Company Update : Dabur by Motilal Oswal Financial Services Ltd
Consol. sales and PAT to grow in double digits
Demand trends
* Consumer sentiment remained resilient despite geopolitical tensions in the Middle East and hyperinflationary pressures in some international markets.
* Business performance improved sequentially, indicating a recovery in demand as the quarter progressed.
* In India, both urban and rural demand remained healthy, with rural continuing to grow faster than urban.
* Additionally, General Trade improved sequentially, reflecting robust traction across both rural and urban markets.
* Emerging channels such as E-commerce, Quick Commerce, and Modern Trade continued to witness strong double-digit growth.
* In the international business, despite temporary disruptions in the Middle East, consumption trends remained resilient in several key markets.
* Management expects improved consumption in international markets in the coming quarters, especially if the Middle East situation stabilizes.
India business performance
* The Indian FMCG business witnessed a sequential recovery in demand and is likely to record double-digit growth.
* Growth was broad-based, supported by healthy demand, strong execution, and continued investments in brands
International business
* The international business is expected to report high-teen growth in INR terms, despite severe headwinds in the Middle East.
* Key international markets such as Egypt, Turkey, Bangladesh, and the UK are each expected to deliver strong double-digit growth in INR terms.
* The business remained resilient despite geopolitical disruptions in the Middle East and hyperinflationary conditions in some overseas markets.
* Management remains optimistic about a further improvement in consumption across international markets in the coming quarters, particularly if the conditions in the Middle East normalize.
Cost and margins
* The quarter witnessed elevated inflation, especially in the haircare segment.
* The company offset inflationary pressure through calibrated price hikes.
* Operating margins are expected to remain stable despite raw material cost pressures.
* The company indicated that pricing and cost management supported profitability during the quarter.
Consolidated performance & outlook
* Consolidated revenue is expected to deliver double-digit growth.
* PAT is also expected to grow at a double-digit rate, reflecting stable profitability despite cost pressures.
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