Dabur India Q1 net profit up by 10.3%

New Delhi: Fast moving consumer goods company Dabur India on Friday reported a 10.3% jump in consolidated net profit for the quarter ended June 30, 2019, at ?363 crore, as its operating margins improved during the same period, the company said in a filing to the stock exchange.

Consolidated revenue for the maker of Vatika hair oil, and Babool toothpaste grew 9.1% for the first quarter of FY20, at ?2,273 crore, up from ?2,081 crore the company reported in the year ago period, backed by a stronger distribution expansion in rural India and higher investments in key brands.

The domestic FMCG business for the company reported a volume growth of 9.6% during the quarter.

“While the macroeconomic environment continues to be challenging with an overall demand slowdown in India and competitive intensity remaining high, we have executed well on our distribution expansion strategy in rural India which has resulted in consistent improvement of our performance,” said Mohit Malhotra, chief executive officer at the company. “With this, we have built a strong foundation for sustainable profitable growth. We have efficiently managed the risks and challenges to post an 18.5% growth in our operating margin for the quarter,” he added.

Dabur’s performance across sectors remained stable. The company’s health supplements business registered a 19.6% growth during the quarter, while the digestives category, with brands like Hajmola and PudinHara, registered over 18% growth. The OTC and Ayurvedic ethicals business grew by 14.5%; its hair oil segment grew 12.1% growth. The skin care category grew by over 12%, while the toothpaste business, led by Dabur Red Paste, posted an 11.4% growth during the first quarter.

During the quarter, Dabur’s international business grew by 7.7%.

Dabur’s results come at a time when demand in fast moving consumer goods has been slowing down. In its recently quarterly update, research firm Nielsen lowered its growth forecast for the FMCG sector to 9% to 10%. It said that rural demand was slowing at a faster pace than urban.

For Dabur, rural demand is growing ahead of urban, Malhotra said. The company expanded its rural footprint to over 48,000 villages now, up from 44,000 villages in March 2019.

Additionally, the company also appointed Amit Burman, vice chairman of the company, as chairman; while Mohit Burman has been appointed as vice chairman of the company.

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