Fast Moving Consumer Goods (FMCG) major Dabur India is concerned about its sale volumes amid lack of clarity over Goods and Services Tax (GST) rules. Uncertainty over GST may affect its sales this year, Dabur India told CNBC-TV18, adding that the ‘lingering effect of demonetization still continues’ and the ‘pain in international business may last for next two quarters’.
Yesterday, Dabur India reported a marginal growth in its consolidated net profit for the fiscal fourth quarter 2016-17. The company registered a net consolidated profit of Rs 333.11 in Q4FY17, up 0.49% from Rs 331.48 crore reported for the corresponding quarter last year. However, this consolidated net profit was up 13.39% from Rs 293.76 crore recorded in the last quarter.
“The business faced a tough economic environment characterized by extreme volatility in currency, particularly in Egypt and North African markets, as well as crude-led economic turmoil in Saudi Arabia. In the constant currency terms, consolidated net sales remained flat for the fourth quarter. Demand growth, still reeling under the impact of demonetisation, remained slow at the beginning of the quarter,” Sunil Duggal Chief Executive Officer of Dabur India had said after the Q4FY17 results.
Dabur India’s consolidated total income for Q4FY17 stood at Rs 1,979.72 crore, which was down by 4.08% on-year basis but up 2.25% on-quarter basis. Profit before tax stood at Rs 431.41 crore, up 2.69 per cent against Rs 420.10 crore in the same period last year.
For the entire financial year 2016-17 (FY17), consolidated net profit rose 2.06% on-year growth to Rs 1,276.94 crore. However, total income declined 1.06% on-year to Rs 7,999.79 crore. On the standalone front, net profit was at Rs 302.23 crore growing by 5.25% on-year, while total income stood at Rs 1,494.84 crore, up 0.93%.
On segment wise revenue break-up, consolidated consumer business saw 6.78% decline at Rs 1,550.84 crore in Q4FY17. Meanwhile, food business contributed growth of 8.18% to Rs 298.01 crore and retail business was at Rs 30.76 crore up by 3.15%.
Dabur India expects double digit growth in revenue in current fiscal year due to a double digit growth in rural Markets in the event of a good monsoon. The company also expects its product prices to increase by two to five per cent in this fiscal.
Dabur India estimates its sales volumes to grow by five to ten per cent in this fiscal and expects to see its profits recover in second half of the current fiscal. The company also plans to increase its product launches in the second half of fiscal year 2017-18.