Dabur Q3 Results: Net profit falls 5% YoY to Rs 476 crore, revenue rises 3%

The revenue crossed the Rs 3,000-crore mark for the time in a quarter, the company said. In constant currency terms, the topline grew 5.7% YoY. The international business reported 4% growth in constant currency terms

“We have delivered steady results in what continues to be a difficult cost and operating environment. We continued to adjust prices responsibly to reflect inflation,” CEO Mohit Malhotra was quoted as saying in the press release.

The impact of inflationary pressures was more pronounced in the rural markets. Marked downtrading and shift to more affordable and smaller packs led to rural growth lagging urban markets for the second quarter in a row for the FMCG major.

“However, we believe that this demand slump in rural areas has bottomed out as we are now seeing some green shoots of revival in the hinterland,” Malhotra said.

The company is hopeful of rural demand seeing a smart recovery on the back of a record farm output and increased government spending. Meanwhile, urban growth will be driven by softening of inflation and buoyancy in new-age channels like modern trade and e-commerce, the company said.

Input cost pressure saw consolidated operating profit decline nearly 3% YoY to Rs 610 crore, and operating margin contracted a sharp 130 basis points to 20%.Price increases coupled with cost optimisation partially mitigated the inflation in input prices and adverse product mix thereby restricting the fall in profitability.

Dabur’s homecare business registered strong 18% growth. The Ayurvedic OTC business grew a sharp 17% in Q3, while the digestives category reported 12% growth. The food and beverages business reported 6.4% growth during the quarter, while the toothpaste business ended the quarter with 32% growth, led primarily by the steady demand for the flagship Dabur Red paste.

The company saw market share gains across the portfolio, led by a 250 bps improvement in juices and nectars. Dabur’s market share in hair oils category improved 70 bps to touch the highest-ever 16.2%, and in the shampoo category, it rose by 40 bps.

Similarly, its market share in the ‘chyawanprash’ category improved 30 bps.

On the international front, the Turkey business grew 97%, while the Egypt business was up 35%. The Sub-Saharan Africa business reported 17% growth , while the SAARC market grew 8%.

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