Dabur Blames Cash Crunch For 7% Drop In Third Quarter Profit
Dabur’s Q3 profits in-line with analyst estimates, says revenue hit by note-ban.
Dabur India Ltd. posted a drop of 7.5 percent in net profit for the October-December quarter. Net profit fell to Rs 293.76 crore from Rs 317.58 crore during the same quarter last year, the company said in a stock exchange filing. The figure was in-line with the Bloomberg consensus estimate of Rs 300 crore.
Revenue declined by 6 percent in the quarter to Rs 1,852.91 crore compared to Rs 1,972.03 crore on a year-on-year basis. Currency fluctuations and rising costs of key inputs led to a decline in revenue.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was down 11.6 percent to Rs 333.88 crore compared to Rs 377.81 crore during the third quarter of FY16. EBITDA margin dropped to 18 percent as against 19.2 percent last year.
Demonetisation
In a separate statement, the company added that the Narendra Modi government’s decision to withdraw old Rs 500 and Rs 1,000 currency notes led to ‘massive amount of de-stocking across the entire trade channel.’ However, proactive measures helped the company arrest the slide, the statement added.
The company intends on continuing its brand building activities to pave the way for growth in the future.
The overall business environment remained challenging in the third quarter with key geographies witnessing sharp currency devaluations. We are pursuing a prudent growth strategy and have taken steps to efficiently manage the emerging risks and challenges. Going forward, Dabur will continue to focus on brand-building activities and market expansion programmes that will pave the ground for future growth.Sunil Duggal, CEO, Dabur India
Segmental Performance
- Dabur's fruit juice and beverage segment gained a market share of 5 percent this quarter.
- Mosquito repellent brand Odomos saw a 4 percent growth in market share.
- Toothpaste portfolio gained 0.7 percent while shampoo and Hair Oil business gained as well.
Shares were trading lower by 1.5 percent at Rs 276.