FMCG firm Dabur India said that demand trends in both rural and urban India have seen a slight improvement, but fall short of a full recovery.
In its March quarter business update, the company said that it expects to post mid-single digit growth on a consolidated basis. However, operating margin for the quarter is likely to be lower by 200-250 basis points from last year. Most of the margin impact will be due to the increased spends on brands.
While operating margin for the India business may improve year-on-year, the consolidated gross margin will be hit due to currency headwinds in the international business.
Dabur said that while urban markets have returned to positive volume growth, rural markets still remain muted.
Despite the near-term challenges, Dabur sees some green shoots emerging like moderating inflation, improving consumer confidence and increase in Government spending.
In terms of segments, Dabur India's food and beverages business will report strong double-digit growth and healthcare products portfolio will report low single digit revenue growth on account of slowdown in the personal care categories.
"We will continue to invest strongly behind Power Brands, Innovation, Distribution expansion and a robust back end which will enable us to increase our market shares and achieve orofitable and sustainable growth," the company said in a statement.
Shares of Dabur are down 3.3 percent at Rs 529.80. The stock is down 5.7 percent so far this year.
(Edited by : Rukmani Krishna)
First Published: Apr 6, 2023 12:21 PM IST
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