Dabur Q2 profit down 17.6 pc to Rs 417.5 cr impacted by inflation squeeze in urban demand

     New Delhi, Oct 30 (PTI) Homegrown FMCG major Dabur India Ltd on Wednesday reported a decline of 17.65 per cent in its consolidated net profit to Rs 417.52 crore in the September 2024 quarter on account of high food inflation and squeeze in urban demand.
     The company had posted a net profit of Rs 507.04 crore in the July-September quarter a year ago, Dabur India said in a regulatory filing.
     Its revenue from operations slipped 5.46 per cent to Rs 3,028.59 crore during the quarter under review. It was Rs 3,203.84 crore in the corresponding quarter of the previous fiscal.
     Dabur India's total expenses were at Rs 2,634.40 crore, down 1.31 per cent 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," Dabur said in its earnings statement.
     Its standalone revenue from operation, which mainly consists of the domestic business, was 8.17 per cent lower at Rs 2,143.58 crore in the September quarter.
     "Our focused approach towards expanding our rural footprint to over 1.22 lakh villages reaped rich dividend as rural demand outpaced urban demand by 130 bps during the quarter," its CEO Mohit Malhotra said.
     Dabur's International Business reported a growth of 13 per cent on a constant currency basis during the second quarter.
     "The Egypt business reported a near 73 per cent CC (constant currency) growth, while MENA (Middle East/North Africa) business grew by 10 per cent and Sub-Saharan Africa grew by 26 per cent. The Badshah business also reported a 15 per cent growth in Q2," it said.
     In the September quarter, its consolidated revenue from the consumer care business segment dropped 4.13 per cent to Rs 2,487.60 crore.
     Similarly, revenue from the food business declined 13.45 per cent to Rs 467.39 crore in Q2FY25.
     Dabur's revenue from its retail business slipped 5.9 per cent to Rs 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 said.
     To address the changing dynamics in the marketplace and support distributor partners, Dabur took a proactive decision to rationalise inventory in the General Trade, which resulted in a temporary dip in sales during the quarter, he said.
     "However, the move has resulted in improving the long-term health and hygiene of our business, paving the way for healthy growth going forward," Malhotra said.
     Dabur India owns brands such as Dabur Amla, Dabur Vatika, Dabur Chyawanprash, Dabur Honey, Honitus, PudinHara and Dabur Lal Tail and juice brand Real.
     On the outlook, 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 added.
     Meanwhile, in a separate filing, Dabur India said its board had declared an interim dividend of 275 per cent for FY 2024-25, which is Rs 2.75 per share, having a face value of Re 1 each.
     Shares of Dabur India Ltd settled 2.07 per cent higher at Rs 546.95 apiece on the BSE.

(This story has not been edited by THE WEEK and is auto-generated from PTI)