Dabur Expects To Improve Performance In October To March

A cutomer walk through a food aisle at a Big Bazaar hypermarket. (Photographer: Dhiraj Singh/Bloomberg)

Written by
Sharleen Dsouza
Written by

Sharleen Dsouza

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Dabur India Ltd. expects to post a better performance in the ongoing financial year, especially in the second half, after the consumer goods maker's revenue fell in the last two quarters of 2016-17.

“We expect our topline to grow in mid to high single digit, but we will have to see if there is any short-term impact of GST (Goods and Services tax) in the month June, considering July 1 as the rollout timeline,” said Lalit Malik, chief financial officer of Dabur India.

In the three months ended March, Dabur India's revenue fell 4.8 percent year on year to Rs 1,914.6 crore. It fell due to continued impact of demonetisation and adverse currency fluctuations in the Middle-East and North Africa.

With the GST expected to roll out from July, there is a possibility that bulk dealers will reduce their stock of consumer products as the prices will change under the new regime.

We expect our volumes to grow even if there is some temporary blip because of GST. H2 (October-March) should see a very positive growth, because we expect GST to be beneficial in the medium to long term.

Lalit Malik, CFO, Dabur India

The company said that de-stocking by stockists has already begun. If the tax rates will be identical to current levels, there may not be too much destocking; but if there is a significant change, bulk dealers will cut stock prior to the implementation of GST, Malik said.

The maker of toothpaste to hair oil also plans to increase prices by 1.5- 2 percent in the current financial year as prices of raw materials like oil and sugar have been rising.

Considering the inflationary trends of some of our raw materials, we will certainly be looking at a price increase in select products where raw material costs will go high. We will selectively take price increases. The extent will depend on the inflationary impact.

Lalit Malik, CFO, Dabur India

The company said its operating margin improved by 30 bps to 19.6 percent of sales in the last financial year and it expects to maintain the level in FY18.

Dabur India launched new products like Red Gel toothpaste, Brahmi Oil and Real Ju.C towards the end of the FY17 and will launch more products across categories in the second half of FY18, Malik said.