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Credit: X/@DaburIndia
Bengaluru: Fast moving consumer goods (FMCG) maker Dabur India expects its consolidated revenue to grow in a low single digit for its October-December quarter owing to a subdued demand in the healthcare and beverage segment.
In its quarterly business update on Friday, the honey to hair oil maker said that it expects the profit to remain flat, on an annual basis.
Dabur is also expected to post a flattish operating profit or earnings before income and tax (EBIT) growth in Q3.
The company had reported a decline in its profit of almost 18% in the second quarter of the current fiscal year (Q2FY25) on account of high food inflation and squeeze in urban demand.
“The rural consumption was resilient in Q3FY25, and continued to grow faster than urban,” it said in its update in an exchange filing. The persistent subdued urban demand has been a pain point for a lot of consumer goods companies including Dabur, resulting in a poor quarterly performance.
The Ghaziabad-headquartered multinational FMCG also said that its general trade continues to remain under pressure, however, alternative channels like modern trade, e-commerce and quick commerce sustained their strong trajectory of growth.
Meanwhile, the health care and personal segment is expected to grow by mid to high single digit.
Dabur also cited inflationary pressures in certain segments for the third quarter of the current fiscal, which were mitigated by price hikes and cost efficiency initiatives. It may be recalled that tea, palm oil and copra experienced a sharp shoot up in their prices, leading to several consumer goods firms taking a price hike in these items and products.
However, Dabur believes that with improving macroeconomic indicators, FMCG growth will revive and show a sequential improvement going forward.
On the contrary, its peer Marico is expecting the consolidated quarterly revenue to rise in the mid-teen percentage range on the back of improving rural consumption and stable sentiment in urban vis-à-vis the preceding quarter and higher demand for its Parachute and Saffola brands of oils.
"The rising trend in input costs is expected to result in a higher-than-anticipated gross margin contraction on a year-on-year basis," Marico said in an exchange filing on Friday.