Dabur India said its India business is expected to report revenue growth in “mid-single digits” for the quarter ended September 30, 2022 amidst inflationary challenges. It also pointed to some pressures seen in rural markets in terms of liquidity during the quarter. But the company expects factors such as moderating inflation and festival season to support consumption growth in the second half of the fiscal year.

In a BSE filing on Thursday, the FMCG major said geopolitical situation continued to impact the business with unprecedented inflation during the quarter leading to weak demand trends across categories. “Urban markets were driven by modern trade and e-commerce which saw double-digit growth. Rural markets witnessed some pressure in terms of liquidity. Going forward, moderating inflation and festival season should support consumption growth in the second half of the fiscal,” it added.

The company said despite these challenges, its India business had a steady performance and is expected to report revenue growth in mid-single digits. Overall consolidated revenue is also expected to grow at mid-single digit, the FMCG major added.

Gross margins impacted

The company said that peak inflation levels impacted its gross margins in Q2. “ The input cost pressure led to a near term impact on operating margin which is expected to be lower by around 150-200 bps as compared to Q2 FY22 but will see sequential improvement. With commodity prices easing, inflation is expected to ease in H2 FY22 leading to y-o-y improvement in operating margins,” it said.

Category growth

The company’s food and beverage vertical witnessed robust double-digit growth in the September quarter. While home and personal care portfolio is expected to record mid-single digit growth, healthcare vertical is expected to see muted performance during the quarter on the back of high Covid base.

“International business is expected to post double-digit revenue growth in constant currency. However, some of our markets like Turkey and Egypt continued to see currency devaluation during the quarter impacting the translated growth,” the company said.

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