Dabur India posted flat growth in consolidated net profit to Rs 440 crores for the quarter ended June 30, as the company’s effective tax rate for business decreased from 22.8% to 21.9%. Still, raw material inflation continued to raise costs and impacted margins.
Revenue from operations increased 8.1% y-o-y to 2,822 crores, with underlying volume growth of 5% in the India FMCG business. The June quarter revenue growth, which stands at 10.3% on a constant currency basis, comes on a high base of 32% in the same quarter last year. Ebitda (earnings before interest, tax, depreciation and amortisation) fell 1.4% y-o-y to544 crore, while the operating margins fell 180 basis points y-o-y to 19.3%. An investor presentation said that prices increased by around 5%, and cost savings partially mitigated unprecedented inflation.
“The demand environment remained stressed in view of the heavy inflation, which saw consumers switch to more affordable smaller packs of branded consumer goods,” said Mohit Malhotra, chief executive officer, Dabur India. Rural and urban demand growth was at par for Dabur.
The company said its rural demand was driven by the ahead-of-the-curve investments in expanding its rural footprint to over 91,500 villages in the June quarter, up from 89,800 villages in March. The urban growth was driven by new-age channels like modern trade, which grew by 42% during the quarter. New launches contributed to 4.4% of sales, and Dabur’s International business reported an 8% jump in constant currency terms, led by strong growths in Turkey, sub-Saharan Africa, Nepal and Egypt.
Source: Financial Express