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Dabur India suffers 17.65% profit drop amidst high inflation, weak urban demand

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FMCG giant Dabur India Ltd reported a 17.65% drop in its net profit to INR 417.52 crore for the September 2024 quarter due to high food inflation and reduced urban demand.

Dabur India revenue drops by 5.46% to INR 3, 028 Cr 

According to India Retailing, Dabur India recorded a net profit of INR 507.04 crore in the same quarter last year. This quarter, their revenue from operations dropped by 5.46%, down to INR 3,028.59 crore from INR 3,203.84 crore in the same period the previous year.

Meanwhile, Dabur India’s total expenses dropped by 1.31% to INR 2,634.40 crore in the September quarter. “Despite a challenging demand environment marked by high food inflation and a resultant squeeze in urban demand, Dabur continued to drive consumer engagement across its key brands to end the second quarter of 2024-25 with a consolidated revenue of Rs 3,029 crore,” said Dabur in an exchange filing.

Dabur India sees 13% growth globally

Furthermore, its standalone revenue, mainly from domestic business, was 8.17% lower at INR 2,143.58 crore in the September quarter. “Our focused approach towards expanding our rural footprint to over 1.22 lakh villages reaped a rich dividend as rural demand outpaced urban demand by 130 bps during the quarter,” said CEO Mohit Malhotra.

Notably, FMCG giant’s International Business grew by 13% in the second quarter on a constant currency basis. “The Egypt business reported nearly 73% growth, while the MENA region grew by 10%, and Sub-Saharan Africa grew by 2%. The Badshah business also saw a 15% growth in Q2,” it said.

In the Q2, Dabur’s consumer care segment revenue fell by 4.13% to INR 2,487.60 crore. The food business saw a 13.45% drop to INR 467.39 crore, and revenue from the retail business decreased by 5.9% to INR 28.11 crore.

“Over the past couple of years, we have witnessed a marked shift in consumer buying patterns in favour of emerging channels like quick commerce, driven by the convenience this channel offers. This has resulted in the emerging channels growing at high teens, putting the General Trade under stress,” Malhotra added.

To adapt to market changes and support distributor partners, Dabur decided to adjust its inventory in General Trade, causing a temporary sales dip this quarter. “However, the move has resulted in improving the long-term health and hygiene of our business, paving the way for healthy growth going forward,” stated Malhotra.

Additionally, Dabur India owns brands like Dabur Amla, Dabur Vatika, Dabur Chyawanprash, Dabur Honey, Honitus, PudinHara, Dabur Lal Tail, and the juice brand Real. On the Brand’s future, Malhotra said, “We expect a recovery in consumer demand in the coming quarters, both in urban and rural markets. We are focusing on strengthening our competitive edge in the marketplace by investing in scaling up our rural footprint and rolling out consumer-centric innovations.”

To cater to this wider network, we have expanded our product basket with the launch of affordable and rural-specific pack bundles across categories, besides investing in consumer activations in the hinterland to establish a better connection with our consumers,” Malhotra further added.

Moving forward, Dabur India announced that its board has declared an interim dividend of 275% for FY 2024-25, which amounts to INR 2.75 per share, each having a face value of INR 1.

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