Dabur India — Q1 FY26 earnings call

Call held 31 Jul 2025

Management summary

Dabur India reported a mixed Q1 FY26, with reported consolidated sales growing 1.7% due to adverse weather impacting seasonal products. However, underlying business, excluding seasonal items, grew approximately 7%, driven by strong international performance and robust domestic HPC and Home Care segments. The company achieved significant market share gains in key categories and maintained operating margins despite inflationary pressures, reflecting strong brand resilience and effective cost management.

Highlights

  • Consolidated sales growth of ~7% excluding the seasonal portfolio, indicating underlying strength.

  • International business showed strong growth of 13.7% in constant currency and 12.7% in INR terms.

  • Domestic HPC portfolio grew 5%, driven by Toothpaste (7.3%) and Home Care (10%).

  • Key healthcare brands like Chyawanprash grew 28% and Honitus grew 46%.

  • Operating profit and PAT grew ahead of the topline, demonstrating resilience and effective saving initiatives.

Concerns

  • Reported consolidated sales growth was only 1.7% due to unseasonal rains impacting the seasonal portfolio (beverages and glucose), with glucose declining ~30%.

  • Gross margins faced pressure from competitive intensity, leading to higher netting of schemes (BTL) in Ind AS, though IGAAP gross margins remained stable.

  • Lal Tail business experienced market share loss in UP and Bihar due to a new local player.

Key financials

  1. Revenue Growth (reported) 1.7%
  2. Revenue Growth (ex-seasonal) 7%
  3. International Business Growth (constant currency) 13.7%
  4. Domestic HPC Growth 5%
  5. Home Care Growth 10%
  6. Overall Volume Growth -1%
  7. Price Increase 3%
  8. Net Realization (India) -1.8%

What they filed

Q1 FY27: revenue up 10.5%, net profit up 15.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,029 3,355 2,830 3,405 3,191 +5%3,559 +6%3,038 +7%3,764 +11%
EBITDA553 682 427 667 588 +6%734 +8%461 +8%741 +11%
Net profit418 516 313 508 445 +6%554 +7%362 +16%586 +15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Domestic Business (ex-seasonal)
    4.3% Revenue Growth
  • International Business
    13.7% Revenue Growth (constant currency)12.7% Revenue Growth (INR terms)
  • HPC Portfolio
    5% Growth
  • Toothpaste Portfolio
    7.3% Growth
  • Home Care Portfolio
    10% Growth
  • Skincare Portfolio
    9% Growth
  • Hair Oil
    19% Volume Market Share214 bps Market Share Gain
  • Healthcare Portfolio (ex-glucose)
    9% Growth
  • Chyawanprash
    28% Growth111 bps Market Share Gain
  • Honey
    11% Growth46 bps Market Share Gain
  • Glucose
    -30% Decline118 bps Market Share Gain
  • Digestives Portfolio (Hajmola franchise)
    9% Growth
  • Pudin Hara
    7% Growth
  • Honitus
    46% Growth
  • Health Juices
    18% Growth
  • Real Activ franchise
    20% Growth
  • J&N Segment
    207 bps Market Share Gain (nectars)141 bps Market Share Gain (100% juices)

Guidance & targets

Revenue

  • Full Year FY26 Growth Revenue · FY26 · Medium confidence high single-digit
    Yes, so we are expecting, I think you are talking about the guidance going forward for the full year. Full year, we are looking at a guidance of high single-digit kind of a growth for the full year.

    — Mohit Malhotra

  • Q2 FY26 Overall Growth Revenue · Q2 FY26 · High confidence double-digit growth
    But we will definitely expect double-digit growth, we are gunning towards double-digit growth in the 2nd Quarter.

    — Mohit Malhotra

  • Q2 FY26 Beverage Business Growth Revenue · Q2 FY26 · High confidence low single-digit growth
    Beverage business will be low single-digit growth only in the coming quarter.

    — Mohit Malhotra

  • Q2 FY26 Other Verticals Growth Revenue · Q2 FY26 · High confidence double-digit growth
    So, I have no doubt about other two verticals having double-digit growth.

    — Mohit Malhotra

Margin

  • Full Year FY26 Operating Margin Margin · FY26 · Medium confidence inch up significantly
    For the full year, we want our operating margin to only inch up significantly as compared to last year to this year.

    — Mohit Malhotra

Inventory

  • Inventory Levels Inventory · Ongoing · High confidence 21 to 22 days
    We are sitting at around 21 to 22 days depending on product category inventory. And we think that with our diversified portfolio and the seasonality that we have, this is the optimal level of inventory, and the stockiest are also making good ROI. While we are conducting the GTM exercise, which will be all about consolidation, increasing span of control, etc., but the inventory levels will be very similar.

    — Mohit Malhotra

Ad Spend

  • Advertising and Promotion Expenditure Ad Spend · Ongoing · Medium confidence increasing
    So, we will continuously make an endeavor to increasing the overall advertising and promotion expenditure going forward by investing in brand and distribution.

    — Mohit Malhotra

Healthcare Brands

  • Hajmola Revenue Target Healthcare Brands · Ongoing · Medium confidence Rs. 550 crores
    And we want to all scale them up to around Rs. 100 crores each and Hajmola moving up to around Rs. 550 crores.

    — Mohit Malhotra

  • Pudin Hara, Health Juices, Shilajit Revenue Target Healthcare Brands · Ongoing · Medium confidence Rs. 100 crores each
    Those four brands are Pudin Hara, Health Juices, Hajmola and Shilajit. And we want to all scale them up to around Rs. 100 crores each and Hajmola moving up to around Rs. 550 crores.

    — Mohit Malhotra

What to watch in Q2 FY26

Q2 FY26 Overall Growth

next quarter
Current 1.7% (reported Q1 FY26)
Target double-digit growth

Why it matters

Verifies if Dabur achieves its short-term growth target, indicating demand recovery and execution effectiveness.

But we will definitely expect double-digit growth, we are gunning towards double-digit growth in the 2nd Quarter.

Risks & concerns

  • Unseasonal Rains and Short Summer

    medium

    Impacted seasonal portfolio (beverages, glucose) in Q1 FY26, leading to lower reported growth.

    Management acknowledged

  • Competitive Intensity

    medium

    Led to higher netting of schemes (BTL) in Ind AS, impacting gross margins, especially in Toothpaste and Hair Oils.

    Management acknowledged

  • Inflationary Pressures

    medium

    Projected ~8% inflation going forward, particularly in edible oils, posing a challenge to margins.

    Management acknowledged

  • Localized Market Share Loss

    low

    Lal Tail business lost market share in UP and Bihar due to a new local player, which management plans to correct.

    Management acknowledged

Q&A highlights

7 direct
Disclosure Standards Partial
So, we have streamlined certain disclosures in the Investor Presentation. But this has been based on benchmarking with industry peers. This helps avoid excessive details that would pose any kind of competitive sensitivity. And we also remain committed to transparency and consistency.

Analyst expressed concern over reduced disclosures compared to historical practices, indicating a potential transparency issue for investors.

Asked by Mihir Shah

Q2 FY26 Growth Expectations Direct
But we will definitely expect double-digit growth, we are gunning towards double-digit growth in the 2nd Quarter. So, I think we are observing the situation. Beverage business will be low single-digit growth only in the coming quarter. Rest of the businesses should fire at double digits to your point.

Directly addresses the short-term growth outlook for the next quarter, providing specific targets for overall and segment-wise performance.

Asked by Mihir Shah

Gross Margin Pressure and Inflation Direct
Our gross margins have not got diluted in the previous quarter because the IGAAP gross margins remain the same. Because of the competitive intensity, there was a higher netting of schemes. Because of competitive intensity from Colgate and in Hair Oils, we had to give a lot of BTL which got netted off from the top line, and therefore, you see a gross margin dilution in the Ind AS number. But overall, operating margin has been maintained at the same level, and so we don't see any gross margin pressure. For the full year, we want our operating margin to only inch up significantly as compared to last year to this year.

Clarifies the impact of competitive intensity on gross margins (Ind AS vs IGAAP) and management's strategy to mitigate future inflation through price increases and saving initiatives.

Asked by Mihir Shah

Ad Spend and Operating Margin Direct
The overall advertising and promotion expenditure has actually moved up ahead of the top line and that is in the range of around 5% growth. We have redirected the money from ATL into BTL. As I have told you earlier as well, that depending on the competitive intensity, the trade inputs (consumer and trade scheme) are given. So, we have invested more in consumer and trade & that is why the netting is more and less spends have been done on media.

Explains the apparent decline in ad spends, attributing it to a shift from ATL to BTL activities due to competitive intensity, impacting the reported operating margin.

Asked by Mihir Shah

Long-term Healthcare Portfolio Growth and Relevance Direct
So, I don't think there is any problem. And glucose was also cycling a very high base of 31% and now declined by 30% because of rains and very centric. So, that is the only outlier here. Otherwise, I think Healthcare is on a very strong trajectory of growth. So, I don't think there is any concern on this thing.

Analyst questioned the long-term growth and relevance of the Healthcare portfolio post-COVID, prompting management to defend its strategy and highlight specific brand performances and modernization efforts.

Asked by Prakash Kapadia

Volume vs Price Growth Breakup Direct
Yes, so basically volume is low single digit, around minus 1% and price increase was 3%. But most of it got negated because of heightened competitive intensity. And therefore, the net realization was minus 1.8% in India.

Provides a crucial breakdown of revenue growth drivers, indicating that overall volume declined while price increases were largely offset by competitive intensity impacting net realization.

Asked by Aditya Vikram

Future Price Hikes and Inflation Direct
Yes, so what we are seeing is more inflationary pressure, especially in the edible oils category. And consequently, we have either taken fresh price increases, apart from the rollover price increases, or heightened our saving initiatives program going forward as well. So, we expect that at least before netting, we would be able to protect our margins despite 7% to 8% inflation.

Indicates management's strategy for managing future inflationary pressures, combining price increases with saving initiatives to protect margins.

Asked by Aditya Vikram

Strategic Framework for Next 2-3 Years and M&A Direct
Yes, so as you know, we conducted a vision exercise recently, and there are seven big moves that I communicated also. The first one is to double down on our Core brands which contributes to around 60%-70% of the business, which are Rs. 700 crores plus, which will contribute to our growth. And we are spending 70 bps higher in the first quarter also investment, which is Oral Care, which is Dabur Red, and we are planning to launch Dabur Red to other benefit gaps which are there in the segment.

Elicits management's long-term strategic framework, including focus on core brands, portfolio modernization, and M&A strategy targeting wellness and margin-accretive brands.

Asked by Tejas Shah

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Impacted by Seasonal Factors

Dabur India reported a consolidated sales growth of 1.7% for Q1 FY26, significantly impacted by unseasonal rains and a short summer. This adverse weather particularly affected the seasonal portfolio, leading to a ~30% decline in glucose sales. However, excluding the seasonal portfolio, consolidated sales growth stood at approximately 7%, indicating underlying business resilience despite these challenges.

Robust Domestic and International Business Growth

The international business demonstrated strong performance, growing 13.7% in constant currency and 12.7% in INR terms. Domestically, the HPC portfolio grew 5%, with the Toothpaste segment achieving 7.3% growth, driven by the Red franchise. The Home Care portfolio also delivered robust growth of 10%, with Odonil emerging as the #1 brand in air fresheners with a 44% volume market share, and Odomos showing double-digit growth.

Strong Market Share Gains Across Key Categories

Dabur achieved notable market share gains in several core categories. Hair Oil saw a 214 bps gain, reaching 19% volume market share. In the Healthcare portfolio, Chyawanprash grew 28% and gained 111 bps market share, while Honey grew 11% with a 46 bps market share gain. The J&N segment also outperformed, gaining 207 bps in nectars and 141 bps in 100% juices, reinforcing the company's competitive position.

Profitability Maintained Amidst Inflation and Competition

Despite high inflation and competitive intensity, Dabur's operating profit and PAT grew ahead of the topline. Management noted that IGAAP gross margins remained stable, but competitive pressures, particularly from Colgate in Toothpaste and Hair Oils, led to higher netting of schemes (BTL), impacting Ind AS gross margins. The company has implemented 3-4% price increases and saving initiatives to mitigate a projected 8% inflation going forward, aiming to protect margins.

Strategic Focus on Core Brands and Portfolio Modernization

Dabur outlined a strategic framework focusing on doubling down on core brands, contemporizing Dabur Amla, and expanding the home care segment. In Healthcare, four brands—Pudin Hara, Health Juices, Hajmola, and Shilajit—are targeted for significant scaling, with Hajmola aiming for Rs. 550 crores and the others for Rs. 100 crores each. The company is also actively scouting for new-age, margin-accretive M&A targets in wellness, health, and premium segments to fortify its portfolio.

Outlook for Q2 FY26 and Full Year FY26

For Q2 FY26, Dabur anticipates achieving double-digit growth, with other verticals expected to fire at double digits, although the beverage business is projected to see only low single-digit growth. For the full fiscal year 2025-26, the company is targeting high single-digit growth. Management is committed to ensuring that operating margins 'inch up significantly' compared to the previous year, driven by premiumization and a better product mix.

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