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Dabur India Q1 net up, sees margin pressures ahead

Dabur India Q1 net up, sees margin pressures ahead
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First Published: Mon, Jul 27 2009. 06 33 PM IST
Updated: Mon, Jul 27 2009. 06 33 PM IST
New Delhi: Dabur India’s consolidated quarterly profit rose 29.4%, led by higher sales in its consumer care segment, but its chief executive said input costs would rise in the second half of the fiscal year.
Sunil Duggal on Monday forecast a 15-20% rise in sales for the year to March 2010, and said the firm could raise some prices in the second half of the year if costs surged.
“The outlook at least for the near-term, from demand point of view, seems pretty positive.” he said over the telephone.
“Demand remains robust. If there is a little bit of slackening happening in rural levels, it will be made up by urban demand.”
For the first fiscal quarter, Dabur’s profit rose to Rs914 million from Rs706.5 million a year ago. Sales rose 23% to Rs7.43 billion.
The growth was led by higher sales at Dabur’s consumer care division, which makes hair oils, shampoos, toothpaste and food products, and contributes 70% to Dabur’s business.
Dabur’s material costs fell nearly 2% in the quarter from a year-ago period, but Duggal said these benefits could be erased in the second half of the year,
A weak monsoon and improving demand in the economy have led analysts to expect a rise in prices of commodities like edible oils, which Dabur uses for its products.
“There would be some margin pressure on the back of higher raw material costs third quarter onwards.”
On Monday, Dabur shares closed 2.65% higher at Rs133.55 in a Mumbai market that ended flat.
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First Published: Mon, Jul 27 2009. 06 33 PM IST
More Topics: Company results | Dabur | Profits | Sales | Edible oils |