Dabur India slipped 5.54% to Rs 584.60 after the company expects to post a mid-single-digit decline in consolidated revenue for the September quarter (Q2 FY25), primarily attributed to heavy rains and floods affecting various regions of the country.
While demand trends were witnessing some improvement, heavy rains and floods in various parts of the country impacted out-of-home consumption and consumer offtake during Q2 FY25. As a result, the company experienced some impacts on its business, especially in the beverage category.On account of this correction, the company is expected to post a mid-single digit decline in consolidated revenue for the quarter. While this correction has happened in India business, the international business is expected to register double digit constant currency growth in topline. Badshah Masala business continued to perform well growing in double digits during the quarter.
In line with our commitment to continue to invest behind its brands, the A&P investments continued during the quarter. However, as a result of a lower primary sales, our profitability will be impacted during the quarter and the operating margin for the quarter is expected to decline in the range of mid to high teens due to deleverage and continued investment behind brands. This temporary corrective action is a necessary step to strengthen the GT channel and enhance our efficiency and growth going forward, the firm stated in the exchange filing.
The firm stated that it will continue to invest significantly in marketing and media initiatives, build distribution infrastructure, and enhance its backend capabilities. By streamlining the GT channel and capitalizing on strong growth momentum in alternate channels, the firm expects revenue growth to revive starting in October 2024.
During the last few quarter, the company has witnessed disproportionately higher growth in organized channel i.e MT Ecommerce and Quick Commerce which has led to increase in inventory levels in the General Trade (GT) channel impacting the distributor ROI. The company has taken an important strategic decision to correct distributor inventory in the GT channel and improve their ROI. This proactive step, while leading to a temporary decline in topline, is essential for long-term health and hygiene of the business.
Dabur India is among the top four FMCG companies in India. It has business interests in healthcare, personal care and food products. The company offers products in over 100 countries across the globe, covering health and personal care segments across the herbal and natural space.
The companys consolidated net profit increased 8.27% to Rs 494.35 crore in Q1 FY25 as compared with Rs 456.61 crore in Q1 FY24. Revenue from operations jumped 6.98% YoY to Rs 3,349.11 crore in Q1 FY25.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content