Assisted by positive macro indicators, FMCG consumption is exhibiting year-on-year improvement, although the recovery has been gradual, according to Dabur India in its quarter updates.
Factors such as a mild summer and a slightly deficient monsoon have impacted this quarter.
The delayed festive season this year has postponed offtake related to festivals, which will carry forward to the next quarter, the company noted. Dabur expects a recovery in consumption in both urban and rural markets in India due to improving macro indicators, increased government expenditure, and positive consumer sentiment.
The homegrown FMCG major anticipates achieving “mid to high single-digit growth” in its consolidated revenue for the July-September quarter.
“In India business, Healthcare and HPC segments are expected to grow in high single-digit,” as stated in the update for the quarter ending on 30 September 2023.
However, it foresees the F&B business to be “slightly below last year’s revenue” due to factors like a mild summer and changes in the festive season.
Regarding its international business, Dabur expressed optimism, stating it is “poised for a strong performance, with double-digit growth in constant currency,” particularly led by markets such as the Middle East, Egypt, and Turkey.
Furthermore, the company expects “higher gross margin expansion than that seen in Q1 FY24” due to moderating inflation and cost-saving initiatives. A significant part of this gross margin expansion will be directed towards boosting advertising and promotion (A&P) spending.
“Consequently, operating profit is expected to grow in line with revenue and remain steady compared to the same quarter last year,” according to Dabur.
The company remains committed to outperforming the category performance of its business segments and gaining market shares across its portfolio.
“We will continue to invest strongly behind our brands, distribution expansion, manufacturing footprint, and digitisation initiatives,” the company affirmed.
In its quarter update, Dabur India has provided an overall summary of the performance and demand trends observed during the quarter ended September 30, 2023.
“This will be followed by detailed financial results and earnings presentation once the board of directors of the company approves the consolidated and standalone financial results for the quarter ended September 30, 2023,” it added.
