Dabur India

The stock yesterday ended the day in the red on the back of its not-so-good Q3 performance. Though its consolidated net revenue rose much higher than estimates at Rs.1904 crore, up 17% (YoY), its net profit came in much below expectations at Rs.244 crore, up 16% and this was reason enough for the stock to tumble into the red. High employee cost, up 29% and higher advertising expenses, up 23%, squeezed the profits. EBITDA for the current Q3 rose 8% at Rs. 298 crore but the higher costs left a telling effect on the margins – operating margins came in at 15.6%, down 120 bps.

Its Health Supplements business was a key driver of growth during the quarter, reporting a strong 19.5% surge. The Air Freshener business, under the brand Odonil, continued to surge ahead with an over 27%. Foods business also reported a robust near 18% growth, shampoo business rose 27%, toothpaste business grew 14% and skin care reported an over 13% growth during the quarter. Its international business grew 26%, led by strong performance in GCC, Egypt and Nigeria.  GCC business reported a 21% growth, while sales in Egypt and Nigeria both grew by 16%.