Dabur India flags up to 200 bps margin hit in Q2 as inflation bites

BENGALURU: Consumer goods major Dabur India on Thursday warned that soaring inflation during the second quarter could lower its operating margin by around 150-200 basis points year-on-year, while revenue likely grew in mid-single digits.

"During the quarter, inflation was at peak levels which impacted gross margins," Dabur said in a regulatory filing. However, the maker of toothpaste and packaged juices expects easing commodity prices to help improve margins in the second half of the year.

India's retail inflation accelerated to 7% in August on surging food prices after dipping to 6.71% in July. Consumer price inflation data for September is expected next Wednesday.


Urban markets were driven by modern trade and e-commerce which saw double-digit growth, while rural markets witnessed some pressure in terms of liquidity, it said.

India revenue is expected to grow in mid-single digits, but international business is seen growing in double digits.

Dabur's consolidated revenue grew 8.1% in the June-quarter, with an operating margin of 19.62%.

The company is due to report earnings for the second quarter ended September on Oct. 26.

Dabur shares jumped around 15% in the quarter, in line with gains in the Nifty FMCG index.