Dabur India rises after decent Q2 results

Dabur India rose 2.11% to Rs 469.45 after consolidated net profit rose 6.91% to Rs 403.64 crore on 4.09% rise in net sales to Rs 2,211.97 crore in Q2 September 2019 over Q2 September 2018.

The result was announced during market hours today, 5 November 2019.

The net profit was impacted by one-time impairment in value of investments to the tune of Rs 40 crore. Excluding this impairment, the net profit for Q2 of 2019-20 marked a 15.1% growth year-on-year. The domestic FMCG business reported an underlying volume growth of 4.8% during the quarter. The domestic FMCG volume growth for the quarter, excluding the foods business, stood at 7.4%.

The company mitigated the impact of macro-economic headwinds and a prolonged slowdown to deliver a 4.09% growth in consolidated revenue and an improvement of 90 bps in operating margin during the second quarter of 2019-20 financial year.

"The domestic business continues to face heavy headwinds in the form of a sustained slowdown in demand, aggravated by the liquidity crunch in the market. Despite a sharp fall in growth rates in most consumer products segments, Dabur continues to focus on brand-building across our key categories while leveraging our strong herbal and Ayurvedic heritage. We also continued to move forward on our distribution expansion strategy in rural India. During the second quarter of 2019-20, we have expanded our rural footprint to over 51,000 villages, up from 48,000 villages in June 2019. Riding on this expansion,Rural demand continues to grow ahead of Urban demand for Dabur," Dabur India chief executive officer Mohit Malhotra said.

"While we continue to face macroeconomic headwinds, Dabur has efficiently managed the risks and challenges to deliver a steady performance. The increased investment behind our brands and in innovation is clearly paying off with Dabur brands growing ahead of the categories and gaining market share, despite the tough operating conditions. Our market share in the Toothpaste category increased by66 basis points year-on-year. Dabur reported a 30 bps gain in market share in the Hair Oil segment, while our Shampoo category market share grew by 65 bps. Despite a sharp 7% decline in the Juice category, Dabur's market share rose to the highest ever 60.5%, an increase of 420 bps year-on-year. Our focus on strengthening our master brands, enhancing our rural reach coupled with our focus on operating efficiencies and judicious cost management will support sustained profitable growth in the future," Malhotra added.

Dabur India is a fast moving consumer goods (FMCG) company. The firm operates in various product categories, such as hair care, oral care, healthcare, skin care, home care and foods.

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