Dabur India expects mid-single digit revenue growth in Q2

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The FMCG major said that its India business is expected to report revenue growth in mid-single digits in Q2 FY23.

Food & Beverages vertical continued to lead with robust double-digit growth on a high base of 43% growth in Q2 FY22. Home and Personal Care portfolio is expected to record mid-single digit growth on a high base of 16.7% growth in Q2 FY22. Healthcare vertical is expected to report a near double-digit growth in terms of 3-year CAGR but will see a muted performance during the quarter on the back of high Covid base.

Geopolitical situation continued to impact the business with unprecedented inflation during the quarter. This led to weak demand trends across categories. Urban markets were driven by modern trade and ecommerce which saw double-digit growth. Rural markets witnessed some pressure in terms of liquidity. Going forward, moderating inflation and festive season should support consumption growth in the second half of the fiscal, the company stated in the press release.

Dabur's International business is expected to post double-digit revenue growth in constant currency. However, some of our markets like Turkey and Egypt continued to see currency devaluation during the quarter impacting the translated growth.

Overall, the consolidated revenue is expected to grow at mid-single digit. The company said that it will continue to grow ahead of category growths and gain market share in most of our segments, both in domestic and overseas markets.

During the quarter inflation was at peak levels which impacted gross margins. The input cost pressure led to a near term impact on operating margin which is expected to be lower by around 150-200 bps as compared to Q2 FY22 but will see sequential improvement. With commodity prices easing, inflation is expected to ease in H2 FY22 leading to YoY improvement in operating margins.

The company said that it continues on the trajectory of outperforming the industry. It will continue to invest strongly behind power brands, innovation, digitization, A&P, distribution expansion and a strong back end which will enable us to achieve profitable and sustainable growth.

Dabur India is one of India's leading FMCG companies. The company's FMCG portfolio today includes eight brands; Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara and Dabur Lal Tail in the Healthcare space; Dabur Amla and Dabur Red Paste in the Personal care category; and Rl in the Foods & Beverages category.

The FMCG company reported 0.7% rise in consolidated net profit to Rs 440.32 crore on an 8.1% increase in revenue from operations to Rs 2,822.43 crore in Q1 FY23 over Q1 FY22.

Shares of Dabur India were down 0.79% to Rs 541.15 on the BSE.

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