Dabur projects single-digit revenue growth in Q1 FY25, stock rise 4%

The leading consumer goods producer reported sequential improvement in demand trends and a pick-up in rural growth in its business updates for the June 2024 quarter. The FMCG major expects an improvement in demand in the coming months due to a normal monsoon and the continued focus of the government on macroeconomic growth.

Dabur said that its domestic business is expected to record mid-single-digit volume growth during the quarter. Its home and personal care (HPC) and healthcare segments are poised to grow in high-single digits. The company mentioned that while out-of-home consumption during the quarter was impacted negatively by a rise in temperature, its beverage segment showed good momentum.

In the food category, Badshah Masala continued to perform well and is expected to post strong volume-led growth in the high teens.

Shares of Dabur India opened at ₹610.4 apiece, marginally up from the previous close of ₹606.45 and gained as much as 4.37% to hit an intra-day high of ₹633 on the NSE.

Dabur expects the international business to post strong growth in constant currency terms. However, the company added that severe currency depreciation in Turkey and Egypt impacted its translated growth.

The company said that its gross margins are likely to expand because of rollover price increases and cost-saving initiatives. The consumer goods manufacturer claimed that it has continued to invest strongly in its brands leading the Advertising and Promotional (A&P) spending growing ahead of the revenue.

The company expects its operating profit to grow marginally compared to revenue. Dabur India reiterated its focus on expanding distribution reach and investing aggressively in its key brands to boost its market shares.

Dabur India shares closed 2.94% higher at ₹624.3 apiece on the NSE.