An employee pushes shopping carts at a Big Bazaar hypermarket, operated by Future Retail Ltd., in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

Dabur Sees Steady Growth From Second Quarter

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Dabur India Ltd. sees steady growth momentum from the second quarter of this financial year, with plans to remain focused on its healthcare business which is likely to continue witnessing strong growth.

The fast moving consumer goods major’s volumes in the domestic packaged business grew 7.7 percent during January-March, with key areas like health care and oral care demonstrating robust growth, Lalit Malik, chief financial officer of Dabur India, told BloombergQuint in a post-earnings interaction.

Dabur’s net profit rose 19 percent to Rs 396 crore in the March-ended quarter, compared to Rs 333 crore in the year-ago period. This was above Bloomberg consensus estimate of Rs 375 crore. The growth was despite a high base in the same quarter last year, he added.

Q4 Earnings Highlights

  • Consolidated revenue up 6.2 percent (YoY) at Rs 2,033 crore; above Bloomberg estimate of Rs 2,052 crore.
  • Consolidated earnings before interest, tax, depreciation and amortisation up 16.2 percent (YoY) at Rs 485.1 crore, above Bloomberg estimate of Rs 456 crore.
  • Consolidated EBITDA margin at 23.9 percent from 21.8 percent in the year-ago period.

FY19 Outlook

The company expects to see steady growth from the September quarter onwards, as numbers before that would not be comparable due to Goods and Services Tax rollout in July last year.

We expect steady growth from the second quarter onwards as the first quarter will not be comparable due to GST, keeping in the mind the factors of good monsoon and benefits of fiscal measures reaching the people.
Lalit Malik, CFO, Dabur India

The FMCG company has seen better traction coming from the rural market, as compared to urban demand, and this trend will continue going ahead, he said, adding that rural growth is likely to exceed urban demand growth by 200 basis points.

Watch the full interaction here:

Other highlights from the interview:

  • Media spends to increase to improve visibility.
  • High crude prices, weak rupee putting pressure on input costs.
  • Seeing inflation pressure in coconut oil, amla.
  • Inflation impact may be offset due to good monsoon prospect.
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