Dabur India Shares Decline Following Q4 Business Update

Market Performance

Shares of Dabur India plunged over 7% on April 4, reaching a 52-week low. The drop followed the company's latest business update for the quarter ending March 2025 (Q4FY25). While international markets demonstrated resilience, domestic demand trends remained subdued, affecting overall performance.

Business Performance Across Markets

Dabur India reported contrasting trends in its various market segments. The rural sector showed more substantial growth compared to urban markets. Sales through modern trade, e-commerce, and quick commerce channels maintained positive momentum, whereas general trade faced ongoing challenges. The FMCG industry continued to experience slow volume growth, further influencing Dabur's domestic sales.

Key regions such as the, North Africa, Middle East, Egypt, and Bangladesh recorded strong growth on the international front. The company expects double-digit expansion in constant currency in these markets, supported by steady demand and strategic initiatives.

Domestic Market Challenges

Despite strong global performance, the company encountered headwinds in its domestic FMCG segment. A shortened winter season and sluggish urban demand contributed to sales pressure. However, Dabur's Foods business, which includes brands like 'Homemade' and 'Badshah,' continued to grow at a double-digit rate. Nevertheless, India FMCG's overall segment will witness a mid-single-digit decline. As a result, consolidated revenue for Q4FY25 is anticipated to remain stable compared to the previous year.

Financial Performance

• Revenue: Expected to remain flat year-on-year
• EBITDA Margins: Anticipated to contract by 150-175 basis points year-on-year
• Net Profits: Impacted by inflationary pressures and cost challenges

The contraction in operating profit margins is attributed to inflationary trends and operating deleverage. Despite these short-term hurdles, the company focuses on long-term growth strategies, including brand investments, market expansion, and efficiency improvements.

Stock Performance

Following the business update, Dabur India's share price dropped by 7.2%, reaching ₹459.65, marking its lowest level in 52 weeks. The stock has fallen over 31% from its 52-week high of ₹672.00, recorded in September 2024. Over the past year, it has declined by approximately 7%, reflecting broader concerns related to demand and profitability.

Conclusion

Due to demand fluctuations and cost pressures, Dabur India faces near-term challenges in the domestic FMCG sector. However, its strong international market presence and strategic investments in brand-building and operational efficiency position the company for long-term growth. While short-term performance remains uncertain, Dabur focuses on improving profitability and market reach.