Dabur India posted a consolidated net profit of ₹515.1 crore in the second quarter ended September 30, up 5.1 per cent against ₹490.1 crore in the year-ago period.. Consolidated revenue from operations grew 7.3 per cent to ₹3,203.8 crore. This growth was driven by “steady performance” of home and personal care, and Health Care businesses. The company said India FMCG business witnessed a volume growth of 3 per cent.
“Continuing with our payout policy, the Board has declared an interim dividend of ₹2.75 per share, aggregating to a total payout of ₹487.31 crore,” Dabur India Ltd, Chairman, Mohit Burman, said in a statement.
Dabur’s International business posted a growth of 23.6 per cent in constant currency terms in the second quarter.
Rural consumption hit
Speaking at an earnings call, Mohit Malhotra, CEO, Dabur India, said that uneven rainfall impacted rural consumption in the second quarter. “We expect rural consumption to gain traction slowly but surely. This will be supported by factors including increase in MSPs by the government, sustained infrastructure investments, robust crop sowing and onset of the festival season among others. But that said rural consumption is lagging urban consumption.” He added that new-age channels such as modern trade and e-commerce are growing at a faster clip than general trade.
Malhotra pointed out that in terms of rural consumption, the company has observed that the southern region seems to be most impacted. “With the winter season coming up, we expect North to pick in terms of rural consumption. UP, Bihar, Madhay Pradesh and the central region should trend better compared to South India,” he added.
Beverage portfolio
The company said that the beverage portfolio was impacted by the uneven distribution of rainfall in North region and shift in festival season, but foods business posted a growth of 40 per cent in Q2. Badshah spices portfolio grew 16.4 per cent in the quarter. Malhotra said the company remains committed to exiting this year with revenues of ₹500 crore from the foods and Badshah portfolio.
Dabur’s digestive business grew 18.1 per cent, while the Home Care business reported a 15.1 per cent growth in Q2. The Ayurvedic OTC and Ethicals business grew 8.1 per cent. “Our flagship toothpaste franchise Dabur Red ended the quarter with a high single-digit growth with continued market share gains,” it added.
Recent litigations
The company recently disclosed that three of its international subsidiaries including Namaste Labs are among the companies that are facing multiple lawsuits in the US and Canada for the hair relaxer products.
On the earnings call, the company’s management said that this litigation does not concern any of the Dabur brands or products. The company added that the litigation is against the “entire hair relaxer industry players”, where it has been alleged that the use of these products leads to harmful effects. “Namaste disputes the same and stands for the safety of its products. The portfolio in question is less than 1 per cent of our consolidated revenue and we have a product liability insurance in place. The matter is sub-judice,” the company’s management added.