Q1 Business update: Dabur business growth at 10%

Dabur India stated that it expects its consolidated business, which includes the recently acquired Badshah Masala, to increase by more than 10%. The big FMCG company predicted that its overseas division might post good results with double-digit growth in constant currency terms. International Business is expected to report a strong performance with double-digit growth in constant currency. Softening of inflation in international markets is having a positive impact on business.

The Healthcare and HPC businesses in India have performed well and are projected to achieve double-digit growth backed by mid-single-digit volume growth. Within HPC, the Home Care category is expected to report value growth in the high teens and the Oral & Hair care categories growing in the low double digits. However, the F&B business, and in particular, the summer-centric Beverages portfolio, had a muted quarter due to unseasonal rains and a moderate summer. Consequently, India’s business is expected to post growth.

According to Dabur India in a BSE filing, the business is benefiting from a slowdown in global inflation. According to Dabur India, trends in both urban and rural India have exhibited signs of improvement in the June quarter. "The decline in inflation has been a significant component in this favourable development.” A progressive improvement in offtakes in the industry is being brought on by the sequential lowering of inflation, according to the FMCG giant.

Healthcare and HPC divisions at Dabur India reported strong performance and the potential for double-digit growth supported by mid-single-digit volume growth. 

Badshah Masala showed strong momentum growing in high teens.

 The reduction in inflation is expected to lead to year-on-year gross margin expansion. We are channelizing a major part of the gross margin expansion towards ramping up advertising and promotion (A&P) spending to ensure long-term success. Consequently, operating profit should grow in line with revenue growth. However, PAT growth will be lower than operating profit growth mainly due to brand amortization expenditure on account of acquisition. For the full year, we expect improvement in gross margins to continue. The gross margin expansion will be allocated towards increasing our A&P spends and is also expected to result in improvement in our operating margin on an annualised basis.

Source: Media reports

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