Home >Companies >Company Results >Dabur India net profit slumps 24% in Q4; Chyawanprash sales surge

New Delhi: Packaged consumer goods firm Dabur India on Wednesday reported a 24% year-on-year decline in its fourth quarter (Q4) net profit to 281 crore as the covid-19 crisis hit business at the maker of Real juices and Vatika hair oil. The company had posted a net profit of 370 crore in the year-ago period.

For the quarter ended 31 March, consolidated revenue from operations stood at 1,865.36 crore, down 12.3% from the 2,128.19 reported by the fast moving consumer goods (FMCG) company in the year-ago period.

“Dabur opened the fourth quarter on a positive note, successfully tapping the growth opportunities. However, the COVID outbreak in March, followed by the nationwide lockdown, caused severe disruptions in our business and brought sales to a virtual standstill in the second fortnight of March 2020," Dabur India's chief executive officer, Mohit Malhotra, said in a statement.

The company’s seasonal portfolio of products, said Malhotra, were hit as the company lost sales due the the nationwide lockdown in late March. “With most of products across our healthcare, home and personal care and foods portfolio falling in the non-essential category, the pre-season sales of summer skewed products to meet the seasonal demand was severely impacted," he said.

Interestingly, Indian shoppers stocked up on the company’s immunity boosting Chyawanprash apart from buying more of its honey. “We are already witnessing a 400% surge in demand for our flagship immunity booster Dabur Chyawanprash and an 80% growth in Dabur Honey," Malhotra said.

The company has invested in expanding capacity for the two brands after it witnessed a stock-out situation in the market.

Revenue at the company’s food business that comprises Real juices and Hommade cooking products declined 21% for the quarter ended March, while its consumer business reported revenues of 1,590 crore, down from 1,788.56 crore reported in the year-ago period.

Dabur sells oral care brands, apart from skin care, hair oils, shampoos, home care, health supplements, among other household products.

It was among the first few FMCG companies to suspend operations at its manufacturing units before the nationwide lockdown. On 23 March, Dabur halted operations at roughly 60-70% of its manufacturing plants in India. Dabur has 12 manufacturing units in the country.

Going forward, Malhotra said the company will take cues from consumer shift towards immunity building, health, and hygiene products.

Demand patterns have changed significantly, with consumers increasingly seeking Ayurveda-based interventions for boosting immunity, besides products that meet their personal and household hygiene needs, he said. As a result, Dabur has developed a strong pipeline of innovations to address the growing consumer need for preventive healthcare and personal hygiene.

“We have already rolled out a slew of innovations in the Preventive Healthcare space with the launch of immunity boosters like Dabur Tulsi Drops, Dabur Amla Juice, Dabur Giloy-Neem-Tulsi juice and Dabur Immunity Kit, to name a few. In addition, the company has also ventured into the personal & household hygiene space with the launch of hand sanitisers, air sanitisers and disinfectants under the Dabur Santize brand," he said.

Dabur has been scaling its reach into India’s villages as it hopes to cover more ground in the country’s rural markets that account for over 35% of spends for FMCG industry.

“We have already invested ahead of the curve in building a strong rural footprint, which today covers over 52,000 villages. We are investing in enhancing this coverage to around 60,000 villages by the end of this year, which would further strengthen our foundation and help us deliver sustainable profitable growth in the coming quarters," he said.

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