Dabur India Ltd. shares declined nearly 4 percent in Friday’s trade extending its losses for the second straight day following the announcement of weak quarterly results for the quarter ended March 2023. Despite a dip in profit in the March quarter, Dabur’s Chief Executive Officer, Mohit Malhotra is optimistic about the volume growth in future.

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In an interview with CNBC-TV18, Malhotra noted that the company is not at all worried about the volume growth, as its secondary growth has been around 10 percent in the last quarter, along with a case sales growth of 11 percent.

As a result, the company expects volume growth going forward to be in mid-to-high single-digits. Further, there is around a 6 percent increase in price, so the company sees high-single to low-double digit revenue growth in the financial year 2023-24.

Malhotra stated that Dabur India will see a gross margin expansion and increased ad spending, on account of a big-time softening of inflation. The company will put a part of the expansion into media.

The company sees the operating margin in the year expand by 50-100 basis points. This means that Dabur India’s EBITDA margin will be in the range of 19-19.5 percent in financial year 2024, according to Malhotra.

The company believes that the margin expansion needs to be sustained, which will happen only by investment in media and demand environment recovery.

Malhotra states that the company expects a low double-digit value growth next year, with the food and beverage (F&B) business targeted to grow at a 10-15 percent going forward. The F&B segment’s business contribution to sales of the company is approximately 20 percent of the total mix.

Dabur India’s organic food business, which includes Badshah Masala and the beverages business is expected to see a turnover of Rs 5,000 to Rs 6,000 crore, while the company has created a separate vertical called Dabur Therapeutics, stated its CEO.

The consumer goods company on Thursday reported 0.5 percent drop in net profit at Rs 292.76 crore for the March quarter compared to Rs 294.34 crore in the same quarter a year-ago.

Shares of Dabur ended 4.7 percent lower at Rs 505.45.

First Published:May 5, 2023 4:12 PM IST