Dabur India‘s shares were up on Friday after the firm projected mid to high single-digit growth in its domestic business revenue for the third quarter of the fiscal year 2023-2024.
What Happened: The company’s food and beverages (F&B) segment is anticipated to achieve high-single-digit growth, while the home and personal care (HPC) segment is expected to record mid-single-digit growth.
The delay in the onset of the winter season is projected to result in low to mid single-digit growth in its healthcare business. Notably, Badshah Masala is performing well and is poised for strong volume-led growth in the high twenties.
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Why It Matters: Dabur said that despite rural growth lagging behind urban growth, the quarter gone by exhibited a sequential improvement in demand trends. The company noted early signs of consumption revival with improving volumes, emphasising that growth is primarily volume-led due to subdued pricing growth.
Dabur’s international business is also anticipated to achieve double-digit growth in constant currency terms, driven by strong momentum in the Middle East and North Africa (MENA) region.
While the company did not provide specific revenue figures in the update, it expects gross margins to expand, fuelled by moderating inflation and cost-saving initiatives. The increased gross margins will be allocated to enhance advertising and promotion (A&P) spends.
Consequently, the operating profit is expected to outpace revenue growth, improving year-on-year operating margins.
Dabur expressed optimism about the recovery of consumption in both urban and rural markets in India, citing improving macro indicators, increased government expenditure and positive consumer sentiment.
Price Action: Dabur India’s share price was 0.58% at ₹569.55 near the start of trade on Friday, extending gains of 2.37% from the previous session.
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