Dabur India May Hike Product Prices As Raw Material Costs Rise
Dabur India Ltd. may increase prices of its products on account of rising raw material costs.
“Inflation is inching up, especially in the categories that we play in, like amla and gold (used in Chyawanprash), etc. Going forward, we do expect in our category of products, inflation will be there,” Lalit Malik, chief financial officer at the maker of Vatika hair oil and Red toothpaste, told BloombergQuint over the phone. There may be selective price hikes, which will also depend on the competitive scenario in the segment, he said.
Dabur India had in the July-September quarter increased prices of its immunity booster Chyawanprash.
The company is increasing its advertising and promotion spends to support its various products launched over the last few months as its aims to grow revenue, while maintaining its margin at current levels. It has entered the milkshake category with its Real Frappe, as well as launched a range of health juices under its namesake brand; haldi and tulsi drops and sanitisers in the last six months.
Dabur India reported an operating margin of 22.6% in the quarter ended September. Its advertising and publicity spends during the period rose 40.2% year-on-year at Rs 202.18 crore. Its revenue rose 14% over the year earlier to Rs 2,516.04 crore during the period, and volumes for domestic fast-moving consumer goods business grew 16.8%—aided by higher demand for its immunity boosters and hygiene.
Volumes of its peers Marico Ltd. and Hindustan Unilever Ltd. rose 11% and 1%, respectively, in the quarter ended September.
But while the sentiment in the ongoing quarter is better, festive demand is lower compared to last year, Malik said. “There’s an improvement over the last quarter, sentiments are comparatively better, and the opening up of malls has helped.”