Dabur Q2 Earnings: Profit Dips 2.8% To Rs 490 Crore. Firm To Acquire 51% In Badshah Masala

Dabur's revenue from operations rose 6 per cent to Rs 2,986.49 crore during the quarter under review against Rs 2,817.58 crore in the corresponding quarter of the previous fiscal year

Dabur on Wednesday announced an acquisition of a 51 per cent stake in Badshah Masala for a cash consideration of Rs 587.5 crore.

Source : Dabur

Home-grown FMCG major Dabur India Ltd on Wednesday logged a 2.85 per cent fall in its consolidated net profit to Rs 490.86 crore for the second quarter (Q2) ended September 30. The company had posted a net profit of Rs 505.31 crore in the July-September quarter a year ago, Dabur India said in a regulatory filing.

Its revenue from operations rose 6 per cent to Rs 2,986.49 crore during the quarter under review against Rs 2,817.58 crore in the corresponding quarter of the previous fiscal year.

Dabur India's total expenses rose 8.94 per cent to Rs 2,471.28 crore in the latest September quarter. The same stood at Rs 2,268.47 crore last year. 

Meanwhile, Dabur on Wednesday announced an acquisition of a 51 per cent stake in Badshah Masala for a cash consideration of Rs 587.5 crore, according to regulatory filings. The buyout is expected to be completed before March 31, 2023, the company said in its release. The acquisition will be subject to the fulfilment of terms and conditions as per the share purchase agreement and shareholders agreement.

Dabur said, “Dabur India Limited has entered into a share purchase agreement and shareholders agreement with the existing promoters and shareholders of Badshah Masala Private Limited to acquire 51 per cent of the equity share capital of the target company and balance 49 per cent after a period of five years. Cost of acquisition of 51 per cent equity shareholding has been agreed at Rs 587.52 crore less proportionate debt as on the closing date (100 per cent enterprise valuation being Rs 1,152 crore which translates to revenue multiple of around 4.5x and Ebitdamultiple of around 19.6x of FY2022-23 estimated financials)."

The company also said the acquisition was in line with its strategic intent to expand its food business to Rs 500 crore in three years and expand into new adjacent categories. This will also mark Dabur's entry into the over Rs 25,000 crore branded spices and seasoning market in India.

Mohit Burman, chairman, Dabur India, said, "Our investment in Badshah Masala will help expand this business and continue to provide unmatched quality products. This acquisition will accelerate our growth strategy as we continue to build our food business. We intend to leverage our international market presence to grow this business globally."

Hemant Jhaveri, managing director, Badshah Masala, said, "This transaction will enable us to accelerate our growth by adding our products to Dabur's broad portfolio to meet the needs of consumers across geographies.”