Dabur India expects low to mid-single digit revenue growth in Q3

The FMCG major on Friday announced that its India business is expected to report low to mid-single digit revenue growth, however, the international business is expected to deliver double-digit revenue growth in Q3 FY23.

On account of challenging macro-economic environment and muted category growths in the quarter, the firm's India business will report low to mid-single digit revenue growth. Healthcare portfolio returned to positive growth trajectory, still navigating high bases of the pandemic. Food & Beverages (F&B) business continues to trend at robust levels. During the quarter, F&B's growth will see some moderation on account of early onset of the festive season.

Dabur said that the demand trends for the industry remained weak during Q3 FY23 with rural markets continuing to remain under pressure. This was further accentuated by late onset of winter in north India. However, early signs of moderate recovery were visible towards latter part of the quarter coupled with some abatement in inflation.

The improving macroeconomic environment, positive steps being taken by the government and the expected stimulus of the upcoming Union Budget should help speed up the recovery of the industry, it added.

The FMCG company said that it is continuing the trend of double-digit CAGRs of the business in H1 FY23, the 3-yearCAGRs in this quarter will be in high single digits for home and personal care (HPC) and healthcare and double digits for Food & Beverages.

The organized channels of Modern Trade and E-commerce continued to report double digit growth. Rural markets showed early signs of recovery towards the end of the quarter and could be further bolstered by the upcoming harvest season, MSPs and expected spending by the government, the firm stated.

Dabur's International business is expected to post double-digit revenue growth during the quarter in constant currency. However, due to currency headwinds in Turkey and Egypt, the reported growth in Rs would be impacted. Overall, the consolidated revenue is expected to report low to mid-single digit growth.

The company said that the inflation has started to cool off during the quarter. As a result, gross margins will be marginally better sequentially. The adverse currency movements in International Business and inflation will lead to near term impact on operating margin, which is expected to be lower by 200-250 bps as compared to Q3 FY22.

While the environment has been challenging, the company has stayed the course and continues to invest strongly behind power brands, innovation, distribution expansion and a strong back end which will enable us to improve our market shares and achieve profitable and sustainable growth, Dabur stated in the press release.

Dabur India is one of India's leading FMCG companies. It is one of the world's largest ayurvedic and natural health care company.

The FMCG major's consolidated net profit declined 2.83% to Rs 490.06 crore on 6% increase in net sales to Rs 2986.49 crore in Q2 FY23 over Q2 FY22.

Shares of Dabur India slipped 3.34% to Rs 553.70 on the BSE.

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