categories. Growth in HPC was driven by double-digit growth, increases in market share for Odomos and Odonil, and the underpenetration of the homecare industry as a whole.

In CC terms, international business increased 23.6 percent YoY, while in INR terms, it climbed 10.4 percent YoY.

According to Motilal Oswal, the EBITDA margin was unable to increase by 160 bps to 21.8 percent because of increasing ad expenditures (up 170 bps YoY to 6.8 percent), reduced other expenses (down 60 bps YoY), and constant personnel costs.

According to the Dabur India management during its investor conference call, the company has incurred legal fees of around Rs 60–65 crore in H1FY24 related to the ongoing dispute involving its hair relaxer, which users allege has caused ovarian cancer.

Moving ahead, it is projected that the legal costs would fall into the region of Rs 20 crore to Rs 22 crore per quarter. In the event that Dabur is held legally liable for the legal matter, it is covered by product liability insurance. The business, however, feels that the complaint is without validity.