Dabur India (NSE:DABUR) Q1 2026 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 Results Investors Conference Call of Dabur India Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Sarawgi, Head, Investor Relations and M and A. Thank you, and over to you, sir. Good evening, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to the earnings conference call pertaining to the results for the quarter ended 06/30/2026.

0:50 Present here with me are Mr. Mohit Malhotra, Global Chief Executive Officer Mr. Rankush Jayan, chief financial officer Mr. Rajid Dalla, CEO of India Business. We'll start with an overview of the company's performance by Mr. Mohit Malhotra, and this will be followed by a q and a session. I'll now hand over to Mr. Mohit Malhotra. Thank you. Thank you, Rahul. Good evening, ladies and gentlemen. We welcome you to Dabur India Limited's conference call pertaining to the results for the quarter ended thirtieth June twenty sixth. The Indian consumption environment remained stable during the quarter despite weather related disruptions, inflationary headwinds, and geopolitical disturbances. Rural demand continued to demonstrate momentum, outperforming urban markets.

1:39 War related disturbances in The Middle East impacted input cost trends and supply chain efficiency across our businesses, including India. Despite the challenging environment in the quarter, our international business delivered double digit growth supported by proactive market interventions and agile execution. Against this backdrop, DABUR delivered a strong start to the year. During quarter one financial year twenty seven, our consolidated business grew by 10.6%, driven by broad based growth across both India and international businesses. India FMCG business revenue grew by 9.5%, backed by volume growth of five India percent. International business grew by 15.5% in INR terms.

2:29 Within the domestic business, HPC portfolio continued its strong momentum, recording a 12.3 growth. Our hair care business, including hair oils and shampoos, registered strong double digit growth. Hair oil portfolio grew in high teens year on year with both perfume and coconut oil growing in double digits. We outpaced category growth and gained 102 basis points in market share. The shampoo portfolio delivered strong double digit growth during the quarter. During this period, Vartika launched Bio Infusions range, India's first new added salt shampoo range, reflecting our commitment to science backed innovation and evolving consumer preferences.

3:15 We continue to drive growth through a combination of premiumization, innovation, and expanded participation in high growth segments across both hair oils and shampoos. The oral care portfolio delivered near double digit growth led by strong momentum across the red franchise, Misswak, and the Dabur herbal range. Also posted a double digit growth during the quarter. Consumer preferences for Ayurvedic herbal and natural oral care solutions continue to strengthen with herbal segment outperforming the nonherbal segment by 550 basis points. Supported by our strong portfolio in this category, we outperformed the overall toothpaste market growth and further strengthened our market share position.

4:05 Skincare portfolio registered a high single digit growth driven by Gulaburi franchise and Oxylife. The Oxylife DTAN range continues to gain traction among the consumers, reflecting the relevance of our premium skincare offerings. The home care portfolio delivered mid single digit growth led by Odunil and Sunny Fresh. Odunil, despite shortages in RM availability, posted a high single digit growth during this quarter aided by strong momentum in aerosols and zippers, translating into market share gain of around 80 BPS. Our recently launched camphor cones and craft fresheners have also witnessed encouraging consumer acceptance. Sunny Fresh continued the strong momentum, delivering a growth in high teens.

4:51 In our health care portfolio, health supplements grew in low single digits. Honey performed very well with a high single digit growth resulting in gain in market share of 150 bps. Premium variants like Sundarbans and organic honey witnessed good growth. Glucose portfolio was marginally impacted during the quarter on account of unseasonal rains at the beginning of the quarter and has since seen strong recovery in the second half of the quarter. In the digestive portfolio, Pudin Hara franchise registered a double digit growth. Recently launched Pudin Hara five in one has also witnessed encouraging consumer response. Our Jhula franchise registered a near double digit growth supported by packaging refresh across the portfolio.

5:39 E sub gold registered a strong double digit growth. Within OTC and ethical, Haritas registered a strong double digit growth of 25% driven by targeted media campaign reflecting and highlighting safety and efficacy. Health users continued on a strong trajectory and grew in mid twenties. Our recently launched new age nutraceutical brand, Signs, grew three x during the quarter. Our food and beverage portfolio registered a high single digit growth Despite unseasonal rains in the beginning of the quarter impacting April, our beverage portfolio made a strong comeback in May and June with mid teens growth. Our premiumization strategy continued to deliver strong results with active juices growing by over 40% and coconut water registering a growth of over 70% during the quarter.

6:32 We continue to outperform the category, gaining around 600 bps market share in active juices and three forty four bps in coconut water. Our foods business continued strong double digit growth of around 30%. Bacha business registered a volume led double digit growth. Coming to international business, despite continued import... Impact of war, we registered strong growth of 15.5% in INR terms. This was on back of around 9% growth in MENA region, 22% growth in UK, European Union, 28% growth in Egypt, 27% growth in Turkey, and 34% growth in Bangladesh. Coming to profitability now.

7:17 Despite elevated inflation across several input categories and continued cost pressures in most international markets, we delivered a healthy margin performance through a combination of portfolio premiumization, productivity improvement initiatives, and disciplined cost management. As a result, operating margin grew by 11% and profit after tax increased by 15%, both ahead of the top line, reflecting the strength of our brand portfolio, execution capabilities, and resilient business model. Looking ahead, while geopolitical developments in The Middle East continue to warrant a close monitoring, we remain confident of delivering a sequential acceleration in revenue growth. Stable consumption trends, our go to market transformation initiative, Saxham, focused investment in premiumization and innovation, and sustained brand building efforts position us well to drive profitable growth in the quarters ahead.

8:18 With this, I conclude my address and open the floor for any q and a. Thank you. Thank you very much. We will now begin the question and answer session. Session. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Agnes Roy with Nuvama. Please go ahead. Sure. Thank you. I have three questions. My first question is on Baartya.

9:05 So if you could tell us in the last few years since the acquisition, have you managed to add good presence in any new state? Because I understand at the time of acquisition, it was, I think, only two states. So if you could discuss expansion in any other states apart from that, are you happy with the performance? Because ideally, double digit volume growth for this kind of a business would have been a more desired number given it was in just a few states. So if you could tell us what else is needed, it's a good category, a lot of players have come in. Is there a differentiation issue because a lot of almost every listed food company has a presence in this. That is my first question.

9:51 Yeah. So hi, Abhish. I think our bacha business continues to trend well on a double digit growth trajectory backed by double digit volume growth in the domestic market and also international. I don't know whether you heard. Our Varcha business has actually grown by 13.3% backed by roughly around 11% kind of a volume growth, which is there in the domestic business. So we are pretty happy because there is no price increase here in Barcha. Most of the spices are actually deflationary, and all this growth is coming on back of volume. That said, the international business is also growing by more than 40% in Barcha. We were present... You're right. We were present in two states, Gujarat and Maharashtra. We've expanded beyond Gujarat and Maharashtra to MP, Rajasthan, and now to Delhi NCR.

10:37 So that significantly picked up, and there's a good traction that we are seeing despite taste being little disparate in these areas. But because of quick commerce and e commerce, I think the business is substantially picked up. Now the total contribution of ecommerce and quick commerce, which is helping us to taking the brand beyond these two states, is almost 6% of the overall turnover, and it is growing at triple digits ecommerce for us as we are listing in more and more dark stores. So we are very pretty happy with the Pasha performance. The margins have also expanded, and the growth continues on a double digit trajectory, which is what we had decided at the time of the acquisition. When we acquired, the business was roughly around $202.20.

11:26 $2.20 crores. Now the business is trending at around... Exit of around 400 odd crores. So I think pretty happy with the performance. Yeah. So thanks. I was also understanding that there's severe inflation, especially, I think, in Chile and some of other flavors. Maybe that's not too much relevant for your SKUs. My my second question is essentially on your two problem categories. So wanted to get more insights there. So, yes, I do understand April month was challenging. Yesterday, Varun Beverages also said that April month, their growth was flat and then spectacular recovery in May and June. But you also, I think, fit for your fruit juice business.

12:13 So here the question is, did glucose also see recovery in May and June, or is there a shift of customer because, obviously, glucose is pure sugar, and, obviously, not exactly great from a health perspective, and there are so many options of energy drink, this thing, that thing. Customers definitely has more options versus, say, five years back. So is there a structural worry for glucose? And did you see great recovery in May and June? I think that will answer whether there is a structural issue. And coming back to juice business, again, Campa Cola impact is very disruptive. Plus, I think in your packaging, I think there was a fruit juice overall, how how you can write 100% fruit juice and all that. So if you could tell us, is the big issue in the fruit juice growth now behind us? So can last two months growth be the new normal or still here every month, every quarter is a new time period to analyze?

13:08 Right. So on these two categories, glucose is a business, like you rightly said, which has bounced back after April. In May and June, we saw mid teens growth and high teens growth. Actually, both in glucose is also juices. So I think season plays a very big factor. As far as glucose is concerned, it's more of a rural consumption, and therefore sugar is not a issue. It's consumed for its BMS, and it's consumed for instant energy, especially when the summer and the heat is there. Out of home consumption is very high in terms of glucose, especially in rural areas of Bihar, West Bengal, Orissa, and that Hindi belt. And it continues to do well in the May and June. It's a mid double digit growth, and so is the case in juices.

13:55 And like I told you in juices, 100% juices grew by around 45%, and our coconut water grew at around 70%. Our fish portfolio also grew by around 30, 35% driven by as a brand and other portfolio. Nectar also turned profitable in the second half of the quarter when the summer actually started. So I don't think there's any problem in these two categories. It is a season in which plays have a... Can... That's why you saw overall food and beverage growth was around 8%. So... Which is pretty healthy and despite April not being very good.

14:41 So... And ex glucose are the health care also grew by roughly around seven percent. Yeah. So last question, essentially, Mohit. So if I see clearly, you have earmarked INR500 crores for D2C kind of acquisition. So what will be the time period for using that? Is there a frozen time period? Because this is slightly depending upon what is available, and this is obviously going to be up for negotiations, etcetera. And second is in terms of innovation, disruptive innovation, I'm not talking about regular brand extension. If you could give us what have been the big innovations which have...

15:28 Which you are quite happy with in the last, say, few quarters, disruptive innovations where you have also managed some level of scale currently. So... Right. So as you know, our acquisition strategy is two pronged. One is we get a foot in the door in new b two c players with a minority stake, work with the promoter, see the returns profitable, and once it turns profitable, then to a majority stake, and that's what we're doing. We're continuously on the lookout for acquisition targets, which are not obscenely expensive and which are making sense and which are synergistic to our entire portfolio. So that's what we look at. So we are continuously on the lookout as we speak. Also, we're talking to two or three companies.

16:13 And like you rightly said, while we have a target set for ourselves, then we have a vision period of around three years now. So in three years, we should be acquiring one or two companies which will be sizable, and that's the target that the management is actually taking. It all depends upon negotiations which actually happen because most of these d two c companies are in a process. And as a process, you participate in the bid, but you can't guarantee the success. So that's where you are. So while we have targeted ourselves, there's a commitment to do the number, but it all depends upon the negotiation. That's the first part of your question. As far as the second part of your question on disruptive innovation, I think we're very happy with the innovation that we've done in the health supplements and the nutraceutical space.

17:02 We launched a brand called the science, And last year was the first year towards the back end of the year we launched it. And we will see a exit of roughly around 50 odd crores of ARR that we will have at the end of the year with science. The brand is month on month doing well, and we are seeing it as a d to c disruptive health care play for us. This is the size innovation that we are doing in every respective category that we are present in, be it hair care, be it shampoos, be it home care, or be it skincare and honey, etcetera. So those innovations to extend the life cycle of the brand and to bring in new news is happening, but this is one that I can definitely call out as the disruptive one at times.

17:52 Sure. One last follow-up, Mohit. Is Hajid... Mister Hajid Bala there on the call? If he's there in the first few months. Sure. Sure. You wanna you wanna say hello and you would tell it was up and you can hear it from the horse's mouth. So he's right here with us. I Yeah. Three months of work. Abhay, Abhay, what is the initial analysis? What are you seeing as strong points? What can be the areas of improvement? What will be the framework? What will be the focus areas? If you can highlight three months in a short time, but you come from extremely strong pedigree of Unilever, Hershey's, etcetera. So if could tell us what are your initial thoughts?, hi. And, firstly, thank you for the warm welcome. It feels very great speaking to all of you.

18:41 Yes. Closing in on three months and delighted to be part of this iconic organization. And at this stage, the focus has been completion of induction, a lot of listening, a lot of learning, a lot of connecting with people across the board. Right? And my take on strengths is is very similar to what we would see the other as iconic brands. The the distribution might... That is a strong moat for us. The the passion of the people and the love trust or of the consumers are clearly something that has stood to us in good stead.

19:38 I'd I'd also say that it's been a good first quarter of my journey here. The results that are being shared are reflecting the consistency almost of the last three quarters. So at this stage, this is what I would be happy sharing and would look forward to coming back and talking in more detail later in the year. So thanks, Amit. Thanks, Mohit. All the best. Thank you. Thank you. Thank you, Abhish. Thank you. Thank you, Ajith. Yeah. Thank you. Our next question comes from the line of Aditya Soman with CLSA. Please go ahead. Yes. Hi. Good evening, and thanks for the opportunity.

20:25 Two questions here. So can you give us a sense of the volume growth in the sort of hair oil business and how that shapes up just given very sharp inflation in prices there? And secondly, going forward, as the sort of base gets tougher, what sort of growth do you expect for the rest of fiscal twenty seven? Thanks. Alright. Hi,. So I think here all business has been showing very good traction since couple of quarters. I think... Hello? Am I audible? Yes. You are. Thanks, Bhut. Yeah. So here all business has showing great progress, and I think all sub segments of heroin are doing well. So both coconut oils, perfumed oils, value added almond oils, and our flanker brands of Amla, all have shown a double digit growth on value.

21:19 Partly is coming out of the GST price... GST driven pricing fees and inflationary price increases. And there's a 8% volume growth, which is backing this growth of around 18% in overall hair oil. So 50% growth is coming out of volume and 50% is coming out of price because price increase was imminent because of the LLP prices moving up. It's all crudely. So we had to take up these prices. So we've taken it up. The table has gone up. And we are confident of having a double digit growth in hair oils also going forward in the next quarter, and subsequent quarters will also follow. So that's as well as the hair oil is concerned. Our entire campaign of shampoos, the Pele oil and g is working very well and... Which is where is there. So we are seeing good trial generation, market share increase of 107 basis point, penetration moving up. So all parameters in terms of hair oils, whether it is the household panel or Nielsen or, you know, all of the numbers are trending up well. In the Hindi belt, we are only number two hair oil penetrated brand. Almost every second household in the Hindi belt is now Dabur hair oil user.

22:41 So that's a very big news in terms of hair oils for us. So on the business projection for balance of the year, we had taken a target of a double digit growth in the current year, and we maintain that we will have a double digit growth in the current year revenue. And while the inflation is really impinging on us, but we feel that our brands have got strength to pass on this inflation in terms of price increases to the consumer. But we are vigilantly watchfully watching this whole Middle Eastern war situation to see that inflation... Steps are taken to mitigate the inflation. So we're confident that our margins are better than last year and should be accretive to our top line growth also.

23:31 So... Yeah. No. Thanks, No. No. Thanks, Mohit. Mohit. I'm very clear on the ambition, and and that's great. Just just to double click on that double digit growth, this would be for both India business and the consult business or at a consult level? No. No. I'm talking at the consult level. But for India and console... Sir, I'm talking about console, double digit growth console for the full year. Because, you know, we got a little tailwind on international business in the sense of currency also. There's a dollar denominated market of Middle East, which gives us a currency upside in India. So that's the icing on the cake here. So... Yeah. Very clear. And thanks for taking that question. All the best. Thank you. Thank you. Our next question comes from the line of Prakash Kapadia with Kapadia Financial Services.

24:28 Please go ahead. Yeah. Thanks for the opportunity, Mohit. Two questions from my end. You know, we've seen a 15% plus growth for the second quarter in a row. So congrats for that. So given whatever we are reading on monsoons, what is the outlook on the India business? Because half of the country in terms of districts are below normal skill in monsoons, and half of them are positive. So what is the outlook as we move forward? And secondly, you know, if I look at, you know, our liquid cash and investments, they are 9,500 crores. So this is, you know, been piling up. So, obviously, we we don't... You don't pay out over the last two years.

25:16 So any thoughts on capital allocation, returning it back, or some quick bank acquisition? These are my two questions. Thank you. Alright. As far as the monsoon in Al Nino is concerned, there was quite a lot of concern that there will be a deficit rainfall, and therefore, output will get impacted. And therefore, the income of farmers and therefore rural growth would be little tepid. But what we've seen on the ground is in the last fortnight, a lot of monsoon deficit has actually got covered up, I think, with a lot of rain, which we have seen. So I think there's actually a 14, 15% deficit only as far as the rain is concerned, which augurs very well for the tariff growth season.

26:03 And I don't think so it's gonna impact so much. And what we have seen in past one quarter, rural continues to be resilient, and rural is growing ahead of urban at 170 basis points for the new service category. And also for us, as well as our business is concerned, we have a rural growth of around 550 basis points, which is ahead of the urban growth. And I'm only taking GP. If I take, obviously, modern day and ecommerce is completely urban, I'm not taking that. So rural is pretty resilient and so is urban resilient. So there is no portion that we see in our numbers and what the market is telling us from a DABUR system. And on the eastern point of view, also rural is trending up. So while the inflation is picking up, that's a little concern, but government is offering a lot of swaps in terms of MSPs.

26:55 And I think we should be able to navigate the the season and the full year also on Okay. Back of good rural and also decent urban growth. Yes. Okay. --. No. You you had something, Prakash? Yeah. You Yeah. Yeah. So on capital allocation, you know, I see cash and investments of, I think, 9,500 crores on the balance sheet. And, you know, current market share is around 77,000 crores. So any strategic direction to capital allocation? Because, you know, there's a large sum on the balance sheet, and there has been lines. So can we put it to work? And then we... You know, more payouts. Obviously, we've increased dividend payouts over the last two years to 75% of that. But still, you know, there's a lot of gap given the current market cap. So any thoughts on that?

27:49 Yeah. Sure,. You know? So we are approximately sitting at almost 9,000 crores cash set, and out of that, probably 6,500 crores in India. So there would be three, four capital allocation strategy. First, obviously, being a acquisition, and acquisition will be either a mid to large scale company or or it could be lower into d two c. We have already allocated 500 crores for DABUR Ventures. So one, the strategy set this. Second would be dividend. You know, dividend, as you know, we already enhanced, and 100% of India profits actually goes back as dividend. And third would be, you know, as a CapEx or routine extension, where any of the main sales of Tamil Nadu in Tamil Nadu, which will consume cash. So another 400 to 500 crores goes in cash, you know,.

28:43 So probably this. And also, as I said, you know, any good size M and A, if it's in pipeline, then we would also consider a couple of them. But dividend, as you rightly said, we have increased it. Right. It depends on the shareholder, you know, depending on the opportunity. Okay. Okay. Because, you know, still we would generate cash flow, and, you know, that all this would, you know, be sufficient from the cash flow itself. So maybe we should consider it at a board level or, you know, decide capital allocation that will be helpful for the investors. Definitely, the fact that, therefore, you will see the last two or three years, we are not increasing it. This supposedly, at least a 100% of India profits anyway go back. Correct. And whatever remains outside India is there for future expansion in international business. That's the number Right. Bring that India. So India, guys, we are not expanding.

29:37 For sure. And Mohit, if you know this double digit volume comes through, so we should be in a position to maintain this 14% growth at a console level in the coming quarters, assuming the double digit volume comes through? Yeah. So volume will not be double digit, Jay. In I was talking about the top line being double digit, it will be more driven by revenue and price. Because of the inflation, we had to pass it on to the consumer. So price growth and value growth is becoming higher as compared to the volume growth. So volumes will be under pressure as the the inflation is too much. So... And because of the inflation, while we want profit growth to be accretive to the top line growth, but we'll have to watch the inflation.

30:27 And the the underlying inflation is a geopolitical situation, which has to be watched to see how the situation will be going forward. But... Yeah. It all depends upon the war. If the war ends tomorrow, then I think the petroleum prices will come down, and they were cooling inflation will come down, and we'll be very confident on delivering a double digit profitable growth in line with top line. If the war continues, then it's a wait and watch situation. Watch, ma'am. Understood. Understood. Thank you. All the best. Thank you very much. Thank you. Participants who wish to ask questions may please press star and one. As there are no further questions, I would now like to hand the conference over to Mr. Rahul Sarawgi for closing comments.

31:27 Thank you, everyone, for joining us today on our earnings call. The webcast recording and transcript will be available on our website. And thank you, and have a great evening ahead. Thank you. On behalf of Dabur India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.