Dabur hopes for rural revival

Dabur India Ltd's shares put up a poor show in 2023, falling by about 1% compared to the 29% jump in the sector index, Nifty FMCG.

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A big worry for the fast-moving consumer goods company has been subdued volume performance in the previous few quarters. Sure, last week's business update for the December quarter (Q3FY24) offers comfort, but only slightly.

Dabur said it saw sequential improvement in demand, although growth in rural areas has lagged that in urban markets. Still, early signs of a revival in consumption would help volume growth inch up.

"Unlike most consumer companies, Dabur witnessed a pick-up in rural demand, which should bode well in the coming quarters, given its higher saliency in rural markets," said Nomura Financial Advisory and Securities (India) in a report on 4 January. Analysts estimate rural markets to account for 45-50% of Dabur's revenue.