Dabur India Q2 profit drops 2.8% to Rs 490 crore

Dabur India on Wednesday reported a 2.8 per cent year-on-year (YoY) drop in net profit at Rs 490.10 crore for the September quarter compared with Rs 504.40 crore in the same quarter last year.

Revenue from operations for the quarter rose 6 per cent YoY to Rs 2,986.50 crore from Rs 2,817.60 crore in the corresponding quarter last year. Ebitda margin for the quarter fell to 24.2 per cent from 26 per cent in the year-ago quarter.

Inflationary pressure

The FMCG firm said it mitigated the impact of unprecedented inflationary pressures through disciplined cost control, operational efficiencies and judicious price increases across key product categories.

"While the challenging economic environment continued to be a concern and impacted the purchasing power, we are seeing green shoots of recovery with the onset of festive season. The impact of inflationary pressures was more pronounced in the rural markets with demand growth in hinterland lagging urban markets for the first time in five quarters," CEO Mohit Malhotra said.

Malhotra said he is hopeful of rural demand reporting a smart recovery in the coming quarters. The Dabur CEO said his company is investing ahead of the curve to ride the demand recovery by expanding rural footprint. Dabur India added nearly 9,000 villages in the September quarter to take its total coverage to 1,00,000 villages.

Acquisition

Meanwhile,  Dabur India said it is acquiring a 51 per cent stake in Badshah Masala for Rs 587.52 crore, at an enterprise value of Rs 1,152 crore. "This translates to a revenue multiple of around 4.5 times and Ebitda multiple of around 19.6 times of FY2022-23 estimated financials.

Mukul Agrawal held 2.64 per cent stake in the infra firm as of September 30. Agrawal has been holding this stock since June 2020.

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Also read: Dabur India Q2 preview: Profit may drop 2-4%; margin contraction likely