Dabur Q2 Business Update: Snag In Sales Due To Deferred Purchases Ahead Of GST Revamp

Dabur India Ltd. informed that there was a temporary disruption in trade on account of consumers deferring purchases ahead of the new GST reforms coming into effect, according to an exchange filing on Tuesday.

In addition to this, distributors and retailers also focused on liquidating the existing higher-priced inventory, as per the filing.

However, the home-grown FMCG major added that despite the headwinds, their brands like Dabur Honey, Anmol Coconut Oil, Gulabari and Hajmola Zeera did not absorb GST impact and performed well, and retail offtakes continued to be resilient, enabling them to sustain market-share gains in more than 90% of their portfolio.

The company expects consumption to increase with supportive macroeconomic conditions and the recently announced GST rate cuts, and it anticipates revenue growth to regain momentum in the coming quarters.

About GST rationalisation measure, Dabur said it is a landmark step towards driving affordability and enhancing purchasing power, which will boost consumption across categories and strengthen demand in both urban and rural markets.

"In Home & Personal care, Oral care portfolio continued its strong growth trajectory and is likely to deliver double-digit growth in both Red Toothpaste and Meswak. This was on the back of strong on ground execution and focused marketing initiatives," the filing added.

Moreover, the company's skin care portfolio will see high single-digit growth, led by Gulabari and Oxy franchise. The hair care segment will strengthen its roots on the back of Vatika shampoos, while the hair oils segment is expected to report mid-single digit growth.

Other than this, the company noted that higher-than-expected rainfall and floods in July and August impacted their overall beverage portfolio but expects growth in the segment will be driven by the Activ portfolio.

"This quarter the Activ portfolio is expected to report robust growth of 30%+ led by both Activ juices and Coconut water", the filing said.

It added that the F&B and Culinary business is expected to record double-digit growth with strong performance in oils and fats.

Unrest in Nepal led to the company's international business being impacted, but other regions like MENA, Turkey and Bangladesh are expected to perform well.

"Consequently, we expect our overall international business to post mid-single digit growth in INR and CC terms", the filing added.

Lastly, Dabur forecasted that its consolidated revenue will grow in the mid-single digits and operating profit will grow almost in line with revenue.