Dabur India firms up after Q2 PAT rises 20% YoY

Dabur India rose 2.22% to Rs 517.40 after the company's consolidated net profit rose 20% to Rs 482.86 crore in Q2 September 2020 from Rs 403.64 crore in Q2 September 2019.

Consolidated revenue from operations came at Rs 2,516 crore in Q2 September 2020, a 13.75% increase over Rs 2211.97 crore in the same period last year. The company said this is the highest revenue growth reported in the last couple of years. The result was announced during market hours today, 3 November 2020.

Profit before tax came at Rs 589.57 crore in Q2 September 2020, rising 27.6% from Rs 461.81 crore in the same period last year. Current tax expense jumped 51% to Rs 105.43 crore in Q2 September 2020 over Q2 September 2019.

Dabur India reported a strong growth in its performance for the second quarter of 2020-21, backed by sustained efforts in driving demand for its ayurvedic healthcare, hygiene and nutrition products, coupled with strong innovation to meet the emerging consumer needs in the wake of the COVID pandemic.

The company's operating profit grew by 16.3% to Rs 569 crore in Q2 September 2020 over Q2 September 2019 and the margin saw an improvement of 50 bps, reaching 22.6% in Q2 FY21.

The FMCG's business led the growth with a 19.8% surge, with an underlying FMCG volume growth of 16.8% during the Q2 FY21.

The company's Health Supplements business reported a 70.8% growth during Q2 September 2020. The Ayurvedic OTC range grew by over 56% while the Ayurvedic Ethicals business ended Q2 with an over 26% growth. While the traditional Skin Care business continued to face headwinds, the strong demand for our newly launched Personal Hygiene products range helped the overall category end the quarter with an over 38% growth. Dabur's Oral Care Sales was up over 24% with its flagship Dabur Red Paste reporting strong double-digit growth. The Shampoo business, on the back of strong demand for Vatika Shampoo, grew by nearly 18% in Q2.

Commenting on the company's performance, Mohit Malhotra, CEO said, "While COVID-19 continues to impact people around the world, Dabur India's strategic business transformation exercise to develop and implement aggressive growth strategies in the core business areas and successfully address the emerging challenges helped us deliver a healthy topline growth accompanied by an expansion in Margin. Our domestic Healthcare business reported a strong 49% growth, with the recent consumer-relevant innovations contributing to around 5-6% of our Revenue. Our International Business has also staged a smart recovery and reported a growth of 5.5% despite the key GCC market continuing to face macro-economic headwinds."

He further added, "Favourable Monsoon and enhanced stimulus announced by the Government as part of its overall thrust on boosting rural Economy is expected to further drive rural demand in the coming months. The e-commerce business for Dabur grew by over 200% in Q2 of 2020-21 and today has a saliency of 6% as compared to 2.1% a year earlier. Healthcare, particularly the portfolio of our immunity-boosting products, continues to be the outperformer for Dabur. This is also in line with our strategy of focusing on the Consumer Health categories. The Home & Personal care business also reported a recovery, growing by high single digits, while the domestic Foods Business saw a strong revival with in-home consumption returning to near normal levels. However, this category was impacted by the continued closure of Hotels, Restaurants and Institutional businesses."

Meanwhile, the board of the company has declared an interim dividend of Rs 1.75 per equity share. The record date is on 12 November 2020.

Dabur India operates in various product categories, such as hair care, oral care, healthcare, skin care, home care and foods. Its business units include consumer care business, foods business and international business.

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