Dabur not doing too well

Dabur India is not doing too well this morning. The stock is amongst the top losers on the BSE, currently down over 3% at Rs.269.40, very close to its intra day low of Rs.268.10.

The market is anxious about the company losing sales in Nepal. The company has informed the exchanges earlier on 19th Nov’15 stating that due to the current state of unrest in Nepal, and the resultant blockage of certain border crossings, the supply of products by its subsidiary Dabur Nepal Pvt. Ltd. was affected. And it had warned that its revenue in the unit could be affected.

Yesterday, the company updated that the situation in Nepal continues to remain grim as there has been no improvement in the eco-political situation in Nepal till date and the India- Nepal border continues to remain closed. The company said that it has lost some part of Juice sale in October and November, 2015 and estimated Juice sale during Q3 of FY 2015-16 will be lower by 10-15%  (YoY).

The company stated that this was a onetime issue beyond its control and will have a near term impact on Q3 FY 2015-16 performance though it is hopeful of getting back on track by Q4.

To mitigate the situation the company has ramped up the production of juices in Sri Lanka & Newai, Rajasthan. It has also engaged with third parties to cater to its demand requirement for the month of December and going forward.

This is a situation on which Dabur has no control. Thus it would be foolhardy to say give an estimate as to when it hopes things would get better.