Rural demand improving; gap with urban narrowing: Dabur

economictimes.indiatimes.com:

Rural demand is kicking in and the gap with urban is narrowing significantly, said Mohit Malhotra, chief executive of packaged goods maker Dabur India, which derives close to half of its annual sales from rural India. Addressing investors at the company’s 'Capital Market Day', Malhotra said: “A few years back, rural was leading the pack and driving growth.

But then it dropped below urban. While rural is still behind urban, the gap is narrowing significantly.”
While cooling inflation and early rains led to improvement in rural demand in the June quarter, rains have been erratic over the past two months, giving way to concerns about sustained recovery in rural demand — crucial for sustained growth of the FMCG sector.
Dabur, which makes Vatika shampoo and Real juices, saw its rural volumes increase 8% in the April-June quarter, compared to the industry average of 4%.
Malhotra said rural demand forms the company’s belly and that the company will continue to focus on it, with deeper distribution of its products in the hinterland.

He added, however, that unseasonal rains dented demand for its juices business. For the June quarter, Dabur had reported a 3.52% increase in year-on-year net profit at Rs 456.61 crore, while its revenues grew 11% at Rs 3,130.47 crore riding on improved demand in rural India.

The country’s fast moving consumer goods sector saw consumption growth improve to 7.5% in the June 2023 quarter, riding on improved rural demand and cooling inflation, market research firm NielsenIQ had said in its quarterly update last month.

The uptick in demand was the highest in the last eight quarters, according to the researcher. It had also flagged that growth in rural markets improved 4% compared to a year ago, while