Dabur's hair care revenue share slides

Dabur, however, claims its market shares in both hair oils and in the perfumed oil-based categories have remained stable

Blame it on the changing behaviour of the urban Indian. Revenue from hair care, single largest revenue contributor to Dabur India, has dropped a few percentage points to the overall pie in the past four years.

While hair care had a share of 31.4 per cent of overall revenue in the year ended March 2010, and 30 per cent in March 2013, it dropped to 28 per cent at the end of March 2014.

The company reported revenue growth at 16-17 per cent annually during these years. It has seen health supplements and digestives contributing more than earlier. The former’s rose one percentage point to 22 per cent of total revenue; digestives rose similarly to eight per cent at the end of March 2014.

Hair care is still the highest revenue contributor to Dabur, followed by health supplements, and then oral care products — 17 per cent.

“Yes, the hair oil industry is witnessing a slight slide. There is a marginal shift in user habits, particularly in urban India, which has resulted in the overall hair oil industry showing signs of a slowdown,” said Devendra Garg, senior executive director, consumer care. The company, however,claims its market shares in both hair oils and in the perfumed oil-based categories have remained stable.

The reason why the share of hair care is coming down could be that food-related businesses of Dabur are growing at a faster rate, said an analyst with an equity brokerage firm. “Foods, oral care and health supplements have grown faster than hair care as a category during 2013-14. As a result, there is the change of revenue share. It is unlikely that hair care would come back with a better revenue share in the coming years. Rather, its share might drop further,” said the analyst. Not wanting to be named, the analyst also hinted that the company might look at shifting the focus, since hair care offer lesser margin than other growing categories.

Garg, however, believes improved rural affluence would result in a shift, with consumers moving from unbranded  to branded hair oils. “We see this as an opportunity to further grow the hair care business,” he said.

While the contribution of hair care to the pie has dropped, the business, said Garg, had grown for Dabur at a rate better than the slowing industry. “The fact remains that the size of the pie itself has increased, showing that all categories have reported strong growth,” he added.

Dabur also noted the company has not shifted focus from the hair care category, which had crossed the Rs 1,000-crore mark in 2012-13.