In the March quarter, Dabur reported that demand trends “remained sluggish,” but noted a pickup in rural growth. The company anticipates an uptick in consumption in the upcoming months, buoyed by a promising rabi crop harvest and predictions of a normal monsoon.
The surge in rural growth is attributed to “price rollbacks” in staple food, narrowing the gap between rural and urban areas, according to the firm’s quarterly updates.
Dabur expressed optimism, stating, “With a positive outlook for the rabi crop harvest and monsoon forecast to be normal, we expect consumption to pick up in the coming months.”
Additionally, it highlighted expectations for an improvement in consumption, citing robust macro-economic indicators despite the challenges faced in the past year.
The company forecasts mid-single digit growth in consolidated revenue during Q4 FY24, supported by the acquisition of the spice brand Badshah in October 2022. Dabur anticipates continued expansion in gross margins due to deflation in input costs and cost-saving measures.
In its domestic business segment, Dabur projects high-single digit growth in home & personal care (HPC), with low single-digit growth in healthcare and F&B segments. It expects strong volume-led growth in Badshah Masala, driving market share gains across categories.
Internationally, Dabur foresees double-digit growth in constant currency terms, primarily driven by momentum in the MENA region, Egypt, and Turkey. However, currency depreciation in Turkey and Egypt may temper translated revenue growth in INR terms to the mid-single digits.
As margins expand, Dabur plans to increase investment in branding and marketing activities. “In line with the strategy to invest behind our brands, we will see higher A&P spends,” the company stated. It expects operating profit to grow slightly ahead of revenue, resulting in improved year-on-year operating margins.
