Why did Dabur report such a sharp fall in net profits for the Mar-22 quarter?

For the Mar-22 quarter, Dabur Ltd reported a nominal 7.75% growth in sales revenues at Rs.2,518 crore on a yoy basis. However, revenues were lower -14.41% on a sequential basis. For FY22, sales revenues were higher by 12.96% at Rs.12,282 crore. In terms of the performance of specific verticals, the consumer care and foods business showed growth on a yoy basis. However, on sequential basis, the consumer care business saw sharp fall in revenues due to rural sales getting negatively impacted on the back of spike in rural inflation and falling rural income levels.

For the Mar-22 quarter, the net profits were down -22.13% at Rs.294.22 crore while it was down sequentially by a much sharper -41.5%. The board has proposed a final dividend pay-out of Rs.2.70 per share for FY22, which his subject to shareholder approval. In Q4, Dabur took an exceptional write-off to the tune of Rs.85 crore.

This exceptional write-off was on account of goodwill impairment of its Turkish subsidiary, Hobi Kozmetics. Overall, there was a spike in operating costs during the quarter. Net Profit margins stood at 11.69% in Mar-22 quarter compared to 16.17% in Mar-21 quarter. The NPM was lower sequentially compared to 17.11% in Q3.