FMCG major Dabur to undertake price hikes in toothpaste, fruit juices

Company record net profit of Rs 522 crore, revenue rises 3.1% in Q3

Home-grown Ayurvedic fast-moving consumer goods (FMCG) major Dabur India said on Thursday it will increase prices of products in the oral care and fruit juice categories in the coming few quarters, amid high food inflation and a continued moderation in urban demand.

 

The company’s net profit attributable to the owners for the third quarter rose 1.6 per cent to Rs 522 crore against Rs 514 crore in the year-ago period. It reported a 3.1 per cent year-on-year (Y-o-Y) increase in consolidated revenue to Rs 3,355 crore.

 

The maker of Hajmola candy and Real fruit juice noted that the December quarter was marked by high food inflation and continued moderation in urban demand. The company’s rural demand outpaced urban by 140 basis points. It posted a 2 per cent growth, while the urban demand registered a growth of 0.6 per cent.

 

"We focused on strengthening our competitive edge in the marketplace to gain market share in 95 per cent of our portfolio and enhancing brand superiority to strengthen and consolidate our position in the categories where we operate," Mohit Malhotra, chief executive officer at Dabur India, said in a release. 

 

Price increases will happen in both the toothpaste and fruit juices categories, but will have to be very calibrated increases after observing the competitive intensity in the market, he told investors in a post-results call.

 

“Inflation is picking up in the country. Last two years, the inflation was 3 per cent and we passed on the entire inflation to the consumer. Going forward, we expect it to see a 5 per cent increase. With the currency depreciating, some of the imported fruit concentrates will also become expensive for us,” he added. 

 

The company will also engage consultancy firm McKinsey & Co to help refine and align its strategies as it navigates a volatile geopolitical landscape, fraught with uncertain macroeconomic indicators.

 

“Dabur has decided to revise its strategic Vision cycle from four years to three years to create a more agile organisation that can quickly navigate the challenges and capture the emerging opportunities,” it said in the release.