Dabur India on Thursday said that its India business is expected to report mid-single digit revenue growth in the fourth quarter ended March 31. This is on the back of some improvement visible in demand trajectory in both urban and rural markets compared to December quarter. But it pointed out that demand in rural markets remained muted during the quarter.
The fourth quarter also marked the consolidation of Badshah Masala and the company said that the business is in the process of being integrated.
In a BSE filing, the homegrown FMCG major said, “The demand trajectory across both urban and rural markets in India has shown a slight improvement sequentially, although it falls short of a full recovery. While urban markets have returned to positive volume growth, rural markets still remain muted.”
It added that despite near-term consumption pressures, there are some green shoots which are emerging. It pointed to factors such as improving consumer sentiment, moderating inflation and increase in government spending.
“Dabur’s India business is expected to report mid-single digit revenue growth. Inflation continued to cool off for most of our commodities. India’s gross margins are expected to show an improvement but consolidated gross margins will be impacted mainly due to currency headwinds in international business,” the company stated.
In terms of categories, it said the food and beverage business will report strong double-digit growth and the healthcare portfolio is expected to be in the positive growth trajectory. The health and personal care business will report low-single-digit growth. “Our brands continued to record gain in market shares in most of the segments,”it added.
International headwinds
Further, Dabur noted, “We have also strategically increased our spends behind our brands, leading to short-term pressure on the operating margin, which is expected to be lower by around 200-250 bps as compared to Q4 FY22.
Stating that international business is expected to report high-single digit growth in constant currency, it added that it faced currency headwinds in Egypt and Turkey. “While there are short-term pressures, we are restructuring our distribution network in key markets and increasing investments behind our brands which will benefit us in the long term,” it added.
“While the environment has been challenging, the fundamentals of the business continue to be resilient,” the filing added.