Dabur India Q1 net profit up 25%; revenue increases 13% but volume growth softens

Dabur India Ltd, one of the top domestic fast moving consumer goods (FMCG) companies, reported a 25 per cent increase in net profit on a year-on-year basis to Rs 186 crore for the quarter ended June 30, 2013. This was boosted by double-digit growth in revenues besides higher other income and lower interest costs.

The company's consolidated net sales grew by 13 per cent in the April-June quarter to Rs 1,657 crore, compared with the same period a year ago. While revenues from the domestic FMCG business grew by 13.2 per cent, Dabur’s international business (including acquisitions) ended the first quarter with a 17.5 per cent growth, led by Egypt and Nepal. Overall, the domestic business contributed 68 per cent while the international business contributed 32 per cent to sales of Dabur during the quarter.

The volume growth was pegged at around 9 per cent which is less than a strong 12 per cent growth clocked in Q4 of FY13. The company has been looking to maintain an 8-12 per cent volume growth in the near term.

"Despite signs of an economic downturn and increased competitive intensity in the market, Dabur India has reported strong volume growth in its key categories. Our domestic FMCG business grew at a strong 13.2 per cent, driven by a volume growth of 9 per cent. The business has performed well on all operating parameters. We have managed our business dynamically through a combination of calibrated price increases and a greater focus on cost efficiencies,” said Sunil Duggal, chief executive officer, Dabur India.

The consumer care business, the biggest revenue earner for the firm, grew 14 per cent to Rs 1,343 crore. The foods division grew 18 per cent on a yearly basis to Rs 250 crore. The relatively new retail business, which runs retail stores under the New U brand, grew 27 per cent to Rs 17 crore and also cut down the segment losses.

Category wise, there was 15 per cent growth in perfumed hair oil business. Hair care, which contributes around a third of the consumer care revenues, grew 11.8 per cent with shampoo segment growing 22.8 per cent.

The oral care category also performed well with the toothpaste business reporting a 14 per cent growth. Health supplements, which is the third-largest category within consumer care, grew 7.5 per cent and was affected by the early onset of monsoon, as per the company.

The digestives business (Hajmola and Pudin Hara brands among others) grew by 15 per cent and skin care business reported growth of close to 13 per cent.

In the recent past, Baring Private Equity Partners India picked 1.5 per cent stake in the company through open market operations for an estimated Rs 350 crore.

(Edited by Joby Puthuparampil Johnson)

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