Dabur, a leading FMCG company, stated that demand trends during the March quarter were subdued, but there was a noticeable uptick in rural growth. The company anticipates an improvement in consumption in the upcoming months, buoyed by a favorable rabi crop harvest and predictions of a regular monsoon. The surge in rural growth is attributed to price reductions in staple food items, which have contributed to narrowing the gap between rural and urban areas, according to the company’s quarterly updates.
“Taken into account the bright outlook for the rabi crop harvest and the forecast of a normal monsoon, we anticipate consumption to pick up in the coming months,” Dabur stated.
It additionally stated, “Although the previous year posed challenges in terms of consumer demand, we anticipate an enhancement in consumption moving forward, given the robust nature of macro-economic indicators.”
The company, which owns brands like Dabur Chyawanprash, Dabur Honey, Dabur Pudin Hara, Dabur Lal Tail, Dabur Amla, Dabur Red Paste, Real, and Vatika, is anticipated to achieve mid-single digit growth in consolidated revenue during Q4 FY24.
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The growth in revenue is also supported by its spice brand, Badshah, acquired by the Burman family-led company in October 2022.
Additionally, Dabur’s gross margins are expected to “continue to expand” due to lower input costs and cost-saving measures.
In the domestic market, Dabur’s HPC (home & personal care) segment is projected to grow by high-single digits, whereas the healthcare and F&B segments are anticipated to achieve low single-digit growth.
“F&B faced a challenging comparison with a high base from last year, and the healthcare portfolio was affected by a delayed winter. However, Badshah Masala maintained strong performance and is anticipated to achieve robust volume-driven growth in the high teens. We consistently increased our market share across all categories due to effective market execution,” the statement read.
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Dabur’s international business is projected to see double-digit growth in constant currency terms, driven by solid momentum in the MENA region (Middle East and North Africa), as well as in Egypt and Turkey.
“However, due to currency depreciation in Turkey and Egypt, the translated revenue in INR terms is expected to show growth in the mid-single digits,” the statement read.
Dabur stated that with the expansion in margins, the company plans to increase its investment in branding and marketing.
“We anticipate larger A&P spending, which are in line with our brand investment approach. The operational profit is expected to expand somewhat faster than revenue, resulting in higher year-on-year operating margins,” the statement added.
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