(Reuters) -Consumer goods maker Dabur India reported a decline in fourth-quarter profit on Wednesday, hurt by sluggish urban demand, although it expects a recovery in consumption in the coming months.
Demand in India’s urban markets has been under pressure for several quarters, as the high cost of living continues to weigh on spending, despite a moderation in inflation.
The company’s consolidated net profit fell 8.4% year-on-year to 3.2 billion rupees ($37.77 million) in the quarter, but was slightly above analysts’ expectations of 3.14 billion rupees, according to data compiled by LSEG.
Dabur, known for its namesake honey, flagged a “challenging” demand environment in the three months ended March, but added that it expects demand to improve.
“We expect consumer demand in India to recover progressively in the coming quarters, both in urban and rural markets,” CEO Mohit Malhotra said.
Dabur, known for its ‘Real’ fruit juices, gets more than half of its sales from urban markets.
In the fourth quarter, the company’s healthcare segment was affected by a less severe winter. Revenue from the segment, which makes up about 30% of the total, declined 4.7% year-on-year.
Revenue in its largest segment, home and personal care, declined 3.3%.
The company’s consolidated revenue from operations grew less than 1% to 28.30 billion rupees.
Operating profit margin contracted to 15.1% in the fourth quarter from 16.6% last year.
Peers Hindustan Unilever and Nestle India reported weaker fourth-quarter profits as sluggish demand weighed on sales and higher costs crimped margins.
($1 = 84.7230 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru; Editing by Eileen Soreng)
