Dabur India expects revenue to grow in Q2; domestic consumption recovers, overseas sales strong

Dabur India is likely to see mid to high single-digit revenue growth in the second quarter of the current fiscal year as international business improves and domestic consumption recovers, the company said in a statement.

As of 1.30 pm, Dabur India shares were trading flat at Rs 550.5 apiece on the NSE.

The consolidated business will see higher gross margin expansion than in the first fiscal quarter as a result of moderating inflation and the firm’s cost-saving initiatives, the statement said.

The company said that consumption has improved year-on-year (YoY), however, the recovery has been gradual on a mild summer and a slightly deficient monsoon. Since the festive season also occurs later in the year, the offtake will be carried forward to the next quarter. Consumption in rural and urban markets is expected to recover as a result of improving macro indicators, an increase in government spending, and positive consumer sentiment.

In India, healthcare and home & personal care (HPC) segments are expected to see high single-digit growth. The delay in the festive season will result in declining revenue for the F&B business – however, Badshah Masala will continue to perform well and is likely to record healthy growth.

On the other hand, its international business is expected to see a strong performance, with double-digit growth in constant currency, led by the Middle East, Egypt and Turkey.

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Stock performance, technical view and shareholding pattern

Compared to Nifty’s one-year run of 13.6 percent, Dabur shares have fallen 0.6 percent. From its 52-week high of Rs 610.75, the shares are now trading lower by 9.9 percent.

The counter’s RSI stands at 41.6, indicating that the stock is neither oversold nor overbought. There is low volatility in the stock, as suggested by the one-year beta of 0.51. The stock is trading under all its key moving averages.

According to the June shareholding data, the promoters hold a 66.2 percent stake in the firm over quarters. FIIs held 19.4 percent. DIIs owned 8.9 percent of which 3.37 percent was held by mutual funds. The public held a 5.5 percent stake in Dabur.

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