Dabur India shares Q1 updates, says business growth at 10%

Dabur India on Thursday came out with a business update for the June quarter, saying Dabur India's consolidated business including recently acquired Badshah Masala, is expected to register growth in excess of 10 per cent. The FMCG major said its international business may report a strong performance with double digit growth in constant currency terms. Softening of inflation in international markets is having a positive impact on the business, Dabur India said in a BSE filing. 

In the June quarter, Dabur India said trends in both urban and rural India have shown signs of improvement. 

"One of the key contributing factors to this positive development has been the reduction in inflation. Sequential moderation in inflation has positively impacted consumer spending power and is resulting in gradual improvement in offtakes in the industry," the FMCG major said.

Dabur India said its Healthcare and HPC businesses performed well and could achieve double-digit growth backed by mid-single digit volume growth. 

"Within HPC, the Home Care category is expected to report value growth in high teens and Oral & Hair care categories growing in 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 business is expected to post growth in high single digit," it said.
Dabur India said  Badshah Masala showed strong momentum growing in high teens, adding that the reduction in inflation is expected to lead to year-on-year gross margin expansion. We are channelising a major part of the gross margin expansion towards ramping up advertising and promotion (A&P) spends 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," it siad.

For the full year, Dabur India expects 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, it said.

"Overall, we are encouraged by the improving trends observed in the urban and rural markets in India, as well as the positive performance of our business segments. We remain committed to driving growth and profitability while navigating market challenges and capitalising on opportunities for the remainder of the fiscal year," it said.