Dabur India Q1 FY20 net up 10.3% on back of expansion in rural footprint

Dabur India Ltd has reported consolidated revenues of Rs 2,273 crore for the first quarter ended June 30, 2019, up from Rs 2,081 crore a year ago. Consolidated net profit for the first quarter marked a 10.3 per cent growth to Rs 363 crore, up from Rs 329 crore in the same quarter last year. 

A robust distribution expansion strategy in rural India, coupled with higher investments behind its Power Brands and a revamp of the Supply Chain infrastructure helped Dabur India mitigate the impact of macro-economic headwinds to post a 9.3 per cent jump in consolidated revenue for Q1 FY2019-20. 

Dabur’s standalone India revenue for the quarter grew by 10.5 per cent at Rs 1,628 crore in Q1 of FY2019-20, while standalone net profit was up 11.8 per cent at Rs 258 crore. The domestic FMCG business reported a volume growth of 9.6 per cent 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. Our rural footprint has been expanded to over 48,000 villages now, up from 44,000 villages in March 2019. For Dabur, rural demand is growing ahead of urban. 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 per cent growth in our operating margin for the quarter,” informed Mohit Malhotra, CEO, Dabur India. 

Despite tough operating conditions and high competitive pressures, Dabur brands reported a robust performance during the quarter, growing ahead of the market, delivering strong double-digit growth and gaining market share across key categories like Health Supplements, Hair Care, Oral Care and Foods. “Our increased focus on the Consumer Health space and disproportionately higher investments behind our Power Brands have started paying dividend. We will continue to invest behind our brands, accelerate on product innovation efforts, and enhance our capabilities for sustainable future growth,” Malhotra added. 

Category Growths 

The Health Supplements business for Dabur ended Q1 with a 19.6 per cent growth. The Digestives category, led by Hajmola and Pudin Hara, ended the quarter with an 18.2 per cent growth. The OTC and Ayurvedic Ethicals business grew by 14.5 per cent during Q1. While the Hair Oil business, led by strong demand for Dabur Amla Hair Oil, reported a 12.1 per cent growth, the Shampoo category grew by around 11 per cent. The Skin Care category grew by over 12 per cent, while the Toothpaste business, led by strong demand for Dabur Red Paste, posted an 11.4 per cent growth during the first quarter. The Home Care business grew by nearly 11 per cent during the first quarter of 2018-19. 

During the quarter, Dabur’s International Business reported a 7.7 per cent growth, in constant currency terms, led by Turkey, which grew 40.7 per cent.