Dabur feels heat of Nepal unrest

The stock price of consumer goods major Dabur India fell for the second straight day on the BSE, in the wake of continuing unrest in Nepal.

Dabur had said on Thursday juice sales for the December quarter could be hit as much as 10-15 per cent on account of the political turmoil in Nepal.

Dabur's stock price fell 1.75 per cent over the previous day's close (Rs 282.90) following Thursday's announcement. The stock fell 2.05 per cent at the close of trade, touching Rs 272.25 per unit, on Friday.

Dabur, according to sector analysts, produces 40 per cent of its fruit juice products in Nepal under the 'Real' brand name. While some portion is routed to the market in Nepal, a significant part of it makes its way to India for consumption here.

The admission by Dabur came amid widespread speculation that the company would find it difficult to restore supplies in the wake of the civil unrest there. There is a stand-off between the Madhesis and the Nepal government, resulting in the Indo-Nepal border being closed for some time now.

Dabur said it had lost some part of its juice sales in October and November, 2015 and had estimated that juice sales during the December quarter of FY15-16 would be impacted. "This is a one-time issue beyond our control and will have a near-term impact on Q3 FY15-16 performance," Dabur said in a statement to the stock exchanges.

Dabur had first indicated of a possible sales impact last month, saying its 'Real' brand fruit juices in India would be impacted due to a blockade of certain Indo-Nepal border crossings.

"Due to the current state of unrest in Nepal, and the resultant blockade of certain border crossings, the supply of products by our subsidiary Dabur Nepal Pvt Ltd has been affected. This may temporarily impact the sales of our Real brand fruit juices in India," Dabur had said in an October 19 stock filing.

Besides Nepal, Dabur manufactures Real juices at its plants in India and Sri Lanka. It said on Friday it had ramped up production at its facilities in India and Sri Lanka to plug gaps in supply. "We have also engaged with third parties to cater to our demand requirement for the month of December and going forward," the company said.

Dabur had reported a muted 2.4 per cent growth in foods for the September quarter on account of the supply crisis in juices. While the firm does not give a break-up of the contribution of juices within its foods portfolio, it is said to be a big driver of sales within the category. Real, for the record, has a 62 per cent share in the Rs 1,500-crore fruit juices market in India.