Dabur is yet to revive from the consumer slowdown that has hit major FMCG brands in the previous quarter, however, the company is hopeful that the demand will grow from the current levels, Dabur CFO Lalit Malik told CNBC TV- 18. With the ongoing distress in rural demand, big players including Britannia, ITC, Patanjali, Emami have acknowledged that the prolonged winters and rural distress combined have affected their growth. Dabur and Britannia lamented their inability to reach double-digit growth in the Jan-Mar quarter.
However, the same is expected to reverse soon with the promise of favourable monsoon and structural reforms by the government, several industry experts such as Vinita Bali, former MD, Britannia and veteran analyst Rama Bijapurkar believe. Government has a major role to play in alleviating the crisis and employment creation could be one profound answer to the issue in hand, Lalit Malik had previously told Financial Express Online. He said that jobs will go a long way in speeding up consumer demand and improving overall GDP growth.
Several other steps can also be taken in the direction of rural reforms and agricultural policy. In an interview to CNBC TV-18, Dabur CFO said that there is a need to ensure that the exporters get GST refunds in time. Also, the government can check the food grain wastage by increasing storage. Special focus can be done in the direction of cold-storage, he added.
Further, fiscal incentives should reach rural consumers as well and the government needs to work on that front, Lalit Malik told Financial Express online. “This will improve their purchasing power and boost consumerism, particularly for branded consumer products,” he added.
Dabur, in its quarterly results, had said that the domestic market was temporarily hit by adverse liquidity condition and agrarian crisis. Commenting on the demand slowdown, it said that the prolonged winter impacted its sales. Company’s consolidated revenue for FY19 stood at 10.1% revenue growth, Dabur said in a statement.