Consumer goods giant Dabur India issued a warning on Thursday, estimating that the second quarter’s high inflation might reduce its operating margin by 150 to 200 basis points compared to the prior year, even though revenue was anticipated to have grown by mid-single digits.
Inflation peaked throughout the quarter, which had an impact on gross margins, according to a regulatory filing by Dabur. In contrast, the manufacturer of toothpaste and bottled drinks anticipates that falling commodity prices would contribute to higher margins in the second half of the year. After falling to 6.71% in July, retail inflation in India increased to 7% in August as a result of rising food costs. On Wednesday, statistics on consumer price inflation for September are anticipated.
Urban markets showed double-digit growth in contemporary trade and e-commerce, but rural markets experienced some liquidity pressure, the report added. Mid-single-digit revenue growth is anticipated for India, but double-digit growth is anticipated for overseas business.
With an operating margin of 19.62%, Dabur’s consolidated sales increased by 8.1% in the June quarter. On October 26, the corporation must declare its financial results for the second quarter that ended in September. In line with increases in the Nifty FMCG index, Dabur shares increased by almost 15% in the third quarter.
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