Dabur India sees mid- to high-single-digit Q3 revenue growth

BENGALURU (Reuters) -Dabur India said on Thursday it expects mid- to high-single-digit growth in its consolidated revenue for the third quarter ended Dec. 31, as demand for its consumer goods in rural areas continued to lag urban regions and pricing growth remained subdued.

The company reported a 3.4% revenue growth in the Dec quarter a year ago, and a 7.3% year-on-year revenue growth in the September 2023 quarter.

Dabur is the first consumer company to report third-quarter sales trends, with analysts expecting a delayed winter and weak festival demand to drag results.

The company, too, cited the delay in the onset of the winter season for its low- to mid-single-digit revenue forecast for its healthcare segment, while it said it expects its home and personal care (HPC) segment to record mid-single-digit growth.

The HPC segment accounted for 51.5% of domestic sales in the September quarter. The healthcare and food and beverage businesses accounted for 30.3% and 18.3% of domestic sales, respectively.

“Weak rural volume, trailing urban figures in the past year remain persistent,” Elara Capital analysts said in a note on Thursday.

“Further, low farm income and the emergence of small regional firms are hurting large, listed companies.”

However, Dabur expects gross margins to likely expand, led by moderating inflation and cost-saving initiatives.

It also sees operating profit growing slightly ahead of the revenue, and improvement in operating margins.

In addition, the company expects its international business to register double-digit growth in constant currency terms, led by good momentum in the Middle East and North Africa (MENA) region.

The segment accounted for more than a quarter of total sales for Dabur in the September quarter.

(Reporting by Ashish Chandra in Bengaluru; Editing by Sonia Cheema and Janane Venkatraman)