Dabur India maintains margin guidance despite inflation, CEO says 'futile to spend so much on advertising'

As inflation weigh heavy and urban consumption lags, FMCG major Dabur India retained its margin guidance for the fourth quarter, while aiming for mid-single-digit top-line growth. At the current juncture, with the inflationary pressures seen on raw materials, Dabur India plans to mitigate costs through price increases, savings initiatives, and operational leverage.

With these factors weighing, Dabur India's A&P spends for the quarter have reduced. "I think it's futile effort to spend so much of money on advertising. It's important to consolidate your position," said CEO Mohit Malhotra in an earnings call with analysts, noting that while the 'pie' remains the same, growth is hard to get.

"Whenever the luxury is available in terms of margins, you want to invest money behind advertising to grow your brand. But when luxury of spend is not there, then you have to have a balanced approach. So you have to conserve money to maintain your margins," Malhotra added.

As a result, Dabur India will prioritize targeted spending to boost market share and attract more consumers. However, if margins improve, Dabur (India) will reinvest the excess into advertising. When market growth picks up, the Chyawanprash-maker will ramp up its A&P efforts.