How will FY26 pan out for Dabur after a disappointing Q4FY25? The coming years are going to be tough for Dabur India as revenue and profit are expected to decline, however, the long-term prospects for the company remain strong, says a report by Axis Securities.
The report expects Dabur’s FY26 revenue growth to decline 9 percent and FY27 growth to go down 12 percent. At the same time, the company’s profit is also expected to decline by 14 percent in FY26.
Dabur future strategy
After the disappointing Q4 results the Dabur has laid out a roadmap for better revenue and growth. The company has announced that it would be doubling down on the core brands with higher investment for better market penetration.
The company has also announced premiumization and modernization of its health and beauty products. It would introduce low-sugar beverages, new serums, and health gummies. Along with the digitization of its distribution channels, the company is also looking to expand its Hajmola brand and health juice categories.
Concerns for Dabur
Dabur’s core businesses are home, personal care, and healthcare, are having the toughest time in managing their market share and revenue growth. Dabur’s home and personal segment forms about 48 percent of its total sales. While the overall segment saw a 3.3 percent YoY growth in Q4, the big subcategories of the segment show a de-growth in the quarter.
Oral care and hair care subcategories registered a 5.2 and 4.6 percent de-growth in Q4. Skin care category posted a good 8 percent growth, while the home care category saw a mere 0.9 percent YoY growth.
Dabur’s healthcare segment, which accounts for 30 percent of total sales of the company, posted a modest 4.7 percent YoY growth in Q4 FY25. Dabur Healthcare’s health supplements and digestive business saw a de-growth of 3.6 and 2.1 percent in Q4.
In the food and beverage segment of the company, the foods and spices categories saw a good YoY growth of 14.2 percent and 6 percent in the Q4. But the beverage category of the company was down by 9.2 percent in Q4.
What is causing the decline?
According to a report by Axis Securities, Dabur’s sales have been hit hard by weak urban demand and food inflation. Dabur saw only 0.6 percent YoY growth in its sales. While the company’s international sales grew by 19.3 percent in Q4, YoY, its domestic sales declined by 3.4 percent in the same period.
Dabur’s sales in the urban areas remained flat in the Q4. On the other hand, its sales in the rural area grew by 14 percent in the same quarter.
Company’s EBITDA margins declined by 150 bps to 15.1 percent, on YoY. The company’s core business, beverages and personal care, saw an input inflation of 4.5 to 5 percent, which was not supported by an adequate price increase. The company hiked prices by 3.5 percent in Q4 FY25.
Dabur’s Q4 FY25 results-
Dabur India posted a profit of Rs 329 crore in its fourth quarter (Q4) of the financial year 2024-25 (FY25). The company has reported an 8.4 percent decline in profit in Q4 on a year-on-year (YoY) basis.
At the same time company’s revenue for the quarter remained flat at Rs 2830 crore. It has posted a revenue of Rs 2814 crore in the same quarter in FY24. The FMCG giant is struggling to increase its revenue, which, in turn, is causing a loss in its profit.