Demand trends for the industry remained weak during Q3 FY23 with rural markets continuing to remain under pressure. This was further accentuated by late onset of winter in north India. However, early signs of moderate recovery were visible towards latter part of the quarter coupled with some abatement in inflation. The improving macroeconomic environment, positive steps being taken by the government and the expected stimulus of the upcoming Union Budget should help speed up the recovery of the industry.

On account of challenging macro-economic environment and muted category growths in the quarter, Dabur's India business is expected to report low to mid-single digit revenue growth. Healthcare portfolio returned to positive growth trajectory, still navigating high bases of the pandemic. F&B business continues to trend at robust levels. During the quarter, F&B's growth will see some moderation on account of early onset of the festive season.

Continuing the trend of double-digit CAGRs of the business in H1 FY23, the 3-yearCAGRs in this quarter will be in high single digits for HPC and Healthcare and double digits for Food & Beverages. The organized channels of Modern Trade and E-commerce continued to report double digit growth. Rural markets showed early signs of recovery towards the end of the quarter and could be further bolstered by the upcoming harvest season, MSPs and expected spending by the government.

International Business is expected to post double-digit revenue growth during the quarter in constant currency. However, due to currency headwinds in Turkey and Egypt, the reported growth in INR would be impacted. Overall, the consolidated revenue is expected to report low to mid-single digit growth.

Inflation started to cool off during the quarter. As a result, gross margins will be marginally better sequentially. The adverse currency movements in International Business and inflation will lead to near term impact on operating margin, which is expected to be lower by 200-250 bps as compared to Q3 FY22.

While the environment has been challenging, the company has stayed the course and continues to invest strongly behind Power Brands, Innovation, Distribution expansion and a strong back end which will enable us to improve our market shares and achieve profitable and sustainable growth.

This update provides an overall summary of the performance and demand trends witnessed during the quarter ended December 31, 2022 (Q3 FY23). 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 December 31, 2022.