Dabur India Q2 Results: Higher Demand For Immunity, Hygiene Products Aid Volume
Dabur India Ltd.’s volumes rose in the quarter ended September, aided by higher demand for its immunity boosters and hygiene products as people turned health conscious amid fears of contracting the coronavirus.
The maker of Vatika hair oil saw its year-on-year growth in volumes for domestic fast-moving consumer business at 16.8% in the July-September period, according to an exchange filing.
During the quarter, the ayurveda products maker witnessed a 70.8% growth in health supplements, led by a twofold jump in Chyawanprash sales. Its honey sales, too, rose in double digits, the company said in an investor presentation.
While the company’s Pudin Hara portfolio, herbal pills for digestion, witnessed double-digit growth, sales of Hajmola digestive tablets were impacted.
Dabur India Q2 Results: Other Highlights (year-on-year)
- Net profit increased 20% to Rs 482.86 crore
- Consolidated revenue rose 14% to Rs 2,516.04 crore
- Ebitda rose 16% to Rs 569.43 crore
- Margin stood at 22.6% against 22.1% a year ago
“While Covid-19 continues to impact people around the world, Dabur India’s strategic business transformation exercise to develop and implement aggressive growth strategies in the core business areas and successfully address the emerging challenges helped us deliver a healthy top line growth accompanied by an expansion in margin,” Mohit Malhotra, chief executive officer at Dabur India, was quoted as saying in the company’s earnings release accompanying the filing.
India’s consumer goods makers were battling the worst slowdown in more than a decade before the pandemic struck. Despite being classified as essential services, FMCG companies faced supply chain and labour issues as the lockdown forced workers to migrate back to hinterlands. Demand improved after the nation—fighting a rare recession—restarted most activities to boost sentiment and growth. That’s even indicated by peers Hindustan Unilever Ltd., Marico Ltd. and Colgate Palmolive (India) Ltd., while a complete recovery may be still some time away.
Dabur’s e-commerce business grew more than threefold during the quarter. Its contribution to the company’s overall revenue rose to 6% from 2.1% a year earlier.
Dabur’s over-the-counter business was up 56.1%, led by growth in Lal Tail, an ayurvedic baby oil; and Shilajit, an ayurvedic supplement for men. Its oral care business also rose 24.2% over a year earlier. The company’s hair oil business, however, was down 6.3%, hurt by lower sales at Canteen Stores Department, the company said in its presentation.
“As Dabur continued to move forward on its distribution expansion strategy in the hinterland, rural demand grew ahead of urban,” Malhotra said. “Favourable monsoon and enhanced stimulus announced by the government as part of its overall thrust on boosting rural economy is expected to further drive rural demand in the coming months,” he said.
Meanwhile, the company has declared an interim dividend of Rs. 1.75 apiece for the ongoing financial year.
Shares of Dabur India shares closed 2.3% higher after the quarterly results were announced, compared with a 1.2% gain in the Nifty 50.