FMCG demand has been the centre for many discussions, especially for some key players like Dabur. Analysts flag persistent growth challenges for Dabur in the near to medium term after the FMCG firm posted a subdued performance in the June quarter results.
A look at Dabur’s Q1FY26: Muted Q1 despite rural support
Dabur’s consolidated revenue rose just 1.7 per cent year-on-year to Rs 34,046 crore in Q1FY26, in line with estimates. Rural markets outperformed urban ones for the fifth straight quarter, though urban demand showed signs of sequential recovery.
However, the company’s India business revenue declined 1.8 per cent YoY, accompanied by a 1 per cent volume drop. This was primarily due to weak demand in the seasonal Food and Beverages (F&B) and Healthcare segments. Glucose, a key Q1 product, saw sales plunge nearly 30 per cent owing to unseasonal rains and a high base effect from last year.
Dabur’s Q1FY26: Margins steady, but competition intensifies
Elara noted that Dabur’s operating margins were stable at 19.6 per cent in Q1, marginally better than expectations. The company managed to offset 7 per cent raw material inflation through price hikes and cost-saving efforts. However, heightened competitive pressure in categories like oral care and hair oils led to a 75-basis point drop in gross margins.
“Gross margin pressures, mainly due to negative net realizations in India, offset the benefit of price increases,” Elara noted.
Dabur eyes strong Q2 in healthcare and HPC segments
Dabur has laid out a seven-pillar strategy to revive growth. This includes strengthening power brands like Dabur Red, Amla, Hajmola, Pudin Hara and Shilajit, and expanding presence in wellness categories. The company also plans to actively explore M&A opportunities in healthcare, HPC and food segments.
The management expects strong double-digit growth in the HPC and HC segments in Q2FY26, while F&B may see modest improvement. It aims to close the year with high single-digit value growth.
Despite these plans, Elara remains cautious. “We continue to believe that growth challenges persist for Dabur in the medium term,” the brokerage said.
FMCG peers posted modest Q1 growth
Its FMCG peers posted a mixed yet cautiously optimistic performance in Q1 FY26. Hindustan Unilever (HUL) reported a 5.6 per cent rise in its consolidated net profit to Rs 2,756 crore. Revenue also increased by 5.16 per cent at Rs 16,296 crore.
ITC reported a sequential profit growth of 3.21 per cent to Rs 5,343.41 crore and a year-on-year net profit growth of 7.6 per cent. The company posted revenue from operations at Rs 23,129.35 crore, registering a year-on-year growth of 19.53 per cent.
Marico, which sells brands like Parachute and Saffola, has reported a 8.23 per cent increase in consolidated net profit to Rs 513 crore and Revenue surged 23.31 per cent at Rs 3,259 crore.