Consumer goods major Dabur India said on Thursday that it expects consolidated revenue growth for the December quarter (Q3) in mid-to-high single digit amid a sequential improvement in demand trends. The statement was made in the quarterly update for the period by Dabur.
In the India business, the F&B (food & beverages) segment would likely grow in high-single digit and HPC (home and personal care) would likely see growth in mid-single digit, the company said. Shares of Dabur ended 2.73% up on Thursday on the BSE at Rupees 566.10 apiece.
Due to a delay in the onset of winter, Dabur said that it expects the healthcare business to grow in low-to-mid single digit. Badshah Masala, meanwhile, continues to perform well and would likely post strong volume-led growth in the high twenties, it said.
“Although rural growth is still lagging urban growth, early signs of revival in consumption are visible with improving trends in volumes. With pricing growth remaining subdued due to price increases in the base year, growth is largely volume-led,” the company stated.
Dabur’s international business is expected to register double-digit growth in constant currency terms, led by good momentum in the MENA (Middle East and North Africa) region.
Gross margins would likely expand in Q3, led by moderating inflation and cost-saving initiatives. A significant portion of gross margin expansion would be channelled into enhancing advertising and promotional (A&P) spends, the company said. “Consequently, operating profit is expected to grow only slightly ahead of revenue and post an improvement in y-o-y operating margins,” Dabur said.
While the company said it expects a consumption recovery in both urban and rural markets in the quarters ahead, the focus on brand building, enhancement of digital capabilities and increasing the distribution footprint would continue.
In Q2, Dabur had reported a consolidated revenue of Rupees 3,203.84 crore, a year-on-year growth of 7.2%. While year-on-year profit growth was 5% for the period at Rupees 515.05 crore.