Dabur India posted a flat year-on-year growth in consolidated net profit to Rs 440 crore for the quarter ended June 30, as the company’s effective tax rate for consolidated business decreased from 22.8% to 21.9%, but raw material inflation continued to raise costs and impacted margins.
Consolidated revenue from operations increased 8.1% y-o-y to 2,822 crore with an underlying volume growth of 5% in the India FMCG business. The June quarter revenue growth, which stands at 10.3% on 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%. Price increases of around 5% coupled with cost savings partially mitigated unprecedented inflation, it said in an investor presentation.
Dwindling consumer sentiments in the face of significant and increasing inflationary headwinds continued to remain a concern. “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 were at par for Dabur.
The company said its rural demand was driven by the ahead-of-the-curve investments in expanding 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.
Dabur reported mid to high double-digit revenue growths across categories. Foods & beverages business reported a strong growth, led by 51% jump in the beverages business. The foods business also reported 36% growth during the quarter. The home care business was up 52%, while the skin & salon business reported a 11.4% rise during the quarter. The oral care business ended the quarter with a 12.5% growth. Sustained demand for Hajmola and PudinHara helped the digestives business end the quarter up 31%.
Dabur reported market share gains across 98% of its portfolio. In juices and nectars, Dabur grew ahead of the category and improved its market share by 330 basis points. Dabur also reported a 240 basis points gain in Chyawanprash market share and a 190 basis points gain in honey market share during the quarter. Hair oil market share reported 30 basis points gain in recording the highest-ever volume share in the category at 15.4%. Dabur’s shampoo market share reported a 50 basis points gain while its share of the mosquito repellent cream category grew by 260 basis points.