Dabur India Sees Mid-Single Digit Decline In Revenue In September Quarter

Dabur India Ltd. expects to post a "mid-single-digit decline" in consolidated revenue for the quarter ended September 2024, the company said in a quarterly update shared on Tuesday.

While demand trends witnessed some improvement during the quarter, consumer offtake was hit due to "heavy rain and floods" in some parts of the country, Dabur said. The adverse weather particularly affected the company's business in the beverage category, it added.

The topline also faced a decline due to Dabur's move to "correct distributor inventory" in the general trade channel.

Over recent quarters, disproportionate growth in modern trade, e-commerce, and quick commerce has resulted in increased inventory levels within the general trade channel, thereby affecting distributor return on investment, Dabur said.

"The company has strategically decided to correct distributor inventory in the GT channel," the fast-moving consumer goods major said. "On account of this correction, the company is expected to post a mid-single-digit decline in consolidated revenue for the quarter."

While this correction has happened in India's business, the international business is expected to register double-digit constant currency growth in the topline, Dabur said, adding that its Badshah Masala business continued to "perform well, growing in double digits during the quarter."

The company further noted that it remains committed to investing in its brands and maintaining advertising and promotion expenditures despite anticipated impacts on profitability.

Operating margins are expected to decline in the mid- to high teens due to deleverage and ongoing investments. This corrective action is deemed vital for enhancing efficiency and growth prospects, it said.

Dabur plans to strengthen its marketing and media initiatives, improve distribution infrastructure, and enhance backend capabilities, the filing said. With these efforts, revenue growth is expected to recover starting in October 2024, it added.