Dabur reports strong sales growth, margins decline QoQ

Nature-based consumer products maker Dabur India reported 24.6% growth in net profit for the first quarter, riding the trend of rising sales.

However, the company, which faces tough competition from Patanjali Ayurved, reported a dip in profits when compared with the preceding quarter.

The primary reason for the sequential decline was a sharp increase in advertising costs during Apr-Jun quarter. However, being a seasonal business, the first quarter usually sees an increase in promotional expenditure.

The company’s comparable consolidated revenue for grew to Rs 2,081 cr from Rs 1,790 cr a year ago and Rs 2033 cr from the preceding quarter.

Net profit for the first quarter stood at Rs 329.22 crore, down from 397 cr in the preceding quarter, but higher than last year’s 265 cr.

Total expenses rose by Rs 149 cr on a sequential basis to Rs 1,752 cr, and was higher by Rs 219 cr year on year.

Out of the sequential increase of 149 cr in expenses, around Rs 73 cr was contributed by higher advertising costs.

The company said it was “riding on sustained gains across its key business categories and geographies”.

It said there was a growth of 21% during the quarter in domestic volumes, against the 16.3% growth in revenue. On a like-to-like basis, it said, revenue had grown by over 19%.

FMCG business reported its highest-ever volume growth of 21% during the quarter.

“Despite an increase in the level of competitive intensity, our brands reported a robust performance during the quarter,” said Dabur India Ltd Chief Executive Officer Sunil Duggal.

He said the company was able to post double-digit growth across all key categories like Health Supplements, Hair Care, Oral Care, Skin Care, Home Care and Foods.

“We have put in place a prudent growth strategy and continued to invest heavily behind our brands to successfully tap the emerging opportunities.”

The Shampoo business reported growth of over 30%. Sales of honey were up around 42%, driving the Health Supplements category growth to 27.5% in Ql.

The Skin Care category grew by 27.1%, while the foods business, led by strong demand for the packaged juices segment, posted 26% growth during the first quarter.

The Digestives business also grew by nearly 22% during the first quarter of 2018-19, while Dabur’s Home Care and Oral Care businesses reported an over 17% growth.

“We have been witnessing a gradual improvement in consumer demand,”  Duggal added.

“Our focus on brand-building and market expansion coupled with innovation has helped Dabur sustain strong growth in our core categories. Going forward, we will continue to focus on pursuing an aggressive and profitable growth strategy,” he added.

Dabur’s International Business reported a 10.5% growth, in constant currency terms. Sales in GCC markets grew 17%, led by Saudi Arabia which reported a 54% growth during the quarter. The Business in Egypt reported 31% gains.

Leave a Reply

avatar
  Subscribe  
Notify of
(Now you can get topic-based alerts via WhatsApp)