Dabur on Thursday said its consolidated growth including recently acquired Badshah Masala is expected to be at 10 per cent, the company announced through an exchange filing.
The company said that during the first quarter of this financial year both urban and rural India has shown signs of improvement. According to Dabur, one of the major reasons for the positive development is the reducing inflation as it has positively impacted consumer spending power and it has resulted in gradual improvement in offtakes in the industry.
Dabur international business
Dabur's international business is expected to report strong performance with double-digit growth in constant currency. Softening of inflation in international markets has also helped the company.
Dabur's Healthcare and HPC Business
The company's Healthcare and HPC businesses in India have performed well and are projected to 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 the high single digit.
Badshah Masala showed strong momentum growing in the high teens.
Dabur expects the PAT growth to be lower than operating profit growth mainly due to brand amortisation expenditure on account of acquisition.
Dabur in the regulatory filing said, "The reduction in inflation is expected to lead to year-on-year gross margin expansion. We are channelizing 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."
The company expects improvement in gross margins to continue. The gross margin expansion will be allocated towards increasing Dabur's A&P spends and is also expected to result in improvement in its operating margin on an annualised basis.
Dabur in a statement 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."
