Home >Companies >Company Results >Dabur India Ltd Q1 profit down 6%

Packaged consumer goods company Dabur India on Thursday reported a 6% decline in June quarter consolidated net profit at 341.30 crore down from 363.81 crore a year earlier.

The maker of Real Juices and Vatika hair oil reported 12.9% drop in consolidated revenue from operations at 1,979.98 crore down from 2,273.29 crore its reported a year ago.

The company’s domestic FMCG business saw a decline of 6.9% due to the lockdown in April in the first quarter of FY21. While domestic volumes declined by 9.7%, the company said.

Revenues in its international business declined by 21.6%, the company said in an investor communication.

Covid-19 induced lockdowns and subsequent disruptions in trade channels impacted business across several segments the company operates in.

This was especially true for its home and personal care category as shoppers went easy on discretionary purchases such as shampoos and hair oils in the June quarter. Its food portfolio—beverages under Real Juices and culinary brands was impacted too.

The company’s home and personal care business was down 15% year-on-year during the quarter; while the foods business was down 34.4% year-on-year to 203 crore during the first quarter.

However, its healthcare segment, that contributes 37.6% to the company’s sales, benefited with consumer pivot to local remedies and immunity building products.

Healthcare segment was up 29.2% at 532 crore during the quarter. Under the segment, the healthcare supplements business was up 52.6% led by growth in its Chyawanprash brand—that was up 700% during the quarter and honey. Dabur Chyawanprash saw a 700 bps increase in market share, while Dabur Honey gained 300 bps share in the market.

The company ramped up new launches during the quarter that contributed 100 crore in sales during the quarter, largely led by the sale of its sanitizer.

"We are trying to mitigate headwinds by tapping into newer categories," Mohit Malhotra, Dabur India Limited Chief Executive Officer said in the company's earnings call on Thursday.

These included a Dabur sanitizer, Dabur veggie wash, Dazzl surface cleaner, Dabur Sanitize disinfectant spray, Dabur Tulsi Drops among others.

The company is also looking at cost optimization initiatives across the business which will help it manage profitability, he said.

Dabur has ramped up capacity with production now at near-normal levels.

“We were growing at a steady pace when the COVID pandemic brought business to a standstill. Amidst this challenging business environment, we quickly revamped our portfolio to meet the growing consumer need for quality preventive healthcare, personal hygiene and household hygiene products, while alongside enhancing production of our existing Ayurvedic Immunity boosters like Dabur Chyawanprash and Dabur Honey," Malhotra said.

Post covid new trends won’t disappear, Malhotra said referring to the company’s immunity-products launches.

The company has also opened up new channels such as pharmacies and grocery channels for its OTC range.

However, he does expect demand for products like sanitizers slow down gradually.

"Hygiene as a habit will be engrained and will sustain over a longer period, though not to the extent we are seeing now, it will mute but it will sustain as a habit," he told analysts.

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