Dabur India Q3 net profit up 6%, FMCG major continues its growth momentum

Fast moving consumer goods major Dabur India Ltd reported a 6.2% year-on-year increase in its net profit for the October-December quarter. The company’s net profit surged to Rs 506 crore in the quarter, over Rs 476 crore it's had posted in the corresponding quarter previous year. While it declined marginally over Rs 507 crore it had reported in the previous quarter.

The Ghaziabad-based consumer goods maker’s operating revenue surged 7% per cent during the quarter to Rs 3,255 crore - up from Rs 3,043 crore in the December quarter of 2022. Increase in its cost of materials consumed remained one of the key factors behind lower rate of growth in its bottom-line. Dabur’s cost of materials grew 8.2 per cent y-o-y to Rs 1,270 crore. While expenses related to advertisement and publicity jumped 36% to Rs 244.5 crore.

Dabur continued to build and sustain its growth momentum, posting category-leading growths with market share gains across the portfolio. However, the delay in onset of winters slightly impacted its healthcare and winter portfolio, the company said. Dabur’s India business ended the quarter with 6% volume growth. While the international business that contributes close to a fourth towards its top-line reported a growth of 11.7% in constant currency terms. The Nigeria business grew by 52%, while the Turkey business was up 44% and the Egypt business ended with a 43% growth over the same quarter previous year.

“We remain intensely focused on our strategies of managing an agile and accountable organisation structure with a focus on superior product delivery and constructive disruption to drive sustainable, profitable growth across our portfolio. Moderating inflation coupled with buoyant consumer sentiments and our focussed investment in distribution footprint expansion in rural India helped demand from the hinterland bounce back for Dabur. Rural demand for Dabur grew 200 bps ahead of urban. We have also stepped-up investment behind our brands to drive competitive volume growth, reflected in our higher advertising spends during the quarter” said Mohit Malhotra, Chief Executive Officer, Dabur India.

According to him, Dabur is investing in grow its rural footprint, which has expanded by 17,000 villages in the current fiscal from 100,000 to 117,000 villages. “We are working towards ending this year with a rural coverage of 1.2 lakh villages. Dabur’s rural distribution has, in fact, been the highest in the industry, giving us a distinct advantage and helping drive our rural growth,” he added.