Shares of Dabur India tumbled over 7 percent to hit a 52-week low on April 4, following a lackluster business update for the quarter ending March 2025 (Q4FY25). The company indicated subdued domestic demand trends, offset by resilient rural sales and strong international performance.
Mixed Performance Across Channels and Markets
According to Dabur’s regulatory filing, rural markets outpaced urban markets in terms of growth during the fourth quarter. While modern trade, e-commerce, and quick commerce channels sustained their positive momentum, general trade remained under pressure. Overall, the FMCG sector continued to experience sluggish volume trends, impacting the company’s domestic performance.
On the international front, key markets such as the Middle East and North Africa (MENA), Egypt, and Bangladesh delivered strong performances. Dabur expects robust double-digit growth in constant currency terms from its international business, driven by resilient demand and strategic expansion.
Domestic Headwinds Weigh on Revenue
Despite strong performance in its international markets, Dabur’s domestic FMCG segment faced headwinds. The company cited the impact of a delayed and truncated winter season, as well as a slowdown in urban demand, as key factors affecting sales. While its Foods business, including brands such as ‘Hommade’ and ‘Badshah,’ continued to post double-digit growth, the overall India FMCG segment is projected to decline in mid-single digits. Consequently, Dabur’s consolidated revenue for Q4FY25 is expected to remain flat compared to the previous year.
Margin Pressure Amid Cost Challenges
Dabur also expects operating profit margins to contract by approximately 150-175 basis points on a year-on-year basis. The company attributed this decline to inflationary pressures and operating deleverage. Despite these near-term challenges, Dabur remains focused on long-term profitable growth through brand investments, enhanced market strategies, and operational efficiencies.
“We remain committed to driving profitable growth despite the current headwinds in demand. Our internal efforts, such as investing in brand building, enhancing go-to-market strategies, and increasing operational efficiency, will enable us to achieve this objective. Furthermore, we anticipate that the incentives outlined in the recent Union budget will stimulate consumption and facilitate a recovery in the FMCG sector which Dabur is well placed to capitalise on,” said the filing.
Stock Performance and Market Reaction
Following the business update, Dabur’s stock dropped as much as 7.2 percent to ₹459.65, marking its lowest level in 52 weeks. The FMCG major is now over 31 percent below its 52-week high of ₹672.00, recorded in September 2024. Over the past year, the stock has shed 7 percent, reflecting investor concerns over demand trends and margin pressures.
In recent months, the stock has experienced fluctuations. While it gained 4.5 percent in January, it declined by 7 percent in February before recovering 2.6 percent in March. The latest sell-off indicates renewed concerns among investors regarding the company’s near-term growth prospects.
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