Dabur expects double digit revenue growth in Q2 FY27

MUMBAI: Dabur is hoping the festive season brings more than just good cheer to its balance sheet. The FMCG major expects consolidated revenue to grow in double digits for the quarter ended 30 September 2026, with its India FMCG business also projected to accelerate to double-digit growth.

The company’s Q2 FY27 business update points to steady demand despite a fairly crowded list of challenges, including renewed geopolitical tensions in the Middle East, inflationary pressure across commodities and deficient rainfall. Dabur said its India FMCG business is expected to deliver its strongest performance in recent quarters, setting up a stronger showing across several of its key categories.

Home and Personal Care (HPC) is expected to remain one of the main engines of growth. The portfolio is projected to register double-digit growth, with Hair Oils and Shampoos expected to grow in the high teens, supported by both perfumed and coconut hair oils.

That would mark the fourth consecutive quarter of double-digit growth for Hair Oils and Shampoos. The consistency is significant for a category where Dabur is looking to build momentum across multiple product segments rather than relying on a single growth pocket.

The rest of the personal care portfolio is also expected to keep the momentum going. Skin Care is projected to post double-digit growth, while Home Care is expected to grow in the high single digits.

Oral Care, meanwhile, is expected to deliver mid-single-digit growth on a high base. The category’s performance comes against the backdrop of an already sizeable business, making the pace of expansion more measured than some of the faster-growing segments.

Dabur’s Healthcare business is expected to grow in the mid-single digits. Within the segment, OTC & Ethicals is projected to recover sequentially with early-teens growth, while Digestives are expected to maintain their momentum with high-teens growth.

Health Supplements, however, had a more complicated quarter. Dabur said the business was affected by the ongoing transition to refreshed packaging and labels across the portfolio, creating a temporary drag on performance.

Food and Beverages is expected to be another bright spot, with the business projected to grow in the mid-teens. Foods is likely to maintain strong double-digit growth, while Beverages is expected to record early-teens growth as it stages a sequential recovery.

Dabur attributed the expected improvement in Beverages to an expanded portfolio across formats and price points, along with favourable seasonality. The combination gives the category another lever to pull as demand picks up through the festive period.

Beyond individual categories, the company continues to put its distribution strategy under the microscope. E-commerce and quick commerce are expected to maintain strong growth, while Modern Trade is also projected to continue its double-digit growth trajectory as Dabur invests further in its omnichannel distribution network.

General Trade continued to grow across both urban and rural markets, with rural growth outpacing urban markets. Dabur attributed the trend to its continued efforts under Project Saksham, which is aimed at strengthening its reach and distribution across markets.

The rural momentum is particularly relevant for an FMCG company with a wide consumer footprint. Stronger rural growth can provide an additional demand engine at a time when urban consumption is being spread across increasingly competitive channels, from supermarkets to e-commerce and quick commerce.

Dabur’s International Business is expected to post high-teens growth in rupee terms despite severe headwinds in the Middle East. Egypt, Turkey, the US, Bangladesh and the UK each recorded strong double-digit growth in INR terms during the quarter.

However, the revenue growth story is not without a margin squeeze. Elevated input costs, particularly across HPC and OTC & Ethicals, continued to put pressure on operating margins during the quarter.

Dabur said it partly offset the pressure through calibrated price increases and ongoing cost-saving initiatives. Despite the cost headwinds, the company expects profit after tax to continue growing at a double-digit rate.

The Q2 update comes with Dabur entering the quarter with a portfolio spread across consumer health, personal care, oral care, home care, food and beverages. The company has three brands with annual revenues above Rs 1,000 crore, Dabur Amla, Dabur Red Toothpaste and Real.

It also has three brands in the Rs 500-crore-plus bracket and another 16 brands generating between Rs 100 crore and Rs 500 crore annually. The breadth of that portfolio gives Dabur multiple categories through which to chase growth rather than depending on one or two flagship products.

Distribution remains another major part of the equation. Dabur has a retail reach of 8.5 million outlets and is described as India’s second-most distributed FMCG company, giving its brands a substantial physical footprint alongside its growing digital and modern trade presence.

For context, Dabur reported consolidated revenue from operations of Rs 13,192 crore in FY26, while consolidated profit after tax stood at Rs 1,895 crore. The company’s Q2 FY27 update therefore sets up the September quarter against a sizeable existing base, with the focus now shifting to whether the expected double-digit growth translates into the final numbers.

With HPC, Foods, Beverages, rural markets and emerging digital channels providing several growth levers, Dabur appears to be heading into the festive quarter with plenty on its plate. The catch is that rising input costs are sitting at the other end of the table, leaving revenue growth and margin protection to play their own tug of war.