Dabur estimates first quarter sales rose over 10% as inflation eases

Dabur India Ltd said on Thursday that it estimates first-quarter sales increased by more than 10%, as easing inflation allowed customers to spend more on the consumer goods company’s products.

Dabur said demand trends in both urban and rural areas of India improved during the quarter.

The country’s annual retail inflation eased to a more than two-year low of 4.25% in May as cost pressures on food items eased.

Lower inflation is expected to lead to an annual expansion in gross profit margin in the quarter ended June 30, according to the company, which makes Dabur Red toothpaste and RealActiv bottled juice.

Dabur also expects the improvement in gross margin to continue for the full year.

The company said its international business is expected to post double-digit growth in the first quarter, while its India business is expected to post high single-digit growth.

The healthcare, home and personal care business in India is expected to grow in double digits, supported by mid-single-digit volume growth. It added that unseasonal rains and mild summers led to a quiet quarter in the company’s food and beverage sector.

Dabur expects after-tax earnings growth to be lower than operating profit growth due to the expense related to the acquisition of the spice and spice manufacturer Badshah Masala.

(Reporting by Ashish Chandra in Bengaluru; Editing by Savio D’Souza and Shelby Majumdar)