According to reports from Business Standard, Dabur India is expected to deliver robust 11.8% year-on-year revenue growth in Q2FY27, significantly higher than the 10.6% YoY growth recorded in Q1FY27 and 5.4% YoY growth in Q2FY26. This strong performance is attributed to a 10% YoY growth in the India FMCG business, which reached a four-year high. Domestic volumes are projected to grow 5-6% YoY, compared to gains of up to 5% YoY in Q1FY27 and 2% YoY in Q2FY26. The robust topline growth in India and international operations, along with better-than-expected profitability performance, are key positives for the fast-moving consumer goods major.
As reported by Business Standard, the home and personal care segment, which accounts for 46% of revenues, is expected to achieve double-digit growth. Within personal care, hair oils and shampoos have registered high teens growth driven by healthy consumer demand, with sales in double digits for perfumed/coconut hair oil for the fourth consecutive quarter. The hair care portfolio, including shampoos, has grown in the high teens, though slightly below Marico's value-added hair oil sales growth of 20%-plus. Despite a high base, oral care is projected to post mid-single-digit growth, while home care is expected to register high-single-digit growth. Growth in international operations is expected to be in the high teens in rupee terms.
According to Business Standard, the healthcare vertical, representing 29% of India revenues, is expected to record mid-single-digit growth. Health supplements were impacted by the ongoing transition to refreshed packaging/labels and could record a flat to low-single-digit decline. The OTC and ethicals business registered a sequential recovery with early-teens growth on a low base. Digestives are expected to continue their ongoing momentum and post high-teens growth. Incremental growth is anticipated from the food and beverages segment, with foods projected to grow in strong double digits and beverages expected to achieve early teens growth. The sequential growth for beverages, which recovered after three years of muted performance, is on the back of a wider range of formats and price points in a favourable season.
As reported by Business Standard, the company faces continued inflationary pressures, particularly for HPC and OTC & ethicals segments. Despite operating profit margin impacts, Dabur has offset these pressures through calibrated price increases and ongoing cost-saving initiatives. Nuvama Research expects gross margin to decrease 344 basis points YoY to 46% and operating profit margin to fall 62 basis points YoY to 17.8%, though calibrated pricing actions helped maintain stable operating margins. Brokerages expect operating profit growth to be similar to Q1 levels, with margins expected to moderate YoY. While input cost pressures will hit profitability in the quarter, the impact is expected to be partially offset by price increases and cost controls.
According to Business Standard, analysts led by Abneesh Roy have retained a buy rating with an unchanged target price of ₹620. Nomura Research also maintains a buy rating with a target price of ₹625, with analysts Mihir P Shah and Riya Patni noting that the business has started to show sequential improvement and has a soft/favourable base in coming quarters. The stock is currently trading at about 27 times its FY28 earnings estimates and has lost about a quarter of its value over the last year. The stock is currently trading more than two standard deviations below its medium-term average, which provides comfort for investors. The positive outlook reflects Dabur's strong brands, distribution strength, and unique portfolio in Ayurveda.
