Dabur India witnessed a 6% decline in its stock price following a weak Q4 FY25 update, highlighting continued challenges in the Fast-Moving Consumer Goods (FMCG) sector. The company reported subdued volume trends, with its India FMCG business likely to decline in mid-single digits due to delayed winters, an urban market slowdown, and weakness in general trade.
Despite these challenges, rural markets remained resilient and grew ahead of urban areas, while organized trade channels such as modern trade, e-commerce and quick commerce sustained their growth momentum. However, general trade continued to struggle, adding to the pressure on domestic revenue.
On the international front, Dabur’s key markets in the MENA region, Egypt, and Bangladesh posted strong performances, contributing to robust double-digit growth in constant currency terms. In contrast, the company’s domestic Foods business, including brands like ‘Hommade’ and ‘Badshah,’ continued to perform well, recording double-digit growth.
Despite these bright spots, consolidated revenue for Q4 FY25 is expected to remain flat, reflecting the overall slowdown in consumer demand.
The company’s profitability has also taken a hit, with operating profit margins projected to contract by 150-175 basis points year-on-year (YoY), primarily due to inflationary pressures and operating deleverage. This comes as a disappointment, considering Dabur’s previous Q2 FY25 guidance, where it had projected mid-to-high single-digit revenue growth for H2 FY25, a target that now appears to have been missed.
Moreover, in Q3, Dabur had expressed confidence that consumer sentiment had bottomed out and was set to improve, but the latest update suggests demand challenges persist.
Looking ahead, Dabur remains focused on driving profitable growth through strategic investments in brand building, go-to-market expansion, and operational efficiency.