Dabur plans to correct distributor inventory, costing a dip in topline

The business in beverages category suffered some impact due to rains, Dabur said.

FMCG major Dabur India said it is seeing some improvement in demand however extreme weather events such as floods and heavy rains have impact consumption and consumer offtake during the September quarter, according to a statement on October 1.

The business in beverages category suffered some impact due to rains, Dabur said.

The company mentioned about 'disproportionately higher growth' in e-commerce and quick commerce along with modern trade in last few quarters, leading to increased inventory in the general channel, hurting distributors' RoI. As a result, Dabur said it will be correcting distributor inventory, at the cost of a dip in topline. "This proactive step, while leading to a temporary decline in topline, is essential for the long-term health and hygiene of the business." said Dabur.

Due to this correction, Dabur will be posting a mid-single digit decline in the consolidated India revenue for the September quarter.

Dabur said its profitability will be affected in Q2FY25, and the operating margin is expected to fall in mid-to-high teens on account of higher investment and deleveraging.

The international business is expected to register double-digit constant currency growth in topline, Dabur's statement said, and especially the Badshah Masala business is poised to grow in double digit for the quarter.

Dabur added that its investment in distribution infrastructure will continue, and hopes to revive revenue growth from October onwards, helped by momentum in alternate channels.