Jobaaj Stories
Indian FMCG major Dabur India released its business update for Q3FY23 wherein the company detailed the weakening demand in the near future, resulting in the stock witnessing a significant decline.
The company announced that demand for the industry appeared weak and rural markets remained under pressure, greatly enhanced by the late arrival of winter in north India. Moreover, due to adverse macroeconomic conditions and muted category growths in the quarter, the company has stated that the company is set to report low to mid-single-digit revenue growth.
“Demand trends for the industry remained weak during Q3 FY23 with rural markets continuing to remain under pressure. This was further accentuated by the 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 reduction 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.” the company said in its regulatory filing.
However, not all was bad for the company during the Oct-Dec 2022 quarter. The healthcare portfolio of the company resumed its positive growth trajectory. At the same time, the Food & beverage business continued to trend at robust levels but is forecasted to see some moderation due to the early onset of the festive season.
Moreover, the international business of the company is expected to report double-digit growth and gross margins are expected to be marginally better sequentially, but the operating margins will be affected and are expected to be 200-250 bps lower than last year’s.
The stock of Dabur India was heavily affected as it declined 4.1% in two trading sessions and currently trades around Rs 533.05.
Article by Aman Agarwal.
