Demand Trends Remained Sluggish In March Quarter, Rural Growth Picked Up: Dabur

Demand trends in the March quarter 'remained sluggish' but rural growth picked up, FMCG major Dabur said, adding that it expects consumption to pick up in the coming month, helped by a good rabi crop harvest and forecast of a normal monsoon.

The rural growth is 'fuelled by price rollbacks' in staple food that led to the gap between rural and urban narrowing, said the home-grown firm in its quarterly updates.

'With a positive outlook for the rabi crop harvest and monsoon forecast to be normal, we expect consumption to pick up in the coming months,' said Dabur.

It further said, 'While the past year was challenging in terms of consumer demand, we expect improvement in consumption going forward as macro-economic indicators continue to be robust.'

The consolidated revenue of the company, which owns brands such as Dabur Chyawanprash, Dabur Honey, Dabur Pudin Hara, Dabur Lal Tail, Dabur Amla, Dabur Red Paste, Real and Vatika 'is expected to register mid-single digit growth during Q4 FY24'.

The topline growth is also helped by its spice brand Badshah, which was acquired by the Burman family-promoted firm in October 2022.

Besides, Dabur's gross margins are likely to 'continue to witness expansion' on account of deflation in input cost and cost-saving initiatives.

In domestic business, Dabur's HPC (home & personal care) is expected to grow in high-single digits, while healthcare and F&B segments are expected to register low single-digit growth.

'F&B had a high base last year and the healthcare portfolio was impacted due to delayed winter. Badshah Masala continued to perform well and is expected to post strong volume-led growth in the high teens. We continued to gain market share across our categories driven by strong execution in the market,' it said.

While, Dabur's international business is expected to register double-digit growth in constant currency terms, led by good momentum in the MENA region (Middle East and North Africa), Egypt and Turkey.

'However, due to the impact of currency depreciation in Turkey and Egypt the translated revenue in INR terms will show growth in mid-single digits,' it said.

With expansion in margins, Dabur's investment in branding/marketing will increase, the company said.

'In line with the strategy to invest behind our brands, we will see higher A&P spends. The operating profit is expected to grow slightly ahead of the revenue and post an improvement in year-on-year operating margins,' it said.