India operations are expected to post double-digit revenue growth year-on-year (Y-o-Y) for the first time in 19 quarters, while international operations are expected to grow in the high teens in rupee terms. While input cost pressures are likely to weigh on profitability during the quarter, the impact on margins is expected to be partially offset by price hikes and cost controls. At the current price, the stock, which has shed about a quarter of its value over the past year, is trading at about 27x its 2027-28 earnings estimates.
In India, the home and personal care (HPC) business, which accounts for 46 per cent of revenue, could grow in double digits. Within personal care, hair oils and shampoos have registered growth in the high teens on the back of healthy consumer demand. Sales of perfumed and coconut hair oils have grown in double digits for the fourth consecutive quarter.
Nomura Research points out that the hair care portfolio, including shampoos, has grown in the high teens, slightly below Marico’s value-added hair oil sales growth of more than 20 per cent. Despite a high base, oral care is expected to post mid-single-digit growth, while home care is expected to register high-single-digit growth.
The health care vertical, which accounts for 29 per cent of India revenue, is expected to record mid-single-digit growth. Health supplements were affected by the ongoing transition to refreshed packaging and labels and could post flat to low-single-digit growth or a decline. The over-the-counter (OTC) and ethicals businesses registered a sequential recovery, with growth in the early teens on a low base. Digestives are expected to sustain their momentum and post high-teens growth.
Incremental growth is expected to come from the food and beverage segment. Within this segment, foods could grow at a strong double-digit rate, while the beverage portfolio is expected to post growth in the early teens. The sequential recovery in beverages follows three years of muted performance and has been driven by a wider range of formats and price points, as well as favourable seasonal conditions.
Nuvama Research estimates consolidated revenue growth at 11.8 per cent Y-o-Y, compared with 10.6 per cent in the first quarter (April-June/Q1) of FY27 and 5.4 per cent in Q2 of 2025-26 (FY26). This is supported by expected growth of 10 per cent Y-o-Y in the India FMCG business, which would mark a four-year high. Domestic volumes are likely to grow 5-6 per cent Y-o-Y, compared with growth of up to 5 per cent in Q1FY27 and 2 per cent in Q2FY26.
On the cost front, the company pointed out that inflationary pressures remain elevated, particularly in the HPC and OTC and ethicals businesses. While operating profit margins have come under pressure, the company has offset some of the impact through calibrated price increases and ongoing cost-saving initiatives. Brokerages expect operating profit growth to be in line with Q1FY27, while margins are expected to moderate Y-o-Y.
Nuvama Research expects gross margin to decline by 344 basis points (bps) Y-o-Y to 46 per cent, while operating profit margin is projected to fall by 62 bps to 17.8 per cent. Pricing actions are expected to help contain the impact of input cost pressures on operating margins. Analysts led by Abneesh Roy have retained their ‘buy’ rating and unchanged target price of ₹620.
Nomura Research has also retained its ‘buy’ rating, with a target price of ₹625. Analysts Mihir P Shah and Riya Patni of the brokerage point out that the business has begun to show sequential improvement and faces a soft, favourable base in the coming quarters. The stock is currently trading at more than two standard deviations below its medium-term average, which offers comfort. The brokerage’s rating reflects Dabur’s strong brands, distribution strength, and distinctive portfolio in ayurveda.
 "Dabur")