Dabur India Ltd. expects volumes to bounce back to normal by the end of September as the impact of supply-chain disruption caused by Goods and Services Tax wanes.
Volumes of the maker of Dabur Honey and Real juices fell 4.4 percent in the three months ended June as distributors pared inventory ahead of the new nationwide tax rollout. The company’s operating margins contracted 50 basis points to 17.3 percent in the three months ended June over the year-ago period.
Pressure on margins will continue in the second quarter ended September as well, Lalit Malik, chief financial officer, Dabur India, told BloombergQuint over the phone. They will stabilise from the third quarter onward.
Dabur India will increase its advertising spends over the rest of the financial year as the company will increase the pace of product launches in the second half.
We have a pipeline of new products. We will keep coming out with new products from time to time, depending upon the readiness of the market to accept the product.Lalit Malik, Chief Financial Officer, Dabur India
In April-June, the consumer goods major’s advertising spends declined 24 percent to Rs 119 crore.
As commodity costs rise, Dabur will increase prices of certain products in the second half of the financial year, said Malik. The company will take a call after gauging prevailing market conditions, he said.
Dabur said it’s the market leader in honey and has stemmed the decline and is again gaining share. It’s back at 45-50 percent, he said.