Dabur to drop weak products, targets double-digit growth by FY28

The FMCG firm will phase out underperformers like Vedic Tea and Dabur Vita while investing in core and premium products to fuel long-term growth amid a weak demand climate

Homegrown ayurvedic fast-moving consumer goods (FMCG) company Dabur India has taken a call to discontinue certain low-performing products as part of its plan to register near-double-digit growth in financial year 2025-26 (FY26).

 

“Our ambition is to achieve sustainable double-digit compound annual growth rate (CAGR) by FY28 in both top line and bottom line. This renewed strategy builds on our core strengths while pivoting towards future-ready levers of value creation,” Mohit Malhotra, chief executive officer (CEO) at Dabur India, told investors on a post-earnings call on Wednesday.

 

This strategy of the maker of Hajmola candy and Real fruit juices is anchored on seven pillars, including “rationalisation of underperforming products and SKUs (stock-keeping units)” in order to release capital for bigger bets. “A few examples of these are Vedic Tea, adult and baby diapers, and Dabur Vita (nutritious drink brand),” Malhotra added.

 

 

Other steps include continued investment to add scale to core brands through disproportionate investments thereby increasing penetration and driving market share gains. These include brands like Dabur Red, Real, Dabur Chyawanprash, Hajmola, Dabur Amla, and Odonil.

 

The company will also push the pedal on premiumisation and contemporisation of products across categories. Further, it will be on the lookout for inorganic opportunities, especially in the healthcare wellness space, which can also be extended to foods.

 

Amid a challenging demand environment marked by high food inflation and surge in cost of living, the company recorded an 8.4 per cent fall in net profit to ₹320 crore in the March quarter. The company had recorded a net profit of ₹349.5 crore in the year-ago period. 

 

Its net sales, meanwhile, rose 0.6 per cent to ₹2,830 crore from ₹2,814.6 crore in the year-ago period. For the full year, the company’s net profit dropped 4 per cent to ₹1,767.6 crore while its net sales rose a meagre 1.2 per cent to ₹12,536 crore. Volume growth, however, was flat during the quarter.

 

The company’s foods business reported an over 14 per cent growth during the quarter, while the skin and salon business grew by 8 per cent. The shampoo business, meanwhile, witnessed a 4 per cent jump. The Badshah portfolio recorded around 11 per cent volume growth during the quarter.

 

The company will also be on the lookout for inorganic opportunities, especially in the healthcare wellness space, which can also be extended to foods. .

 

“So wellness-foods, wellness-healthcare is where we should attempt to get a brand in an inorganic way, while personal care should see more organic initiatives,” Malhotra told investors.