Demonetisation hits Dabur’s net profit and sales in Q3 FY17

The quarter ended December 31, 2016 was marked by a demonetisation-led liquidity squeeze that further impacted the already soft consumer demand across key FMCG categories. This, coupled with the global headwinds in the form of currency fluctuations and rising cost of key inputs, led to Dabur India ending the third quarter of FY17 with consolidated net sales of Rs 1,847.7 crore, as against net sales of Rs 1,967.5 crore for the same period in FY16. 

The consolidated net profit for Q3 FY17 stood at Rs 293.7 crore, as against Rs 317.6 crore a year earlier. 

“The wholesale trade was severely impacted by demonetisation and we had witnessed a massive amount of destocking across the entire trade channel. We were quick to respond to the emerging situation, adjusting our production plans, reducing inventory, tightening credit controls, pruning media spends while increasing consumer promotions and revamping our supply chain to increase focus on the relatively more resilient urban markets, particularly modern trade. We also stepped up direct distribution to tide over the situation. These proactive measures helped us arrest the slide and even report market share gains in key categories,” said Sunil Duggal, CEO, Dabur India. 

Dabur’s packaged Fruit Juices & Beverages brands saw an over 5 per cent gain in market share in Q3 FY17, while mosquito repellent brand Odomos saw its market share grow by over 4 per cent in the mosquito repellent creams & lotions category. Dabur’s Toothpaste portfolio also gained around 0.7 per cent share during the quarter. Its Shampoo and Hair Oil businesses, too, gained share during the quarter. 

Duggal further said, “The overall business environment remained challenging in the third quarter with key geographies witnessing sharp currency devaluations. We are pursuing a prudent growth strategy and have taken steps to efficiently manage the emerging risks and challenges. Going forward, Dabur will continue to focus on brand-building activities and market expansion programmes that will pave the ground for future growth.”