Dabur India announced on Thursday that its domestic operations are anticipated to achieve robust growth in the high single digits. Additionally, a decrease in inflation is predicted to contribute to an expansion in year-on-year gross margins for the first quarter, which concluded on June 30.
In an official filing with the Bombay Stock Exchange (BSE), the domestic fast-moving consumer goods (FMCG) leader announced that its overall business performance, encompassing Badshah Masala and other subsidiaries, is projected to achieve growth surpassing 10 percent. This optimistic outlook stems from a notable upswing in consumer demand observed across urban and rural markets.
“One of the key contributing factors to this positive development has been the reduction in inflation. Sequential moderation in inflation has positively impacted consumer spending power and is resulting in gradual improvement in offtakes in the industry,” it added.
The company highlighted that its Healthcare and HPC (Healthcare and Personal Care) divisions in India are anticipated to experience double-digit growth in the first quarter of fiscal year 2024. This positive projection is supported by a mid-single digit increase in volume.
“Within HPC, the Home Care category is expected to report value growth in high teens and Oral & Hair care categories growing in low double-digits. However, the F&B business, and in particular, the summer-centric beverages portfolio, had a muted quarter due to unseasonal rains and a moderate summer. Consequently, India business is expected to post growth in high single digit,” it added.
Dabur India mentioned that the easing of inflationary pressures has positively influenced its business. Furthermore, the company anticipates its international operations to exhibit “double-digit growth in constant currency.”
Additionally, Dabur India stated that the decrease in inflationary patterns is projected to facilitate “year-on-year gross margin expansion.” A significant portion of this expanded gross margin will be allocated towards increasing advertising and promotion expenditures.
“Consequently, operating profit should grow in line with revenue growth. However, PAT growth will be lower than operating profit growth mainly due to brand amortisation expenditure on account of acquisition. For the full year, we expect improvement in gross margins to continue,” Dabur India said.