Dabur net profit down 5.5% as inflation bites
1 min read . Updated: 03 Feb 2023, 12:26 AM IST
PremiumConsolidated net profit for the third quarter stood at ₹476 crore, down from ₹504 crore reported in the year-ago period
NEW DELHI : Packaged consumer goods company Dabur India on Thursday reported a 5.5% dip in December quarter profit amid a difficult cost and operating environment.
Consolidated net profit for the third quarter stood at ₹476 crore, down from ₹504 crore reported in the year-ago period.
The makers of Vatika shampoo and Real fruit juice reported a 3.4% growth in consolidated revenue that touched ₹3,043.2 crore for the three months ended 31 December, 2022.
“We have delivered steady results in what continues to be a difficult cost and operating environment. We continued to adjust prices responsibly to reflect inflation. Our India business reported a growth of 3.3% with a three-year CAGR of 9.5% and steady market share gains across portfolio, despite most operating categories reporting a decline," Mohit Malhotra, chief executive officer, Dabur India Ltd said.
The impact of inflationary pressures was more pronounced in rural markets, resulting in visible down-trading and a consumer shift to more affordable and smaller packs, said Malhotra.
“This led to rural growth lagging urban markets for the second quarter in a row for Dabur. However, we believe that this demand slump in rural has bottomed out as we are now seeing some green shoots of revival in demand in the hinterland. We are hopeful of rural demand reporting a smart recovery on the back of a record farm output and increased government spending," he added.
On Thursday the company also announced the appointment of Philipe Haydon as executive director for its healthcare business. Haydon was previously president and CEO, The Himalaya Drug Company. Healthcare is the company’s second largest vertical, accounting for 39.7% of Dabur’s sales in the December quarter. It comprises products such as chyawanprash, honey, Lal Tail and Honitus.
During the quarter Dabur cut advertisement spending; overhead and employee costs were up marginally by 34 bps and 28 bps, respectively, analysts at ICICI Securities said. “Dabur has seen strong 9% growth on a 3-year CAGR basis attributed to high growth during covid-19 period in healthcare segment. However, health supplement products (chyawanprash and honey) have started clocking lower sales over the last one year with subsiding of covid scare and improved mobility. We believe the company has forayed in multiple new categories in last two years leveraging its existing brands in under-penetrated categories," they added.
