PremiumDabur India is set to invest ₹550 crore to build additional capacity, and augment its healthcare, home and personal care portfolio, its chief executive officer, Mohit Malhotra, said in post-earnings call on Friday.
The packaged consumer goods company reported a 34% increase in its fourth quarter net profit to ₹377.29 crore from a year earlier.The company had posted a net profit of ₹281.60 crore in the year-ago period.
Premium Premium For the quarter ended 31 March, consolidated revenue from operations stood at ₹2,337 crore, an increase of 24.5% from the ₹1,865.36 crore reported by the company last year.
The maker of Vatika shampoo and Dabur Red toothpaste has purchased land in Madhya Pradesh as part of its efforts to enhance capacity. “We’ll invest ₹550 crore in the next four to five years to set up a greenfield facility in central India to cater to our east, south, west, and also the north region. We’ve already taken a 50-acre land near Indore to spruce up and augment our capacities essentially for the healthcare business, Chyawanprash and also the home and personal care business. That is what we are doing to augment capacity in the long term because penetration of healthcare is going up in the country and for the long term we have to be prepared," Malhotra said.
India business reported volume growth of 25.4% during the quarter. Sales and profit were below the brokerage’s estimates given the firm’s low base quarter, said analysts at Edelweiss Securities. The firm raised prices during the quarter due to “unprecedented inflation" and warned of another round of price increases. The operating environment remains “very challenging", Malhotra said, with localized lockdowns leading to some last-mile disruption. Consumers could also shun discretionary purchases, he warned.
“While this remains a developing situation, our factories continue to operate on a relatively normal basis. We anticipate that there may be an impact on the discretionary product portfolio as people are staying home and outdoor activity is restricted," he said.
However, the company’s healthcare portfolio, especially the Ayurvedic products, is witnessing an improvement in the second part of April and should make up for any loss in the discretionary product business, he said.
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