To invest significant portion of Q2 gross margin expansion in advertising: Dabur India

A significant portion of gross margin expansion in Q2 will be channelled into boosting advertising and promotion (A&P) spending, Dabur India said in its quarter updates.

Dabur India is expecting "higher gross margin expansion than that seen in Q1 FY24" aided by moderating inflation and our cost-saving initiatives.

"Consequently, operating profit is expected to grow in line with revenue and remain steady compared to the same quarter last year," Dabur said.

Helped by encouraging macro indicators, FMCG consumption is showing improvement year-on-year, though the recovery has been gradual, Dabur India said.

This quarter witnessed a mild summer and a slightly deficient monsoon. The festive season is later than normal this year due to which offtake related to festivals is delayed and will carry forward to the next quarter, it said.

"We expect recovery of consumption in both urban and rural markets in India due to improving macro indicators, increase in government expenditure and positive consumer sentiment," Dabur said.

The homegrown FMCG major expects a "mid to high single-digit growth" in its consolidated revenue during the July-September quarter.

"In India business, Healthcare and HPC segments are expected to grow in high single-digit," it said in an update for the quarter ending on September 30, 2023.

However, it anticipates the F&B business to remain "slightly below last year's revenue" on account of a mild summer and change in the festive season.

On its international business, Dabur said it is "poised for a strong performance, with double-digit growth in constant currency" led by markets such as the Middle East, Egypt and Turkey.

Further, the company said it remains committed to driving ahead of the category performance of its business segments and gaining market shares across its portfolio.

"We will continue to invest strongly behind our brands, distribution expansion, manufacturing footprint and digitisation initiatives," it said.

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