FMCG major Dabur announced that the company is expected to post a mid-single digit decline in its consolidated revenue for the second quarter of FY25 due to reduced consumer demand and consumer offtake caused by extreme weather events such as floods and heavy rains. In a regulatory filing, Dabur said that this has impacted its business especially in the beverage category. However, it maintained that the company’s international business is expected to register double digit constant currency growth in topline.
Dabur released updates on its performance during the July-September quarter. The FMCG firm said that during the last few quarters, it has seen disproportionately higher growth in organised channels, viz, MT, e-commerce and quick commerce which has led to increase in inventory levels in the general trade (GT) channel impacting the distributor ROI. In order to correct the distributor inventory in the GT channel, the company said that it has taken an important strategic decision, which while leading to a temporary decline in topline, is essential for the long-term health and hygiene of business.
Furthermore, Dabur said that it’s Badshah Masala business continued to perform well during the quarter, growing in double digits. Dabur had, last year, acquired a 51 per cent stake in Badshah Masala for a cash consideration of Rs 587.52 crore. Consequently, Badshah Masala became a subsidiary of Dabur.
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In the second quarter, Dabur said that the firm is committed to continue to invest behind its brands, however, it added, as a result of a lower primary sales, the company’s 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.
“We will continue to invest strongly in marketing and media initiatives, building distribution infrastructure and enhancing our backend capability. By streamlining the GT channel and with the strong growth momentum in alternate channels we expect revenue growth to revive from October 2024 onwards,” Dabur said.
From: financialexpress
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