During the quarter, the overall FMCG volume trends in India continued to show gradual improvement on a 2-year CAGR basis. The trajectory in rural areas showed more promise, while urban areas remained stable. Both HPC (Home and Personal Care) and Food segments witnessed an uptick, with the former experiencing a more pronounced pickup over the last six months. Premium segments outpaced mass segments, and alternate channels gained significance compared to General Trade (GT).

The volume growth was supplemented by price hikes in the Coconut Oil portfolio, which more than offset the residual base impact of pricing cuts in the Saffola Oil portfolio. Key portfolios saw healthy off-takes, with more than 90% of the business either gaining or sustaining market share and penetration on a MAT basis.

The execution of Phase 1 of Project SETU in six states, representing a mix of stronghold and opportunity markets, has yielded promising initial results. This phase has led to direct coverage expansion in both urban and rural markets. In FY25, the company plans to scale up Phase 1 markets and expand into more states.

The international business sustained its double-digit constant currency growth momentum, with each key market delivering broad-based growth.

Gross margin expanded by 230 basis points year-on-year. Advertising and promotion spending increased by 13% YoY. The EBITDA margin stood at 23.7%, up 50 basis points YoY, with EBITDA grew by 9%. Profit after tax (excluding one-offs) increased by 12% due to a lower effective tax rate (ETR) during the quarter. This excludes the one-off gain on the sale of fixed assets, classified under ‘Other Income,’ in the base quarter. Reported PAT growth was 9%. The ETR is expected to be 22.5% in FY25

Category Growth

Parachute Rigids registered a 2% volume growth. Volume off-takes grew 8% during the quarter. The brand asserted its stronghold in the category with ~100 bps gain in market share during the quarter. The volume market share of the composite Coconut oil portfolio reached higher levels at ~64% on a MAT basis.

Value-Added Hair Oils declined 5% in value terms amidst persistent sluggishness and competitive headwinds in the bottom of the pyramid segment. Mid and premium segments of franchises continued to fare relatively better. The value market share of the franchise was up ~60 bps during the quarter and consolidated at 27% on a MAT basis.

Saffola Edible Oils delivered mid-single-digit volume growth as input and consumer pricing remained stable.

Foods posted robust 37% value growth YoY. Saffola Oats delivered 20%+ growth, while the relatively newer franchises also scaled up on expected lines. True Elements and Plix maintained their accelerated growth momentum.

Premium Personal Care sustained its strong growth trajectory during the quarter, led by the Digital-first portfolio. Beardo continued to scale well and is on course to deliver improved profitability in line with expectations. Just Herbs and Personal Care portfolio of Plix continued to gain traction.

Earlier this month, the Company announced that it will collaborate with renowned dermatological solutions provider, Kaya Limited, to advance in the personal care segment. Under this arrangement, the Company will have exclusive rights to scale up Kaya’s range of efficacy-based personal care products outside of its clinics. This strategic initiative presents a Rs 100 crore revenue opportunity over the next 4-5 years and will add another growth lever to Marico’s Premium Personal Care led Digital Business.

In international business, Bangladesh achieved 10% constant currency growth, maintaining resilience and momentum. South-East Asia was flat in constant currency terms, as the recovery in HPC demand in Vietnam was offset by a weaker quarter in Myanmar. MENA delivered 20% constant currency growth, with both the Gulf region and Egypt performing well. South Africa saw a 28% constant currency growth, driven by the ethnic hair care segment. NCD and Exports reported 14% growth.

Saugata Gupta, MD & CEO, said, “The new fiscal has started on a promising note for both the domestic and international businesses with revenue growth visibly turning a corner. We expect to sustain the improving trajectory in the core domestic business on the back of consistent market share and penetration gains coupled with the ongoing initiatives to revive growth in traditional trade and expand direct reach under Project SETU. We will also maintain a steadfast focus on the profitable scale-up of the Foods and Digital-first brands. The international business has been veritably consistent over the last few years and is expected to maintain its double-digit constant currency growth momentum. We will aim to deliver on each of the key performance parameters and drive healthy revenue-led earnings growth in the near and medium term.’’

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Despite a challenging demand environment marked by high food inflation and unemployment rate, Dabur delivered a strong 8.3% growth in operating profit, demonstrating the resilience of its business model. Dabur ended the first quarter of 2024-25 with an 8% growth in consolidated net profit at Rs 500 crore, up from Rs 464 crore a year earlier. Its India’s FMCG business posted a volume growth of 5.2% for the quarter.

Talking about the company’s performance, Mohit Malhotra, CEO, Dabur India Limited, said, ‘‘It’s been a good start to the new financial year as we drove sequential recovery in volume growth, driven by rural markets, to report industry-leading performance across our key verticals. This allowed us to plow higher investments behind our brands to drive market expansion and sustain our growth momentum. The investments allowed us to drive demand during the quarter with key verticals like Health Supplements, Digestives, Shampoos, Toothpaste, Home Care and Beverages.’’

Mohit added, ‘‘Through disciplined execution of our go-to-market strategy, we continued to capitalize on our brand strength and deepen consumer engagement. Our focused approach towards expanding our rural footprint to over 1.22 lakh villages reaped rich dividends as rural demand outpaced urban demand by 350 bps during the quarter. To cater to this wider network, we have expanded our product basket with the launch of newer affordable and rural-specific pack bundles across categories, besides investing in consumer activations in the hinterland to establish a better connection with our consumers.’’

In terms of category growth, Dabur’s Toothpastes, Dabur Red Paste and its premium brand Meswak, reported a 12% growth during the quarter. The 100% Fruit Juice portfolio grew by 21%, while the Carbonated Fruit Drinks portfolio grew by 90%. The Digestives business reported an 11% jump. The Shampoo portfolio also rose by 13.7% while the Health Supplements business posted a 7% growth during the quarter. The food business grew by 21.3%. The company recently acquired the Badshah business which grew by 15%.

Dabur reported market share gains across 95% of its portfolio. Odomos gained a 518 bps market share, while the J&N portfolio reported a 330-bps improvement in market share. Dabur also reported a 194-bps gain in Air Freshener market share.

In terms of international business, the company reported an 18.4% growth in constant currency terms. The Egypt business reported a nearly 64% growth and Nigeria grew by 181%, while Sub-Saharan Africa grew by 21.4% and MENA by 13%.

Dabur has also made significant strides on the ESG (Environment, Social & Governance) front. The company is achieving its target of becoming a Net Zero Emissions Enterprise by 2045.

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This swing back to profitability comes despite challenging market conditions,  highlighting the effectiveness of the brand’s focus on value-added products and operational efficiency. Its value-added portfolio grew by 15% year-on-year, with its curd products maintaining a 35% CAGR. The company has been sustainably positive for three years  since its break-even in 2021.

Rashima Misra, Cofounder and ED, Milk Mantra, said, ‘‘Our journey from a Rs 6.56 crore EBITDA loss to a positive 6% margin, coupled with our industry-leading 28% contribution margin, reflects the strength of our business model. This milestone enables us to further invest in innovation and expansion of our ‘Milky Moo’ brand, while continuing to support our network of 80,000 farmers.’’

The company’s B2C approach continues to drive its success, with 95% of revenue generated through its own general trade distribution channel. Its D2C initiative, ‘Daily Moo’, has gained significant traction, contributing 5% of total revenue and serving approximately 4,000 daily orders in Bhubaneswar alone.

The recent USD 10 million funding from USDFC has further fueled the company’s expansion plans. It is on the verge of completing a new fermented products manufacturing plant that  set to bolster the regional expansion of the Milky Moo brand.

Looking ahead, Milk Mantra plans to scale up its D2C model, expand into key markets, and introduce innovative niche products over the next two fiscal years. The company remains committed to growing its farmer network, reinforcing its dedication to ethical milk sourcing and rural economic development.

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The strong performance can be attributed to Dabur India’s strong execution of brand strategy, increased premiumization efforts, and expansion of distribution footprint, coupled with the benefits derived from stringent cost reduction measures implemented throughout the fourth quarter and the entire fiscal year of 2023-24. 

The company’s operating profit exhibited an improvement of 13.9% during the quarter, with quarterly net profit surging by 16.2% to Rs 350 crore, compared to Rs 301 crore recorded a year ago. Q4 Consolidated Net Profit, on a like-to-like basis, witnessed a substantial upsurge of 22.7% to Rs 370 crore.

During the quarter, consolidated revenue experienced a robust 7.3% growth on a constant currency basis, reaching Rs 2,815 crore, representing a 5.1% increase on an INR basis compared to Rs 2,678 crore reported a year earlier.

Mohit Malhotra, CEO, Dabur India Limited, expressed satisfaction with the company’s performance, emphasizing the efficacy of Dabur’s brands.  He says, ‘‘We have been investing heavily in our brands, which have increased by 33%, to drive demand and also sustain the growth momentum. This has helped us deliver steady sales and profit growth in the fourth quarter despite multiple headwinds. We continued to execute our strategic playbook by driving operational excellence, delivering innovative and premium products, and expanding our retail footprint to build the foundation for long-term profitable, sustainable growth.”

Premium products account for 18% of Dabur’s portfolio, contributing to the overall growth trajectory. The FMCG business witnessed a volume growth of 5.5% for the full year, with key brands posting category-leading growth and gaining market share across 95% of the portfolio. Notably, Odomos, Chyawanprash, Hair Oil, and Honitus reported significant market share gains, reflecting the strength of Dabur’s brands.

Dabur’s investment in expanding its rural footprint has yielded substantial dividends, with rural demand outpacing urban demand. The company’s rural distribution network, which expanded by 22,000 villages to 122,000 villages during the fiscal year 23-24, has played a pivotal role in driving rural growth, resulting in a 400 bps increase compared to urban growth.

In terms of category growth, Dabur’s Oral Care penetration stands at  52%, with the toothpaste business reporting a notable 23% jump. The Digestives, Home Care, Shampoo, and Foods segments also demonstrated strong growth during the quarter.

Dabur also delivered a solid performance in the overseas markets, with the International Business reporting a Constant Currency growth of 12% in the fourth quarter and 16.4% for the full year 2023-24. During the quarter, the Egypt business grew by 63%, while Turkey business was up 39% and the Middle East & North Africa (MENA) markets posted a growth of 6.3%. The Sub-Saharan Africa business rose 23.8%.

The Board of Directors has recommended a Final Dividend of 275%, totaling 550% for the fiscal year 2023-24, in line with the company’s payout policy. This reflects Dabur’s commitment to delivering value to its shareholders while maintaining a strong financial performance.

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