Dabur India Explores Acquisitions in D2C Healthcare and Personal Care

Dabur India, a leading FMCG company, is proactively searching for opportunities to expand its footprint in the D2C healthcare and personal care sectors. By considering potential acquisitions in these areas, Dabur intends to capitalize on the rapid growth of the premium segment and reinforce its position in urban markets.

Amidst an improvement in margins due to softening commodity prices, the company is increasing investments in branding and promotion.

Dabur's CEO, Mohit Malhotra, shared insights during a post-results Investors' Conference Call, stating that the proposed acquisition would play a crucial role in shoring up margins while avoiding any dilution.

Dabur's Focus on D2C Acquisition

Dabur India aims to identify suitable D2C targets, particularly in healthcare and personal care, to bolster its portfolio and align with its core strengths. The acquisition strategy seeks to enhance Dabur's premium offerings and Ayurvedic skincare products.

Criteria for Potential Acquisition

According to CEO Mohit Malhotra, Dabur India is seeking brands that complement its healthcare and personal care segments and contribute positively to its financial performance. The company is financially well-positioned to pursue such acquisitions, which can potentially act as a premium play for its urban business.

Previous Acquisition and Competitor Landscape

In line with its growth strategy, Dabur recently completed the acquisition of a 51% stake in Badshah Masala, signaling its entry into the branded spices and seasoning market. Additionally, other major FMCG players, including HUL, Marico, ITC, and Tata Consumers Products Ltd, have made aggressive acquisitions in the D2C food space.

Recovery in Demand and Business Performance

Despite challenges posed by unseasonal rains affecting its beverage portfolio, Dabur remains optimistic about demand recovery. The company recorded a 5% increase in consolidated net profit, reaching Rs 464 crore during the June quarter. Its revenue from operations also surged by 10.91%, reaching Rs 3,130.47 crore compared to the corresponding period last year.

Focus on Distribution and Marketing

Dabur emphasizes its commitment to superior go-to-market execution, aiming to enhance its distribution network while driving growth for its power brands. The company strives for a balanced and sustainable approach to value creation.

Investment in Innovation and Rural Growth

Dabur continues to invest in consumer-centric innovations and technology to achieve its mission of promoting health and well-being for every household. With inflation softening, the company has witnessed a bounce-back in rural growth to high single digits after three quarters, narrowing the gap with urban demand.

Conclusion:

Dabur India's proactive pursuit of D2C acquisitions in healthcare and personal care demonstrates its dedication to strengthening market presence and driving sustainable growth.

As the company focuses on premium offerings, branding, and distribution, strategic investments are expected to play a crucial role in shaping its future success in the FMCG sector.

Some relevant and latest facts for the above news:

• Dabur is a homegrown FMCG major with a strong portfolio of brands in the healthcare and personal care space.

• The D2C space is growing rapidly, and Dabur is looking to acquire a brand that will help it tap into this growth.

• The company is looking for a brand that is synergistic with its existing portfolio and has the potential to shore up margin and grow its business in the long term.

• Dabur has the financial resources to make an acquisition, and it is in a good position to compete with other FMCG companies that are also looking to acquire D2C brands.

• The acquisition is expected to be completed in the next few months. It will be interesting to see which D2C brand Dabur acquires.

Here are some additional facts that are relevant to the news:

• The Indian D2C market is expected to grow at a CAGR of 25% from 2022 to 2027.

• The market is being driven by the growing demand for online shopping, the increasing penetration of smartphones, and the rising disposable income of consumers.

• Some of the leading D2C brands in India include Mamaearth, The Body Shop India, Nykaa, and Purplle.

• Dabur is not the only FMCG company that is looking to acquire D2C brands. Other companies, such as HUL, Marico, and ITC, have also made acquisitions in the D2C space in recent years.