Dabur India — Q2 FY26 earnings call

Call held 30 Oct 2025

Management summary

Dabur India reported a resilient Q2 FY26, with consolidated revenue up 5.4% and PAT up 6.5%, driven by strong performance in HPC and Healthcare. Despite temporary GST-related trade disruptions and weather impacts, the company maintained margins and launched Dabur Ventures for digital-first brands. Management anticipates a recovery in demand and positive impact from GST in the long term.

Highlights

  • Consolidated revenue grew by 5.4% year-on-year, with India FMCG business growing at 5.7% and international business at 7.7% in INR terms.

  • Operating profit grew by 6.4% and PAT grew by 6.5%, outpacing revenue growth despite GST transition and inflation.

  • HPC portfolio performed well with 8.9% growth, driven by a robust 14% growth in the Toothpaste segment.

  • Honey recorded a broad-based volume net growth of 28% year-on-year, and Honitus also grew strongly by 28%.

  • Gross margins improved by 20 basis points year-on-year, and operating margins were around 19% broadly for H1 FY26.

Concerns

  • Temporary disruption in trade due to GST rate reductions, leading to a short-term moderation in sales in September, with an estimated impact of ~₹100 crore (3-4% of sales).

  • Nectar sales were impacted by heavy monsoons and floods across several regions.

  • Geopolitical disturbance in Nepal led to a 15% decline in the Nepal business, and US tariffs impacted Badshah exports.

  • Inverted duty structure presents a challenge, with an input tax credit gap of 1.25-1.5% (input 8-8.5% vs. output 6.5-7%).

Key financials

  1. Consolidated Revenue Growth 5.4% +5.4%YoY
  2. Operating Profit Growth 6.4% +6.4%YoY
  3. PAT Growth 6.5% +6.5%YoY
  4. India FMCG Growth 5.7% +5.7%YoY
  5. International Business Growth (INR) 7.7% +7.7%YoY
  6. International Business Growth (CC) 5.5% +5.5%YoY

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

  • HPC Portfolio
    8.9% Growth
  • Toothpaste Portfolio
    14% Growth
  • Hair Oil Portfolio
    232 bps Market Share Gain
  • Home Care Portfolio
    mid-single-digit % Growth
  • Odonil
    127 bps Market Share Gain
  • Health Supplements
    mid-single-digit % Growth
  • Honey
    28% Volume Net Growth
  • Honitus
    28% Growth
  • Ayurvedic Health Juices
    25% Growth
  • Real Activ 100% Juices
    45% Growth
  • Nectars
    115 bps Market Share Gain
  • Activ Juices
    1,000 bps Market Share Gain
  • Nepal Business
    15% Decline
  • Gross Margin
    20 bps YoY Improvement
  • Operating Margin (H1 FY26)
    19% Value

Capital allocation

high confidence
  • M&A Digital-first businesses Acquisition · Announced · Consideration ₹[object Object] (undisclosed)

    To make focused investments into high potential new age digital-first businesses that are closely aligned with our strategic vision roadmap, enhancing premiumization and expanding into new consumer spaces.

    Intended to acquire minority/majority stakes in digital-first brands to harness growth.

    We are pleased to announce the launch of Dabur Ventures with capital allocation of INR 500 crores over the next few years. With this, we intend to make focused investments into high potential new age digital-first businesses that are closely aligned with our strategic vision roadmap. This initiative reaffirms Dabur's commitment to driving innovation-led growth, enhancing its premiumization agenda, and expanding participation in new consumer spaces that represent the categories of tomorrow.
  • Liquidity Cash ₹7,000 Cr The company has INR 7,000 crores in its balance sheet, indicating strong financial reserves.
    Just second part of the question to clarify, it doesn't exclude other M&As like Badshah, Balsara, Sesa etc. It does not preclude that. So, we have got INR 7,000 crores in our balance sheet.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · H2 FY26 · Medium confidence mid- to high-single-digit
    So, for the balance of the year we look at mid- to high-single-digit growth backed by low to mid volume growth. We don't want to promise high single here. That is the kind of guidance that we are looking at going forward for the next half of the year.

    — Mohit Malhotra

Volume

  • Volume Growth Volume · H2 FY26 · Medium confidence low to mid single digit
    Yes, so mid to high single digit growth is for the second half actually. That is the guidance that we have given. This will be backed by volume growth of around low to mid single digit.

    — Mohit Malhotra

Capital Allocation

  • Dabur Ventures Investment Capital Allocation · next few years · High confidence INR 500 crores
    We are pleased to announce the launch of Dabur Ventures with capital allocation of INR 500 crores over the next few years.

    — Mohit Malhotra

Profitability

  • Margins vs. Top Line Profitability · full year · Medium confidence better than top line
    So, I think for the full year, our margins will definitely be better than the top line.

    — Mohit Malhotra

Inflation

  • Inflation Rate Inflation · Q3 · Medium confidence 7%
    The pricing will not lap over. Pricing will carry forward in Quarter 3 also. We expect inflation of 7%.

    — Mohit Malhotra

What to watch in Q3 FY26

GST Impact Normalization

next quarter
Current Carry-forward impact in early October, inventory flushing ongoing
Target Full normalization of trade and inventory

Why it matters

Normalization of trade channels post-GST is crucial for sales velocity and volume growth.

I am sure the liquidation of inventory has happened. We have been monitoring, liquidation of inventory is happening. So, the impact wasn't restricted to only September. There will be a carry forward impact in the month of October, and I think first 15-16 days of October will also be impacted due to the GST.

Risks & concerns

  • GST Transition Disruption

    medium

    Temporary disruption in trade and sales moderation in September due to anticipated GST rate reductions, with a carry-forward impact into October.

    Management acknowledged

  • Inverted Duty Structure

    medium

    A 1.25-1.5% gap between input tax rate (8-8.5%) and weighted average output (6.5-7%) creates an issue for input tax credit accumulation, potentially leading to price increases if unresolved.

    Management acknowledged

  • Weather Impact on Nectar Sales

    low

    Heavy monsoons and floods in key regions negatively impacted Nectar sales during the quarter.

    Management acknowledged

  • Geopolitical Disturbances

    low

    Geopolitical issues in Nepal led to a 15% decline in business, and US tariffs impacted Badshah exports, though situations are improving.

    Management acknowledged

  • Chyawanprash Old Inventory

    low

    Trade holding old season inventory for Chyawanprash, causing initial hiccups in loading new stock.

    Management acknowledged

Q&A highlights

6 direct
GST Impact and Normalcy Direct
Abneesh, GST impact is in the range of around Rs. 100 crore, give or take for us, which is in the range of around 3% to 4% for us. And since the GST announcement, that is where the primary got impacted and therefore the volume sales got impacted of the business. ... But long term, I think GST has been very transformative for the country and it will unleash volume growth which are much better than what we have seen in the past and has more money in the hands of the consumer.

Management quantified the immediate financial impact of GST on sales and provided a long-term positive outlook, clarifying the temporary nature of the disruption.

Asked by Abneesh Roy

Categories Benefiting from GST Cut Direct
The categories which I think will get favorably impacted first of all would be oral care in my view, I think that will be a big upside. Shampoos would be a good upside. Hair oil should gain on account of this. In health care, our Ayurvedic proprietary branded medicine should gain because the rate has come down from 12% to 5%.

Identified specific product categories expected to see significant volume uptake due to GST rate reductions, indicating future growth drivers.

Asked by Abneesh Roy

Competition from Campa Cola and Dealer Incentives Partial
With the GST reduction, the RPI is coming down. Therefore, the juices will become more affordable relative to the beverages. So, it should provide a little bit of tailwind to our beverage portfolio. ... As far as incentive is concerned, regarding what the Reliance team is offering as an incentive to the trade. We also have greased up the trade in terms of the incentives that we are giving and we hope that we will be able to bridge the gap not totally, but to a certain extent.

Addressed competitive pressures in the beverage segment and outlined strategies, including leveraging GST benefits and offering trade incentives, to counter competition.

Asked by Abneesh Roy

Toothpaste Performance and Inverted GST Duty Structure Direct
Herbal category has grown at 10%, so actually almost a 5x higher growth. And the Herbal category now from 30% has become actually 32%. ... input tax credit will be an issue for us. ... Weighted average output would be at around 6.5% to 7%, while we estimate our input tax rate to be at around 8% to 8.5%. So, there is a gap of 1.25% to 1.5% which will get accumulated.

Provided detailed performance metrics for the toothpaste segment, highlighting the strong growth of herbal variants, and acknowledged the challenge of the inverted GST duty structure with specific figures.

Asked by Abneesh Roy

Post-October Volume Improvement and Inventory Liquidation Partial
As I told you that this will carry forward for 15-20 days. So, a little bit of improvement will be there due to the festive season, I think, but it is still a wait and watch situation. I will not say that all the inventory of the old price stock has been flushed out in the system because there is a huge inventory.

Clarified that the GST-related disruption extended into October and that inventory liquidation was still ongoing, suggesting a gradual rather than immediate recovery.

Asked by Mihir Shah

Chyawanprash Sales and Revival Strategy Direct
So, I think Chyawanprash had got impacted a couple of years ago due to the season, and the winter season has been contracted. ... we have launched a couple of variants to make Chyawanprash all-season brand. ... We launched Khajurprash especially for women, and that has done exceedingly well in the marketplace. Our sugar free Chyawanprash is again doing very well in the market.

Explained the reasons for past underperformance in Chyawanprash and detailed the multi-pronged strategy, including new variants and marketing, to revive growth.

Asked by Mihir Shah

Winter Loading Timing and Impact Direct
So, winter loading actually got pushed out because GST transitions were happening from Quarter 2 to Quarter 3. And as we speak, as I told you, we are doing the winter loading. Winter portfolio, a significant part of our portfolio, in Quarter 3. So, if the winter is going to be harsh, we expect this quarter to be good relatively as compared to what we saw in the past.

Provided clarity on the shift in winter product loading from Q2 to Q3 due to GST, indicating potential for strong Q3 performance if winter conditions are favorable.

Asked by Mihir Shah

Dabur Ventures Strategy and Investment Focus Direct
The Rs. 500 crore outlay that we kept for the next couple of years, and the Rs. 500 crore is meant for digital-first brands, which are future forward-looking brands, so that we can get high growth and we can extend our portfolio into the new age categories of the future. ... We will restrict ourselves to home and personal care, health care, wellness foods and beverages and also adjacencies of these categories.

Detailed the strategic intent and investment focus of Dabur Ventures, emphasizing entry into digital-first brands within existing categories and adjacencies to drive premiumization and cater to new consumer segments.

Asked by Mihir Shah

2 min read 7 chapters

Detailed narrative

Q2 FY26 Performance Overview and GST Impact

Dabur India reported a consolidated revenue growth of 5.4% year-on-year for Q2 FY26, with India FMCG business growing at 5.7% and international business at 7.7% in INR terms. Operating profit grew by 6.4% and PAT by 6.5%. The quarter was marked by a landmark GST reform, which, while structurally positive, led to a temporary trade disruption and moderation in sales in September, with an estimated impact of approximately ₹100 crore (3-4% of sales).

Category-wise Growth Drivers

The HPC portfolio delivered strong performance with 8.9% growth, notably driven by a 14% increase in the Toothpaste segment, led by Dabur Red and Meswak. The herbal segment outpaced non-herbal by 770 bps. In Healthcare, Honey recorded a robust 28% volume growth, and Honitus also grew by 28%. The Juices and Nectars portfolio saw 'Real Activ' 100% juices grow by 45%, despite Nectar sales being impacted by heavy monsoons.

Rural and Urban Market Strategies

The company observed sustained resilience in rural markets, growing at 8.5%, compared to urban growth of around 3%. Dabur is capitalizing on rural tailwinds through LUP bundles, distribution expansion, and increased visibility. For urban markets, the focus is on premiumization across categories like Chyawanprash (new variants), hair oils (value-added products), and wellness foods, targeting the Gen Z and Gen Alpha consumer cohorts.

Dabur Ventures for Digital-First Brands

Dabur announced the launch of 'Dabur Ventures' with a capital allocation of INR 500 crores over the next few years. This initiative aims to invest in high-potential, new-age, digital-first businesses that align with Dabur's strategic vision. The goal is to drive innovation-led growth, enhance premiumization, and expand participation in new consumer spaces, potentially through minority or majority stake acquisitions.

Margin Management and Inflationary Environment

Despite an inflationary environment, with approximately 8% inflation faced in H1 FY26, Dabur managed to expand gross margins by 20 basis points year-on-year. Operating margins for the first half remained around 19%. The company implemented a 5% price increase and executed saving initiatives totaling around ₹60 crores in H1, contributing to profitability that grew ahead of the top line.

Challenges from Inverted Duty Structure and Geopolitics

A key concern highlighted was the inverted GST duty structure, resulting in a 1.25-1.5% gap between input tax rates (8-8.5%) and weighted average output rates (6.5-7%), leading to input tax credit accumulation. Geopolitical disturbances also impacted performance, with the Nepal business declining by 15% due to protests and US tariffs affecting Badshah exports, though these situations are showing signs of improvement.

Chyawanprash Revival and Winter Loading

Chyawanprash sales were impacted by a contracted winter season and trade holding old inventory. To revive the category, Dabur has launched multiple variants like Khajurprash for women and sugar-free Chyawanprash, with plans for gummies and bars. Winter loading, typically a Q2 activity, was pushed to Q3 due to GST transitions and is currently ongoing, with expectations of a strong Q3 if the winter is harsh.

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