Dabur India is set to report its Q3 earnings on Thursday.
It is a case of all things bad coming together for Dabur because it has the highest exposure to rural markets. About 45-50 percent of Dabur's revenues come from the rural markets and as rural growth lags its urban counterpart, the FMCG major's earnings are likely to suffer.
In international business, the company has the highest exposure to Middle-East with the region contributing about 25-30 percent of Dabur's revenues. Additionally, one of its key portfolios — the juices — is facing structural headwinds because of a change in consumer behaviour. Consumers are now switching to milk-based drinks or fruit-based nectar.
A combination of these factors is pointing to a growth of 5 percent to Rs 2,300 crore. Ebitda growth is expected to be about 9 percent and sit in the range of Rs 485-500 crore, according to a CNBC-TV18 poll.
The margins are likely to expand by about 70 basis points to 21 percent and the net profit growth is seen to grow by 9 percent primarily because Dabur did not get much benefit from last year's corporate tax rate cuts. The company's effective tax rate was below the cuts announced.
Domestic volume growth is seen between 4 and 5 percent, led by the Dabur's new toothpaste business as well as the personal wash business where the Vatika shampoo is doing exceptionally well for the company.