New Delhi: Dabur India on Thursday reported a 0.5% decline in quarterly profit as higher costs hurt margins during the quarter.
Consolidated revenue up 6.4% for the quarter ended March 31 2,677.8 crores, above 2,517.8 crore was reported in the same quarter a year ago. Dabur ended the quarter with a YoY volume case growth of 11%.
During the quarter—The company’s top management noted that the operating environment remained challenging during the quarter. However, there was a green signal at the end of the quarter. Dabur India sells hair oil, packaged juices, shampoo and toothpaste products.
“We have seen some positive growth in the latter part of the fourth quarter. This positive volume growth is mainly driven by the food basket; while Home & Personal Care and OTC categories are registering a decline in volumes. Higher inflation and Rural markets have consistently lagged urban due to downgrading by consumers. The silver lining for the year has been the performance of new age channels and the emergence of rural markets at the end of the quarter, said Mohit Malhotra, Dabur India Ltd. There are some green shoots indicating early signs of revival in demand, the chief executive officer said during the company’s earnings call on Thursday.
EBITDA declined 9.6% year-on-year during the quarter; Gross margin contracted 163bps year-on-year but improved 30bps sequentially to 45.8%. Total expenses increased 12.1% during the quarter.
Food segment revenue grew 44.8% during the quarter. The company’s Healthcare business revenue registered a growth of 0.63% during the quarter. The vertical includes brands like Dabur Chyawanprash and Shahad etc.
Amnish Agarwal, head of research at Prabhudas Lilladher Pvt Ltd, said Dabur continues to navigate a tough inflationary environment, while also gaining market share across key categories. Gross margin remains under pressure, down 271bps from 45.8% year-on-year. “We expect inflationary pressure to continue in the near term, which will delay margin recovery,” Agarwal said.
Malhotra said the company faced high inflation during the year, which was partly mitigated by a price hike of 6%. “Consumer promotions were offered to offset the impact of price increases on consumption, resulting in increased price-weighted volumes for both the fourth quarter and the year. This 11% case growth has helped us increase our brands penetration and market share across categories in line with our ‘Ghar Ghar Dabur’ strategy.”
Meanwhile, commenting on the food and beverages segment of the company, Malhotra said that the company aims to double the business in the next five to six years. “I think the food and beverage portfolio is roughly in the range of 1,700 crore should easily double in the next five to six years’ time. I think the 18-19 per cent growth has gone nowhere. so we’re looking around 4,000 onwards 5,000 crore over the next five years for our food and beverage vertical, which is today 1,700 crore,” he said during the company’s earnings call.
During the year the company acquired majority stake in Badshah Masala. 587.52 crores. To be sure, the company also sells food items under its Homemade brand.
Dabur declares final dividend 2.70 per equity share having a face value of Rs. 1 each (i.e., 270%) for FY 2022-23. The company ended FY2022-23 with a consolidated revenue of Rs. 11,529.9 crore, up 5.9% from Rs. 10,888.7 crore in the last financial year. Net profit for the full year stood at 1,707.1 crores.
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