New Delhi : Dabur India Ltd's stocks dropped by almost 8 per cent on Thursday as the company announced that its profits for the second quarter would be affected by decreased primary sales caused by heavy rain and floods in certain areas of India, which have impacted out-of-home consumption and customer demand despite some positive trends. The stock plummeted by 7.69 percent to reach Rs 571.25 on the BSE. It fell by 7.75 per cent to Rs 571 at the NSE.
Dabur India announced in its latest update on Tuesday that it anticipates a mid-single-digit decrease in total revenue for the second quarter, attributed to a decrease in distributor inventory in the general trade (GT) channel. "In Q2 FY25, heavy rain and floods in some areas of the country affected out-of-home consumption and consumer offtake, despite seeing some improvement in demand trends." Because of this, the company stated that there was a noticeable effect on their business, particularly in the beverage section. Dabur India noted that in recent quarters, there has been a significant increase in growth in organised channels like modern trade (MT), e-commerce, and quick commerce, causing inventory levels to rise in General Trade (GT) and affecting Distributor Return on Investment (ROI).
The company made a crucial strategic choice to address distributor inventory in the GT channel and enhance their ROI. It stated that although it resulted in a temporary decrease, this proactive measure is necessary for the future well-being and cleanliness of our business. Due to this adjustment, Dabur indicated that they anticipate a slight decrease in consolidated revenue for the quarter. The Indian business has undergone this correction, while the company expects the international business to experience "double-digit constant currency growth in topline."
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