Dabur’s Revenue Falls For Second Straight Quarter

Consumer goods maker Dabur India Ltd. reported its second quarterly revenue loss in a row due to continued impact of demonetisation and adverse currency fluctuations in the Middle-East and North Africa.

Revenue in the March-ended quarter fell 4.8 percent to Rs 1914.6 crore, compared to the year-ago period. However, profits rose 0.5 percent. While the topline missed analyst estimates tracked by Bloomberg, the bottomline met forecasts.

Operational profits rose 3 percent to Rs 482.6 crore while operating margins expanded 190 basis points to 25.2 percent.

“Tough economic environment” due to “extreme volatility in currency” in the Middle East and North Africa regions hurt the revenue, Dabur said in a media statement. The central banks of Nigeria and Turkey have weakened their local currency owing to falling oil prices and political instability. Egypt too devalued its currency last year to meet a demand set by the International Monetary Fund for sanctioning a $13 billion loan. Saudi Arabia and the United Arab Emirates have been facing challenges of an economic slowdown of their own, according to Dabur's investor presentation.

The international business contributes over a quarter to Dabur's consolidated revenue.

Domestically, the company saw its volume growth rebound to 2.4 percent, from a 5 percent decline in October-December because of demonetisation. Demand growth is still under the impact of note ban, the statement said. Volumes had grown 7 percent in the same quarter of the previous year.

Raw material costs rose 19 percent at Rs 807 crore, which is more than half the sales. Consumer care segment, which contributes over 80 percent to the topline, clocked sales of Rs 1,550.8 crore, down 6.7 percent from the year-ago period.

The company aims to ride on a “herbal wave” trend in the market, besides improving focus on core segments like hair, oral and skin care, the presentation said. Dabur commissioned a new manufacturing facility built at a cost of Rs 250 crore in Tezpur, Assam in March, its largest production unit anywhere in the globe.

The board has proposed a final dividend of Rs 1 per share, amounting to Rs 212 crore.