Dabur India sees sequential improvement in demand in December quarter

The demand trends witnessed "sequential improvement" in the December quarter, although rural growth was still lagging urban growth, according to homegrown FMCG major Dabur India.

In its latest quarterly updates, 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 large volume led," Dabur India said.

The company, which owns various brands, including Dabur Chyawanprash, Dabur Honey, Dabur Pudin Hara, Dabur Amla, Real and Vatika, expects to register "mid to high single-digit growth during Q3 FY24" in its revenue.

In the domestic business, the food & beverages segment is expected to grow in the high-single-digit and HPC (home & personal care) is expected to record growth in the mid-single digit.

"Because of delay in onset of the winter season, we anticipate the Health Care business to grow in low to mid single digit," it said.

Besides, Badshah Masala continued to perform well and is expected to post strong volume-led growth in the high twenties.

Last year, Dabur completed the acquisition of a 51 per cent stake in Badshah Masala to enter the branded spices and seasoning market.

"Our International Business is expected to register double-digit growth in constant currency terms, led by good momentum in the MENA region," it said.

On the gross margins, Dabur said it is likely to expand, led by moderating inflation and cost-saving initiatives.

"A significant portion of gross margin expansion will be channelled into enhancing advertising and promotion (A&P) spends. Consequently, operating profit is expected to grow slightly ahead of the revenue and post an improvement in Y-o-Y," Dabur added.

The company expects a recovery of consumption in both urban and rural markets in India due to improving macro indicators, an increase in government expenditure and positive consumer sentiment.

"We remain committed to driving ahead of category, the performance of our business segments and gaining market shares across our portfolio," it said, adding that the focus on brand building, enhancement of digital capability, increasing distribution footprint and efficiency enhancement will continue.

In the quarterly update, Dabur India has provided an overall summary of the performance and demand trends witnessed during the quarter ended December 31, 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 December 31, 2023," it added.