Normal monsoon to drive Dabur India's growth, says CEO Mohit Malhotra

Company to undertake price increases as consumers come back into consumption fold

Home-grown fast-moving consumer goods (FMCG) major Dabur India aims to achieve mid-high single-digit growth in consolidated business in FY25, driven largely by normal monsoons and a rural-focused Budget. The company said this during its annual general meeting on Thursday.

“We are targeting mid to high single-digit growth for the consolidated business, and aiming to grow faster in most of the categories where we are present, thereby gaining market share,” Dabur Chief Executive Officer (CEO) Mohit Malhotra told shareholders.

According to Malhotra, factors like a normal monsoon and increased outlay for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) will help drive this growth.

“Now, with normal monsoon and volume growth, we will see a gradual uptick of business. Recent measures like increased allocation towards MGNREGA, increase in tax exemptions in the recent Budget, and its focus on rural, women, poor and agricultural activities should really stimulate demand and volume growth,” he added.

The company also aims to expand its margins this financial year through its cost-saving project as well as by raising product prices.

“We will expand our margins through Project Samriddhi and target savings of Rs 100 crore in the current year. Some of this will be reinvested in advertising, while some will flow into the margins. We also expect some sort of margin increases by way of price increases and some cost savings,” Malhotra told shareholders.

According to the company’s 2024 annual report, Project Samriddhi helped the maker of Hajmola candy and Real fruit juice capture savings of about Rs 89 crore.

Speaking about the ongoing political turmoil in Bangladesh, Malhotra said, “All our people are safe. Bangladesh accounts for under 1 per cent of our consolidated revenue and under 0.5 per cent of our profits. Our factory and stockists are operational now after being shut for about a week. We are monitoring the situation closely and we will make all efforts to resume normalcy in operations.”

In July, the business grew by mid-single digit, but the company anticipates a week’s worth of sale loss in August.

Malhotra said the company will continue its focus on innovation to help expand its total addressable market and bring the younger cohort of consumers into the folds of consumption. The company expanded its Real juices and nectars brand into fruit drinks and fizzes, red toothpaste into red gel, and Odomos into liquid vaporisers, among others.

“With all these initiatives, we aim to extend the life cycle of our core brands. Dabur is only reaching out to 3 per cent of the total FMCG market and there is huge room for growth. Innovation is the core of our strategy, and will continue to drive our growth and expansion in both India and overseas,” he said.

The company has increased its advertisement and media spends by 33 per cent in FY24.