Dabur profit up on back of lower material prices

Better numbers due to falling input costs; firm's net sale up 9% to Rs 2,092 cr

Fast-moving consumer goods major Dabur India’s net profit has increased by 18.2 per cent during the July-September quarter of this financial year to Rs 341 crore from Rs 289 crore in the same quarter the previous year, due to declining raw material prices. During the quarter, Dabur’s net sales increased by 8.7 per cent to Rs 2,092 crore from Rs 1,924 crore on a year-on-year basis.

While, the company’s domestic business grew by some five per cent by volume, a two percentage point drop in its material costs helped its bottomline outpace its revenue growth. As a result, its  net profit margin rose by 1.4 percentage points to 16.3 per cent from 14.9 per cent in the year-ago period. Its international business, which contributes one-third of its sales, grew by 8.8 per cent during the quarter.

“In a challenging business environment where growth rates in most consumer products segments remained under pressure, Dabur remains committed to delivering profitable growth. Even in these uncertain times, we have continued to report good growth across key categories and grow ahead of the market. We continue to invest behind our brands and are confident of our ability to report sustainable and profitable growth,” said Chief Executive Officer Sunil Duggal. The firm’s leading revenue contributor — hair care business, which accounts for some 23 per cent of its sales — grew by 9.3 per cent due to double-digit volume growth of its hair oil products.

However, Dabur’s food business, which accounts for 18 percent of its sales, registered 2.3 percent growth. “REAL fruit juices posted single-digit growth in Q2FY16 on account of shifting of the festive season to Q3 in FY16 vs Q2 in FY15 and supply disruptions from Nepal due to political disturbances”, Dabur India told its investors. Its Oral care and Health care division, which contribute 16 percent of its revenue, grew by 19 and nine per cent during the quarter, respectively.