back to top

Call us at : 011 4106 5208 / +91-7011197831

Dabur Forecasts Subdued Q4 as India FMCG Segment Faces Mid-Single Digit Drop

Dabur India Ltd., one of India’s leading fast-moving consumer goods (FMCG) companies, has projected a lackluster performance for the fourth quarter of fiscal year 2025 (January-March 2025), with its India FMCG business expected to see a mid-single digit decline in revenue. The company, known for its popular brands like Dabur Chyawanprash, Real juices, and Vatika hair care products, cited persistent sluggish demand and inflationary pressures as key factors weighing on its domestic performance in a provisional business update released today.

Dabur Forecasts Subdued Q4 as India FMCG Segment Faces Mid-Single Digit Drop

A Challenging Quarter for FMCG

Dabur’s consolidated revenue for Q4 FY25 is anticipated to remain flattish, a stark contrast to earlier quarters where the company had managed modest growth despite challenging market conditions. The India FMCG segment, which forms the backbone of Dabur’s operations, is projected to decline by mid-single digits, reflecting subdued volume trends across the sector. “FMCG volume trends continued to be muted during the quarter,” the company stated, pointing to a combination of urban slowdown, delayed winter effects, and weakness in general trade channels as contributing factors.

While rural markets showed resilience, growing ahead of urban areas, the overall demand environment remained tepid. Inflationary pressures further compounded the issue, squeezing consumer spending power and impacting sales of discretionary and seasonal products like beverages and healthcare items. The delayed onset of winter, in particular, hurt Dabur’s healthcare portfolio, which includes immunity-boosting products like Chyawanprash, a category that typically sees a spike in colder months.

Channel Dynamics and Strategic Adjustments

The company highlighted a shift in channel performance, noting that organized trade channels, such as modern retail and e-commerce, continued to perform relatively better than general trade. However, weakness in the latter—where Dabur has historically had a strong presence—dragged down overall numbers. In response, Dabur has been working to recalibrate its distribution strategy, focusing on optimizing inventory levels and enhancing its presence in high-growth channels like quick commerce.

Despite the domestic challenges, Dabur’s international business offered a silver lining, with expectations of double-digit growth in constant currency terms, driven by robust demand in markets like the Middle East, North Africa (MENA), Egypt, and Turkey. However, currency depreciation in key regions such as Turkey and Egypt is likely to temper this growth when translated into rupee terms, projecting only mid-single digit growth in reported figures.

Profitability Under Pressure

Dabur also signaled that profitability would take a hit in Q4, with operating margins expected to decline in the mid-to-high teens percentage range. This comes despite some relief from stable commodity prices and cost-saving initiatives, which have supported gross margin expansion. The company attributed the margin pressure to its deliberate strategy of maintaining high advertising and promotion (A&P) spends to bolster brand visibility amid a competitive market. “We continued to invest strongly behind our brands, with A&P spends growing ahead of revenue,” Dabur noted, adding that operating profit is still expected to grow marginally ahead of revenue.

Market Reaction and Outlook

Following the announcement, Dabur’s shares, which closed at ₹496 on the National Stock Exchange (NSE) today, are likely to face scrutiny from investors when trading resumes tomorrow. The stock has already seen a 9% decline in 2024, marking its steepest annual drop since 2008, reflecting broader concerns about the FMCG sector’s growth trajectory amid inflationary headwinds and shifting consumer behavior.

Looking ahead, Dabur remains cautiously optimistic. The company pointed to positive macroeconomic indicators, such as a normal monsoon forecast and a strong rabi crop harvest, as potential catalysts for a consumption recovery in the coming months. “With rural markets showing signs of resilience and our focus on brand investment and distribution expansion, we are well-positioned to capitalize on emerging opportunities,” the company stated.

Industry Context

Dabur’s subdued forecast aligns with broader trends in the Indian FMCG sector, where companies have grappled with uneven demand recovery post-pandemic. Peers like Hindustan Unilever and Nestlé India have also flagged challenges in rural markets and inflationary pressures, though some have reported early signs of improvement. Analysts suggest that while Dabur’s Q4 performance may disappoint, its diversified portfolio and strong rural skew could aid a rebound if consumer sentiment improves.

For now, Dabur’s management is banking on its long-term strategies—ramping up innovation, expanding manufacturing capabilities, and strengthening its organizational framework—to navigate the current downturn. As the FMCG giant braces for a tough quarter, all eyes will be on how it balances profitability with growth in an increasingly competitive landscape.

Dabur Share Price was trading around ₹466, reflecting a significant drop of nearly 7% due to a weak Q4 update, as noted by CNBC TV18.

Add Business Connect magazine to your Google News feed

Must Read:-

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Startup's

Taksha Smartlabz

Taksha Smartlabz EDUCATION FOR ALL: Transforming Lives And Careers With the world sheltering itself inside their houses in a bid to escape from the virus, online education has been seen becoming...

Stock Market

Person of the month

Related Articles

China Strikes Back: 34% Tariffs on US Products and...

In a swift and decisive countermeasure, China has escalated the ongoing trade war with the United States, imposing a...

Apple’s $300 Billion Market Value Plunge: A Casualty of...

In a stunning blow to one of the world’s most iconic tech giants, Apple Inc. saw its market value...

TEST Movie Trailer: A Glimpse into the Highly Anticipated...

The wait is finally over! The trailer for the highly anticipated movie, TEST, has been released, giving fans a...

6th BIMSTEC Summit: A New Era of Regional Cooperation...

The 6th Summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is set to...