Icon times
Dabur India Limited Q1FY22 Result and Conference Call Highlights

Dabur India Limited Q1FY22 Result and Conference Call Highlights

Published on 09 August 2021 Views 62 Comments 0

Q1FY22 Result Analysis

1) Q1FY22 Result:

  • The company reported a strong topline and bottom-line performance in the quarter ended 30th June 2021 on the back of investment in power brands, increased distribution, effective cost management.
  • The Revenue from Operations of the company has increased significantly by 31.9% from Rs. 1,980 Cr. in Q1FY21 to Rs. 2,612 Cr. in Q1FY22. While Quarter on Quarter, the same has gone up by 11.8% from Rs. 2,337 Cr. in Q4FY21.
  • The Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA) of the company for the first quarter of FY22 stood at Rs. 552 Cr. against Rs. 417 Cr. in the same quarter of the previous year, amounting to growth of 32.5% YoY. Sequentially, the EBITDA of the company increased by 24.8% from Rs. 442 Cr. in the last quarter of the previous financial year.
  • The EBITDA margin has expanded by 10bps YoY from 21% in Q1FY21 to 21.1% in Q1FY22. Sequentially, it has expanded by 210 bps from 19% in Q4FY21. Inflation in Key Raw Materials continues which affects the Gross Margin Outlook of the Company
  • The Profit Before Tax (PBT) of the company also increased massively by 34% YoY from Rs. 424 Cr. in Q1FY21 to Rs. 568 Cr. in Q1FY22. Quarter on Quarter, PBT has gone up by 25.8% from Rs. 452 Cr. in Q4FY21.
  • The Net Profit of the Company for the quarter ended 30th June 2021 stood at Rs. 437.3 Cr. up by 28% YoY from Rs. 342 Cr. in the quarter ended 30th June 2020. The same was Rs. 378 Cr. in the quarter ended 31st March 2021 which is now up by 15.8%.
  • The Net Profit Margin (NPM) of the company has gone down by 60 bps YoY and increased by 50 bps QoQ to 16.7% in Q1FY22.

Dabur India- Q1FY22 Results

Dabur India- Q1FY22 Results

 

2) Segment-Wise Revenue:

i) Revenue Breakup:

  • Dabur India is having 4 major segments: Consumer Care Business. Food Business, Retail Business, and Others.
  • Dabur continued to post strong growth and market share gains across all key verticals like Health Care, Home Care, Personal Care, and Foods in Q1FY22
  • The highest contributing segment of the company is Consumer Care Business which has increased by 25% YoY and 7.9% QoQ from Rs. 1,734 Cr. and 2,010 Cr. respectively to Rs. 2,168 Cr. in Q1FY22.
  • The Food Business of the company also grew by 85.2% YoY from Rs. 217.3 Cr. in Q1FY21 to Rs. 402.5 Cr. in Q1FY22. Sequentially, revenue from this business is up by 46.8% from Rs. 274.1 Cr. in Q4FY21.
  • The Retail Business has also grown hugely by 351.7% YoY from Rs. 2 Cr. in Q1FY21 to Rs. 9.2 Cr. in Q1FY22. Quarter on Quarter, revenue from this segment has decreased by 60.35% from Rs. 23.1 Cr. in Q4FY21.
  • The revenue from the Others segment stood at Rs. 25.5 Cr. up by 15.5% YoY and 6.6% QoQ.
  • The EBIT Margin of the respective segments are also provided in the given table:

Dabur India- Segment-Wise Revenue

Dabur India- Segment-Wise Revenue

ii) Revenue Mix:

  • HPC segment grew well on the back of good performance of Hair Oils, Shampoo, and Home Care.
  • Under F&B Segment, the Beverages section noted significant growth.
  • OTC & Ethicals category performed well in the Healthcare segment.

Dabur India- Revenue Mix

Dabur India- Revenue Mix

iii) Revenue Mix- Geography-Wise:

  • The Revenue Mix of India's Business has expanded by 71.6% in Q1FY21 to 74% in Q1FY22.
  • While the International Business has decreased by 1.2% YoY from 26.2% in Q1FY21 to 25% in Q1FY22.
  • International Business grew by 34.2% in Constant Currency (28.2% growth in Indian Currency Terms).
  • International Business Revenue grew by ~2.5% YoY to 74% of the total revenue mix of the company noticing significant growth in the Middle East and North Africa (MENA), Egypt, and SAARC Countries.

Dabur India: Revenue Mix- Geography-Wise

Dabur India: Revenue Mix- Geography-Wise

3) Advertisement Expenses:

  • The Advertising Expenses of the company have increased by 29.3% YoY from Rs. 145.6 Cr. in Q1FY21 to Rs 188.4 Cr. in Q1FY22. Sequentially, the same is up by 22.2% from Rs. 154.2 Cr. in Q4FY21.
  • The Advertising to Sales Ratio stood at 7.2% in Q1FY22 against 7.4% and 6.6% in Q1FY21 and Q4FY21 respectively.
  • A&P Spends remains sharply higher on lower comparable.

Dabur India- Advertising Expenses

Dabur India- Advertising Expenses

4) Business Volume Growth:

  • Domestic Volume Growth of around 35% driven by strong growth in Home & Personal Care Segment.
  • Key Reasons:
  • Expansion of Rural Footprint.
  • Expanded Rural Coverage by 16% from 60,000 Villages in March 2021 to 69,000 Villages as of 30th June 2021.
  • The company plans to expand this by 33% to 80,000 Villages over the next 2 years.
  • International Business witnessing a strong turnaround
  • E-Commerce business reported over 100% growth and now it contributes to 8.2% of India FMCG Business of the company.

Dabur India- Business Volume Growth

Dabur India- Business Volume Growth

5) Category Highlights:

i) Healthcare:

a) Health Supplements:

  • This segment grew by 24.5% in Q1FY22.
  • Dabur Chyawanprash recorded strong double-digit growth and market share gain by 170 bps.
  • Dabur Honey and Dabur Glucose also posted double-digit growth.

b) Digestives:

  • This segment grew by 16.2% in Q1FY22.
  • Registered a smart recovery on the back of improved mobility and out-of-home consumption.
  • Hajmola and Pudin Hara's portfolio posted double-digit growth in Q1 FY22.

c) Over the Counter:

  • This segment grew by 52.3% in Q1FY22.
  • Driven by strong growth in Honitus, Lal Tail, and Shilajit Portfolio.
  • New Product Developments (NPDs) like Dabur Health Drops, Health Juices, and other immunity-boosting products continued to show strong traction.

d) Ethicals:

  • This segment grew by 50.8% in Q1FY22.
  • Grew by Strong double digits on the back of aggressive digital and on-ground initiatives.

e) New Launches:

  • Honey Tasties- Chocolate & Strawberry Flavours
  • Pudin Hara Drops and Ayush Kwath Drops
  • Anu Tail, Caldab Tablets, Kovirakshak Kit, Ayush 64 Tablets

ii) Home and Personal Care:

a) Oral Care:

  • This segment grew by 21.1% in Q1FY22.
  • Red Toothpaste continued to see robust momentum
  • Meswak and Babool Franchise reported double-digit growth.
  • Toothpaste market share by 100 bps

b) Hair Oils:

  • This segment witnessed a growth of 38.4% in Q1FY22.
  • Witnessed smart recovery with double-digit across brands.
  • Both perfumed oils and coco oils portfolios reported double-digit growth.
  • Improvement in the Market share of around 170 bps

c) Shampoo:

  • This segment witnessed a growth of 41.3% in Q1FY22.
  • Market Share improvement of around 60 bps.

d) Home Care:

  • This segment grew by 30.6% in Q1FY22.
  • Double-digit growth in Odonil & Odomos and recorded rise in market share of around 230 bps and 330 bps respectively.

e) Skin and Salon:

  • This segment grew by 5.4% in Q1FY22.
  • Excluding Sanitize range, the portfolio posted a growth of 66%. Fem and Oxy witnessed triple-digit growths.

f) New Launches:

  • Dabur Gold Coconut Oil, Vatika Ayuvedic

iii) Food & Beverages:

a) Beverages:

  • This segment witnessed a growth of 85% in Q1FY22.
  • In-home and out-of-home portfolios registered strong growths.
  • Market share of Real increased by 20 bps.
  • Recent Launches in the Beverages sector have shown some good traction.

b) Foods:

  • This segment witnessed a growth of 17.8% in Q1FY22.
  • Hommade brand continued to perform well driven by increasing in-home cooking.

6) Valuations:

  • The stock is trading at a little premium valuation over its Median PE of 1 Year, 3 Years, and 5 Year.
  • Dabur India, the personal products company, joined the elite club of companies with Rs 1-trillion market capitalization (market-cap) on the BSE in April 2021.

Dabur India- Valuations

Dabur India- Valuations

Earnings Call Highlights

Business Highlights:

  • Healthcare Portfolio for continuous 5th quarter registred the growth of above 20%.
  • Continued to be an undisputed leader in the honey market.
  • Witnessed market share gain of 170 bps and 330 bps in Chawayanprash and Honey Category respectively.
  • E-Commerce business has grown by more than 100% and now contributes around 8% of the total business.
  • To enhance the availability and access of our products, the company have increased village coverage by almost 15% in this quarter.
  • The company will continue to drive Project Samriddhi to achieve cost reduction and operational excellence.
  • Due to inflation, the company has taken one round of price increase, around 3% odd, and Samriddhi benefits to set off the impact of inflation.
  • But the second round of price increase will be taken only in the third quarter if the company doesn't see a cooling off of inflation coming in the third quarter.

Oral Care:

  • The oral care portfolio continued to post industry-leading growth of 21%. All the brands recorded strong double-digit growth.
  • Market share witnessed 100 basis points gain vis-à-vis last year.
  • Recently launched products like Dabur Herbal range of toothpaste continue to do well with sales 2x versus the same period last year. Dabur Lal Dant Manjan also witnessed a growth of 20% during the quarter.
  • The company has gained market share by 100 bps in Oral Care. And the total market share has reached 16.6%, a little behind HUL. Can become the number two brand by the year-end.

International Business:

  • The international business recorded a strong growth of 34% in constant currency during the quarter.
  • In terms of regions, the Middle East, North African (MENA) region posted strong growth of 50%, Egypt grew by 44%, sub-Sahara Africa grew by 36%, and Namaste business saw a growth of 40%.
  • SAARC business performed well with the growth of 42%, albeit some moderation in Bangladesh business due to country-wide lockdown on account of COVID.

Hair Oils:

  • Hair Oil's portfolio grew by 38% with all the brands posting strong double-digit growth.
  • Market shares in hair oils improved by 160 basis points.
  • This strategy of supporting our core brands with flanker brands is working well, and the company will continue to launch variants to cater to varied consumer needs in the hair oil segment.
  • The company is rolling out a Dabur Coconut Oil in the South of India and there's another launch that the company is rolling out, which is in the East of India.
  • This launch will be under the Brand Name of Anmol and Dabur Gold.
  • As per Nielsen report, the Hair Oil market is growing at a rate of 22% while Dabur Hair Oil is growing at a rate of 40%.
  • Market share in the coconut oil category and now we have become 6% market share in the coconut oil category from 9.5% in previous times.
  • Market share gains are coming from all sub-segments of the hair oil, so perfumed hair oils also, whether it's a mustard hair oil or it is a flanker brand of Badam Amla or it is a Dabur Amla, in all the three brands we have gained very healthy market share points.

Food & Beverage Business:

  • Earlier, Real was an urban distributed brand and the distribution was restricted to around 100,000 as compared to distribution available direct reach of around 1.2 million.
  • The company is catering to a separate consumer cohort which is coming to e-commerce to purchase it, separate available in our tetra pack and modern trade and separate in rural.
  • Launched three variants there in the carbonated PET bottle namely Jeera Cola, Nimbu, and Apple.
  • This year, the full-year the company is looking at Rs. 100 crores, and next four to five years the company eyes for Rs. 500 crores franchise out of our Hommade portfolio.
  • For the whole Company, the NPD ratio will be in the range of around 5% to 6% going forward for the full year.
  • In milkshakes, the company has been able to register a 1% market share, total size being in the range of around Rs. 800 odd crores.
  • And in the milkshake, the company launched three variants, out of which the chocolate variant is doing exceedingly well.
  • There is a 2x or 2.5x percent growth of the herbal market. And in that herbal market, the company is growing at 1.5x.

 

CAPEX:

  • Work on our new manufacturing unit at Indore has commenced and we will be investing around Rs. 550 crores on this plant over the next two to three years.
  • The company has further strengthened the organization through lateral hires at senior positions in marketing, operations, IT, and R&D.
Attachments
File Name
private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs 7499/Year.

Please login to view this free article.

This blog is available only for logged in users, please register and get access to view this article.

LATEST UPDATE

premium Premium
free Free
Read More

REPORTS


Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
16:10
Chat with InvestYadnya