Dabur sees sequential improvement in consumer demand, rural growth in Q1

Demand trends witnessed sequential improvement in the June quarter, with rural growth picking up, homegrown FMCG major Dabur said on Friday.

Moreover, with a forecast of a normal monsoon and continued focus by the government on macroeconomic growth, "we expect the improvement to accelerate in the coming month," the company said in an update for the quarter ended June 30, 2024.

The domestic business is expected to record mid-single-digit volume growth and its consolidated revenue is expected to register mid-to-high single-digit growth during Q1 FY25, said Dabur, which owns brands such as Dabur Chyawanprash, Dabur Honey, Dabur PudinHara, Dabur Lal Tail, Dabur Amla, Dabur Red Paste, Real and Vatika.

"In India business, HPC (home and personal care) & Healthcare segment is expected to grow in high-single digits," it said.

Travel and out-of-home consumption were impacted due to scorching summers, which had an impact on our beverage segment although the food (culinary) category showed good momentum.

Its Badshah Masala business, which the company acquired two years ago, is expected to post "strong volume-led growth" in the high teens, the update added.

The company's International Business, which generally contributes around 25-30 per cent of its overall business, is expected to post strong growth in constant currency terms.

"However, severe currency depreciation in Turkiye and Egypt continued to have an impact on translated growth," the company said.

Regarding the commodity prices, Dabur said it was stable during the June quarter.

"Gross margins are likely to witness some expansion on account of rollover price increases and cost-saving initiatives," it said, adding, "The business continued to invest strongly behind the brands with A&P spends growing ahead of revenue."

"Consequently, the operating profit is expected to grow marginally ahead of revenue," the company said.