Dabur India witnessed a slowdown in revenue growth during the quarter ended March 31, 2024. The company expects mid-single-digit percentage revenue growth in Q4, compared to a 7% rise in the previous quarter. This decline in revenue growth has raised concerns among investors, leading to a nearly 5% drop in Dabur’s shares. Dabur attributed the disappointing Q4 revenue growth to sluggish demand trends during the quarter. The company faced challenges in driving consumer demand, impacting its overall revenue growth. In the previous quarter, Dabur experienced inorganic revenue growth of around 2.3% due to the acquisition of Badshah.
In Dabur’s India business, the Home and Personal Care (HPC) segment is expected to grow in high-single digits during Q4. However, the Healthcare and Food and Beverages (F&B) segments are anticipated to register low single-digit growth. The F&B segment faced a high base from the previous year, while the Healthcare portfolio was impacted by a delayed winter.
Despite the disappointing Q4 performance, Dabur remains optimistic about the future and expects consumption to pick up in the coming months. The company maintains a positive outlook for the rabi crop harvest and forecasts a normal monsoon, which could drive demand.
Dabur plans to invest in its brands and increase advertising spending to strengthen its market position. The company expects its operating profit to grow slightly ahead of revenue, leading to an improvement in year-on-year operating margins. Dabur aims to expand its gross margins through cost-saving initiatives and deflation in input costs.
RTM Watch’s Take
Dabur’s disappointing Q4 revenue growth reflects the challenges faced by the company in driving consumer demand. However, the company’s positive outlook for the future, along with its strategies to invest in brands and improve operating margins, indicates its determination to overcome these challenges. As Dabur focuses on innovation, brand building, and cost optimization, it has the potential to regain momentum and deliver stronger performance in the coming quarters.
