On account of challenging macro-economic environment and muted category growths in the quarter, the management anticipates to report low to mid-single digit revenue growth
Shares of Dabur India dropped 4 per cent to Rs 552.15 in Friday’s intra-day trade, after personal care products company expected operating margins in December quarter (Q3FY23) to be lower by 200-250 basis points (bps) as compared to Q3FY22.
“The adverse currency movements in international business and inflation will lead to near term impact on operating margin. Inflation started to cool off during the quarter. As a result, gross margins will be marginally better sequentially,” the company said.
On account of challenging macro-economic environment and muted category growths in the quarter, the management anticipates to report low to mid-single digit revenue growth.
While the healthcare portfolio returned to positive growth trajectory, navigating high bases of the pandemic, food & beverages (F&B) business, too, saw healthy trend levels. However, the management also foresees moderation in F&B’s growth on account of early onset of the festive season.
The continued trend of double-digit CAGRs of the business in H1FY23, the 3-yearCAGRs in this quarter will be in high single digits for HPC and Healthcare, whereas double digits for Food & Beverages, said the management.
“The demand trends for the industry remained weak during Q3FY23, with rural markets continuing to remain under pressure. This, therefore, was further accentuated by late onset of winter in north India. However, early signs of moderate recovery were visible towards the latter part of the quarter coupled with some abatement in inflation,” the company added.
Moreover, improving macroeconomic environment, positive steps by the government and expected stimulus of the upcoming Union Budget should help speed up the recovery of the industry.
Besides, the international business, too, is expected to post double-digit revenue growth during the quarter in constant currency terms. However, currency headwinds in Turkey and Egypt may weigh growth in rupee terms. Overall, the management expects consolidated revenue to grow in low to mid-single digit.