The FMCG major believes increasing rural demand and the fiscal stimulus will drive growth. (Prashanth Vishwanathan/Bloomberg News)

Dabur Plans To Focus On Gaining Market Share Over Margins In Short Term

Fast moving consumer goods major Dabur India Ltd. may have to take a hit on its operating profit margins in the short term as it plans to gain market share, amid the industry facing inflationary pressure.

“Our preference is going to be to gain the market share,” Lalit Malik, chief financial officer of Dabur India, told BloombergQuint in an interaction. “In the short-term, there would be a margin sacrifice.”

Our strategy would be to reach out to a large population by strengthening our distribution network and come out with new product launches.
Lalit Malik, CFO, Dabur India

However, the company’s focus will be sustainable profit growth in the long run. “There is certainly pressure on our operating margins in terms of inflation aspect and exchange (rates),” he said. The depreciating rupee could affect the company’s margin as its international business accounts for 28 percent of revenue, according to a Deutsche Bank Research report.

The company plans to tackle it through effective cost synergies and may resort to increasing the prices in select categories to the extent of inflation, Malik said.

Watch the full interview here:

Also read: Analysts Positive On Dabur, Buoyed By Growth In Rural Demand