Fast moving consumer goods major Dabur India’s net profit inched up by 0.5 per cent to Rs 333.1 crore year on year (y-o-y) during the quarter ended 31 March 2017. Its net sales, however, fell 4.8 per cent y-o-y to Rs 1,909 crore from Rs 2,006 crore due to economic slowdown in GCC (Gulf Cooperation Council) markets.
After posting a six per cent dip in net sales during the December quarter, due to note ban, Dabur’s domestic sales improved this quarter. Its volume sales grew 2.4 per cent in India and topline grew marginally to Rs 1,435 crore. Net profit improved by 5.3 per cent y-o-y to Rs 302.3 crore.
Operating margin widened by 118 basis points to 21.9 per cent. Cost of materials went up by 1.68 per cent and was partially offset by a 1.36 per cent cut in advertisements and publicity budget for the quarter. Contribution of the domestic FMCG business grew to 71 per cent of Dabur’s consolidated revenue during the quarter – up from 66 per cent last year. Share of international business shrank by five per centage points to 25 per cent.
The business faced tough economic environment characterised by extreme volatility in currency, particularly in Egypt and North African markets, as well as crude-led economic turmoil in Saudi Arabia. In constant currency terms, consolidated net sales remained flat for the fourth quarter. Demand growth, still reeling under the impact of demonetisation, remained slow at the beginning of the quarter. However, it improved as the quarter progressed, led by a significant improvement in rural demand,” said Sunil Duggal, chief executive officer Dabur India.
Dabur’s net sales stood at Rs 7,680 crore for 2016-17 – 2.2 per cent lower than Rs 7,851 crore than a year ago. Unfavourable conditions in the domestic market post-note ban and currency devaluations in Egypt, Turkey, Nigeria and other MENA (Middle East and North Africa) markets impacted its sales during the year. Profit after Tax grew 2.1 per cent y-o-y to Rs 1,277 crore from Rs 1,251 crore.
According to Duggal, Dabur will strengthen its presence across key categories, leveraging its “herbal and ayurvedic heritage” in the current year.
Dabur India stock closed at Rs 286.55, 0.69 per cent lower than the previous close, on the Bombay Stock Exchange.
| Snapshot of Dabur India's financial results | |||
| Jan-Mar 2016 | Jan-Mar 2017 | Change | |
| Net sales | 2,006 | 1,909 | -4.8% |
| Net profit | 331.5 | 333.1 | 0.5% |
| 2015-16 | 2016-17 | Change | |
| Net sales | 7,851 | 7,680 | -2.2% |
| Net profit | 1,251.1 | 1,277 | 2.1% |
| Net sales and profit figures in Rs cr | |||