Dabur expects India business to clock high single-digit revenue growth in Q1

Meenakshi Verma Ambwani | Updated on: Jul 06, 2022
Expects international business also to garner high single-digit revenue growth in Q1

Expects international business also to garner high single-digit revenue growth in Q1

Says consumption pressure continued across markets due to unprecedented inflation

Dabur India on Wednesday said its domestic business is expected to report high single-digit revenue growth in the first quarter of FY23 over a very high base in the corresponding quarter last year. In a BSE filing, the company stated that it expects the overall consolidated revenue to grow in mid to high single digits.

Stating that the unprecedented inflation has impacted the share of income available for spending on consumer staples, the FMCG major said consumption pressure was visible across urban and rural markets during the quarter.

“In this challenging macro environment, Dabur’s India business has been fairly resilient and is expected to report high single-digit revenue growth on a very high base of 35.4 per cent revenue growth in Q1 FY22. This is backed by mid single-digit volume growth,” it stated.

Talking about the performance and demand trends, it said the food & beverage vertical saw strong double-digit growth in Q1 on the back of improving out-of-home consumption and an intense summer season. Home and Personal Care portfolio is also expected to record high single to low double-digit growth on a high base in Q1 FY22. However, it added, “Healthcare vertical is expected to report a decline as the business had registered a growth of 30 per cent in Q1 FY22 led by the surge of the Delta variant of Covid-19.”

The company’s key brands include Dabur Chyawanprash, Honitus, Pudin Hara, Lal Tail, Vatika, Red Paste and Real among others.

International business

The FMCG major said it expects the international business to garner a high single-digit revenue growth in Q1 in constant currency terms. However, due to currency devaluation, particularly of the Turkish Lira, the “reported growth in INR would be in low single digit”, said the company.

“Overall, the consolidated revenue is expected to grow at mid to high single digits. We continue to grow ahead of category growths and gain market share in most of our segments,” it added.

Price hikes

On the profitability front, the company pointed to the continued impact of inflationary pressures on raw material costs, including crude-led derivatives, vegetable oils, honey and other agri-based commodities.

“We are taking judicious price increases and have embarked on cost saving initiatives to mitigate the impact on our margins. However, the input cost pressure, combined with portfolio mix changes, has led to a near-term impact on the operating margins which are expected to be lower by around 200 bps as compared to Q1 FY22, with margins normalising to pre-Covid levels for Q1 despite unprecedented inflation,” Dabur India said.

Though there are near-term inflationary pressures, the company continues to target higher than industry growth on a medium to long term perspective with stable margins. To drive long-term sustainable growth, it added that it is continuing to invest in its power brands, innovation, advertising and promotion and distribution expansion.

Published on July 06, 2022
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