Dabur improves Q4 profit on cost cuts

Dabur improves Q4 profit on cost cuts
Comment E-mail Print Share
First Published: Wed, May 09 2007. 12 31 AM IST
Updated: Wed, May 09 2007. 12 31 AM IST
New Delhi: Dabur India Ltd, a maker of toothpaste and health supplements, said net profit rose about 54% for the quarter ended March as it did not have a one-time provision it took in the previous year and saved costs by making more products at its own factories.
Its net profit grew to Rs76.91 crore in the fourth quarter from Rs49.96 crore in the year- ago period. The company’s sales increased by 20.11% during the period to Rs576.49 crore from Rs479.93 crore a year ago.
“We are seeing the benefits of in-house manufacturing,” said Rajan Varma, chief financial officer of Dabur. “Earlier we outsourced our manufacturing. Now we have manufacturing facilities in Uttaranchal, Jammu and Kashmir and Baddi. We have also reduced our staff cost and improved our sales.”
Varma, however, declined to provide an outlook for the current year.
Last year, Dabur took provisions of Rs12 crore at Dabon International Pvt. Ltd, a joint venture which made milk products such as cheese. It took a provisions for its investment in the venture which has been loss-making since its inception five years ago.
It has since exited the venture, by selling its 35% stake in the venture which it started with France’s Bongrain SA.
Dabur also reduced its headcount during the fiscal 2007, Varma said. He, however, did not give the exact figures.
Dabur India had 3,500 people on its rolls by the end of the quarter ending 31 March 2007.
“The only concern is raw material cost,’’ said Abhijeet Kundu, an analyst at Prabhudas Leeladhar Pvt. Ltd. “The raw material cost has gone up by 200 basis points this quarter (ended March) over the previous quarter.’’
He said while the company has increased the selling price for its goods, the increase in price hasn’t kept pace with the rise in raw material costs. India is battling inflation, which is almost at a two-year high.
For the financial year ended March, net profit increased by 32.2% to Rs283.04 crore as against Rs214.18 crore in the previous fiscal. Sales for the full year stood at Rs2,233.72 crore, a jump of 17.6% over Rs1,899.57 in fiscal 2006.
Dabur shares fell Rs1.75 to close at Rs 94.70 on the Bombay Stock Exchange. The shares are trading well off their 52-week high of Rs176.30 set on 19 January.
Comment E-mail Print Share
First Published: Wed, May 09 2007. 12 31 AM IST