Dabur Q1 profit falls 10% to Rs265 crore
New Delhi: Dabur India Ltd on Friday reported a 9.8% decline in consolidated net profit in the quarter ended 30 June, blaming “massive de-stocking by trade channels” ahead of the 1 July rollout of the goods and services tax (GST),
Net profit in the quarter fell to Rs264.86 crore from Rs293.64 crore in the year-ago period, the New Delhi-based company said. Sales dipped 8.3% to Rs1,790.1 crore from Rs1,952.2 crore.
Dabur’s international business “continued to face severe headwinds” because of currency devaluations and economic turmoil in some of its key overseas markets, the company said.
On a standalone basis, Dabur India’s business suffered more. Standalone net profit in the June quarter declined 14.5% to Rs169.59 crore as sales dropped by 5% to Rs1,233.74 crore.
“The quarter began on a positive note with a strong revival in domestic demand in April and May. Trade sentiments remained cautious in June with massive de-stocking in the run-up to GST implementation. However, consumer demand continued to remain strong, helping us improve our market share across key product categories during the first quarter of 2017-18,” Dabur CEO Sunil Duggal said in a statement.
While overall business suffered, Dabur India managed to expand its toothpaste business by around 10% and home care business by 6%. Its skincare and salon business and the digestives segment grew by around 4% each during the quarter.
Despite the short-term challenges posed by the transition to GST, Dabur’s management has a positive medium- to long-term outlook on hopes that domestic demand will accelerate.
“We have put in place a prudent growth strategy, leveraging Dabur’s herbal heritage and positioning as the ‘Science-based Ayurveda’ specialist, to deliver profitable volume-driven growth in the coming months,” Duggal said.
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