Dabur India pricing power and premiumisation support FY27 earnings growth

Investment View and Q1 FY27 Performance

In its July 29, 2026 result update, Anand Rathi Research maintained its BUY rating on Dabur India, arguing that premiumisation, pricing actions and operating leverage should support healthy earnings growth. The broker considers the company’s opening performance in FY27 strong despite weather disruptions, elevated input inflation and geopolitical headwinds.

Dabur India reported consolidated Q1 FY27 revenue of Rs37,644 million, up 10.6 per cent year on year and broadly in line with the Street estimate of Rs37,300 million.

Domestic revenue grew 11 per cent year on year, supported by 5 per cent FMCG volume growth and pricing. Volume growth was marginally below Anand Rathi’s expectation of around 6 per cent. Home and Personal Care revenue rose 12.3 per cent, Food and Beverages grew 7.2 per cent and Healthcare increased 5.5 per cent.

The international business, which represented 27 per cent of revenue, grew 15.5 per cent in rupee terms, led by MENA, Egypt, Turkey, Bangladesh and the UK and EU. India FMCG business grew 9.5 per cent, while rural growth exceeded urban growth by about 550 basis points in traditional trade. E-commerce and modern trade delivered robust double-digit growth, and Dabur gained share in key categories.

Category Performance and Growth Initiatives

Home and Personal Care

Hair care delivered high-teen growth. Hair oils recorded double-digit revenue growth and around 8 per cent volume growth, while Dabur gained 100 basis points of market share. Shampoo growth was in the early 20s following the launch of Vatika Bio Infusions.

Oral Care registered high-single-digit growth, with herbal oral care outperforming non-herbal products by about 550 basis points.

Healthcare and New Launches

In Healthcare, Honey posted high-single-digit growth and gained 150 basis points of market share. Glucose recovered in May and June after weather-related weakness in April 2026.

The broker also noted encouraging responses to recent launches, including Pudin Hara 5-in-1, camphor cones and car fresheners. Badshah integration is progressing well, with the acquired business nearly doubling since acquisition through geographic expansion, volume growth and scaling in quick commerce and e-commerce.

Profitability and Management Outlook

Q1 FY27 EBITDA grew 11.0 per cent year on year to Rs7,414 million, with EBITDA margin expanding 10 basis points to 19.7 per cent. A 30-basis-point rise in gross margin was partly offset by 20-basis-point increases in advertising expenditure and other expenses. PAT increased 15.3 per cent year on year to Rs5,862 million.

Management expects double-digit consolidated revenue growth in FY27E, driven by premiumisation, innovation, Project Saksham go-to-market transformation and pricing. Inflation-led price hikes are expected to contribute more to growth, while volume growth may remain somewhat under pressure. Elevated crude-linked input inflation and the Middle East situation remain key monitorables.

Earnings Forecasts and Valuation

Anand Rathi forecasts revenue CAGR of 8.5 per cent over FY26-FY28E, comprising domestic revenue CAGR of 8 per cent and international revenue CAGR of 10 per cent. It expects EBITDA margin to improve by 100 basis points to 19.5 per cent over FY26-FY28E, aided by a 40-basis-point gross-margin expansion.

The broker made only limited estimate changes. FY27E and FY28E sales were raised 0.1 per cent, EBITDA was reduced 0.1 per cent, and PAT was raised 0.4 per cent and 0.3 per cent, respectively.

Key Risks

• Failure of new launches.
• Pricing competition in key products.
• Unwarranted or overpriced bolt-on acquisitions.
• Geopolitical turbulence affecting international operations.