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Marico and Dabur post higher profits on volume growth

Marico and Dabur post higher profits on volume growth
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First Published: Wed, Apr 28 2010. 09 38 PM IST

Positive outlook: Sunil Duggal, Dabur’s chief executive officer. Sanjit Das/Bloomberg
Positive outlook: Sunil Duggal, Dabur’s chief executive officer. Sanjit Das/Bloomberg
Updated: Wed, Apr 28 2010. 09 38 PM IST
Mumbai: Continuing the good run by personal care products companies in the quarter ended March, Marico Ltd and Dabur India Ltd posted higher profits for the period on Wednesday.
Dabur had consolidated net profit of Rs135.28 crore, 29.7% higher from the corresponding period in the previous fiscal, while revenue rose 16% to Rs855.28 crore.
Positive outlook: Sunil Duggal, Dabur’s chief executive officer. Sanjit Das/Bloomberg
The maker of brands such as Real, Hajmola, Vatika and Gulabari, Dabur posted a consolidated net profit of Rs503.53 crore for the financial year ended March 2010, an increase of 28.7% from the previous year. Revenue rose 19.6% to Rs3,390.9 crore.
“We...expect price (hike) contribution to play a slightly larger role for growth at 6% as against 4% this year,” said Sunil Duggal, Dabur’s chief executive officer.
Marico’s performance, however, was below market expectations as its skincare services business Kaya Ltd reported losses of Rs12.25 crore for fiscal 2010.
Kaya also shuttered its weight loss clinic chain Kaya Life posting a one-time loss of Rs5.7 crore for the March quarter. The company said it earned Rs51 crore in consolidated net profit in the March quarter, a year-on-year growth of 15%. Revenue rose 6.76% to Rs607.5 crore in the same period.
The company—which makes hair care oil Parachute and cooking oil Saffola—also posted a consolidated net profit of Rs231.6 crore for fiscal 2010, an increase of 22.73% over the previous fiscal. Annual revenue increased 5.31% to Rs2,046.35 crore.
“In 2011, we will focus on volume growth for the year. Value if it comes then it’s over and above that,” said Chaitanya Deshpande, Marico’s head of corporate finance.
This follows the trend for the entire sector, said Anand Shah, sector analyst with Angel Broking Ltd. “There has been volume-driven growth with very little value growth,” he said, referring to the absence of price increases.
“Gross margin expansions were also at (their) peak and companies have maintained prices and even decreased prices and increased advertising spends to get volume growth,” he said.
Going forward, prices will rise, margins will contract and costs will be rationalized, he said.
Marico’s shares on Wednesday closed at Rs112.25 on the Bombay Stock Exchange, down 0.22%. Dabur closed 1.19% higher at Rs180. The benchmark Sensex closed 1.76% lower at 17,380.08 points.
sapna.a@livemint.com
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First Published: Wed, Apr 28 2010. 09 38 PM IST