FMCG Dabur India shares fell over two percent in the morning deals on October 31 after Dabur India reported its earnings show for the quarter ended September.

Dabur India said its Q2FY25 net profit fell 17 percent year-on-year to Rs 425 crore, meeting the Street expectations. It reported net profit of Rs 515 crore in the year-ago period.

The FMCG major's July-September revenue fell 5 percent to Rs 3,029 crore, coming in line with the poll estimate of Rs 3,076 crore. It reported revenue of Rs 3,204 crore in Q2FY24.

At 9.15 am, shares of the Chyawanprash maker sank into the red, falling over 2 percent to quote Rs 533 on the NSE.

Dabur India had previously announced that it would post a mid-single digit decline in the consolidated India revenue for the September quarter. Dabur said its profitability will be affected in Q2FY25, and the operating margin is expected to fall in mid-to-high teens on account of higher investment and deleveraging.

The company had largely stopped primary sales for the last 7-8 days of the quarter to enable broad-based category-wide distributor inventory correction.

However, in H2, the firm expects revenue growth to recover to mid-to-high single digits, with flat to marginal decline in the OPM.

"Revenue growth in the medium term will be driven by market share gains, distribution expansion, investments in power brands and new launches, while profitability is expected to improve, as raw-material inflation eases and operating leverage improves," noted brokerage Sharekhan. It retained its buy call, with a revised target price of Rs 685 per share.

Nuvama Institutional Equities decided to maintain its buy rating, with a reduced target price of Rs 650 per share given a weak showing, subdued urban demand and rising risk from competitors.

International brokerage CLSA maintained its 'hold' call, with a target price of Rs 582 per share, as Dabur India reported a miss on sales and profitability. The brokerage said that while Dabur India had strong gross margins, it had weak operating margins due to operating deleverage. As a result, it cut FY25 earnings estimate by 7-8 percent.

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