Dabur India shares fall 7% to hit 52-week low after muted Q4 updates

Shares of Dabur India crashed more than 7 per cent during the trading session on Thursday, hitting its 52-week lows, after the company shared a muted outlook and guidance for the January-March 2025 period, along with its quarterly update for the given quarter.

In its quarterly update, Dabur said that general trade continued to be under pressure while organised trade including modern trade, E-commerce and quick commerce maintained their growth momentum However, FMCG volume trends continued to be subdued which may result in flattish revenue growth for the quarter.

"Due to delayed and truncated winters and slowdown in urban markets, India FMCG business is likely to decline in mid-single digits," said the company. "Due to impact of inflation coupled with operating deleverage, operating profit margin to contract by around 150-175 basis points"

On the positive side, the company said that key international markets, including the MENA region, Egypt, and Bangladesh, are likely to post strong performance. International business to report robust double-digit growth in constant currency terms

Following the announcement, shares of Dabur India cracked as much as 7.25 per cent to Rs 459.65 on Thursday, its 52-week lows, with its market capitalization barely holding to Rs 80,000 crore mark. The stock had settled at Rs 495.50 on Wednesday. The stock has crashed nearly 32 per cent from its 52-week high at Rs 672, hit in September 2023.
 

InCred Equities expects domestic sales to decline 5 per cent YoY in 4QFY25 while international business is expected to grow 9 per cent YoY, leading to flattish yoy sales growth on a consolidated basis. It has an 'add' rating with a target price of Rs 590 on the stock.
 

"We expect beverages portfolio to continue to remain under pressure due to shift in consumer preferences in favour of carbonated beverages led by price disruptions. We expect Ebitda margins to contract 160 bps YoY to 14.9 per cent. The company is likely to close FY25 with a 3-4 per cent lower EPS than our/consensus estimates," InCred added.
 

IIFL Capital expects gross margin for the FMCG players to contract with inflation in the commodity basket. It also sees this to be another modest quarter for the sector as the demand trends similar to 3QFY25, with Dabur likely to report a weak performance.

IIFL expects Dabur to report a 3 per cent year-on-year (YoY) growth in revenue and ebitda at Rs 2,902.5 crore and Rs 480.7 crore, respectively. Net profit may inch-up half a per cent to Rs 351.3 crore in the March quarter as the volume growth is seen at one per cent only. However, it still has a 'buy' rating on Dabur with a target price of Rs 585.

Dabur's culinary business under the brands ‘Hommade’ and ‘Badshah’ continued to perform well and is expected to post double-digit growth. The Indian business is expected to decline to mid-single digits due to a delayed and short winter and a slowdown in urban markets, said Motilal Oswal Financial Services, which has a 'buy' rating on the stock.

"The International business is expected to register double-digit growth in CC terms, led by robust momentum in the MENA region, Egypt, and Bangladesh. Operating margin is expected to contract 150-175bp YoY due to inflation, coupled with operating deleverage," Motilal Oswal adds.