Dabur India Ltd has announced an update on the performance and demand trends witnessed during the quarter ended June 30, 2023 (Q1 FY24).

During the quarter, trends in both urban and rural India have shown signs of improvement. One of the key contributing factors to this positive development has been the reduction in inflation. Sequential moderation in inflation has positively impacted consumer spending power and is resulting in gradual improvement in offtakes in the industry.

Dabur's consolidated business including recently acquired Badshah Masala, is expected to register growth exceeding 10%.

The company’s International Business is expected to report a strong performance with double-digit growth in constant currency. Softening of inflation in international markets is having a positive impact on the business.

The Healthcare and HPC businesses in India have performed well and are projected to achieve doubledigit growth backed by mid-single digit volume growth. Within HPC, the Home Care category is expected to report value growth in high teens and Oral & Hair care categories growing in low double digits. However, the F&B business, and in particular, the summer centric Beverages portfolio, had a muted quarter.due to unseasonal rains and a moderate summer. Consequently, India business is expected to post growth in high single digit.

Badshah Masala showed strong momentum growing in high teens.

The reduction in inflation is expected to lead to year-on-year gross margin expansion. The company is channelizing a major part of the gross margin expansion towards ramping up advertising and promotion (A&P) spends to ensure long-term success. Consequently, operating profit should grow in line with revenue growth. However, PAT growth will be lower than operating profit growth mainly due to brand amortization expenditure on account of acquisition.

For the full year, Dabur India expects improvement in gross margins to continue. The gross margin expansion will be allocated towards increasing our A&P spends and is also expected to result in improvement in'our operating margin on an annualised basis.

Overall, Dabur India is encouraged by the improving trends observed in the urban and rural markets in India, as well as the positive performance of our business segments. We remain committed to driving growth and profitability while navigating market challenges and capitalizing on opportunities for the remainder of the fiscal year.

This update provides an overall summary of the performance and demand trends witnessed during the quarter ended June 30, 2023 (01 FY24). This will be followed by detailed financial results and earnings presentation once the Board of Directors of the Company approves the consolidated and standalone financial results for the quarter ended June 30, 2023.