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Bengaluru: Homegrown fast moving consumer goods (FMCG) major Dabur India reported lower than expected consolidated net profit of Rs 425 crore for the July-September quarter on back of weak urban demand. The company’s bottomline slipped 17.5 per cent from the same quarter last year, while sequentially, it was down 15 per cent.
In its investor presentation, Dabur also attributed the earnings hit to persistent high food inflation. Consolidated revenue fell 5 per cent to Rs 3,029 crore, as revenue from its food and beverage segment took a hit of 11 per cent on account of heavy floods in parts of India.
“We expect 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 as rural demand outpaced urban demand by 130 bps during the quarter,” chief executive officer Mohit Malhotra said.
Dabur had been looking to reduce its inventory at kirana stores as it witnessed a shift in consumers’ preferences towards supermarkets and online platforms.
Dabur also announced that it will acquire Sesa Care Private Limited for Rs 12.59 crore, subject to regulatory approvals, in a regulatory filing on Wednesday.
“Dabur’s results are in line with what was expected. Inflation has been a major contributor to the downbeat performance as FMCG companies in general have not been passing on the price rise to the consumers,” said Ankur Bisen, Senior Partner & Head - Consumer Food & Retail, Technopak Advisors.
The company’s board also declared an interim dividend of Rs 2.75 per share, aggregating to a total payout of Rs 487.39 crore.
Its peer Procter & Gamble Hygiene and Health Care (PGHH) reported a slight uptick of 0.57 per cent in profit after tax (PAT) at Rs 211.90 crore for the quarter ended September 2024, supported by increased spending in the healthcare and feminine care segment.
The company follows a July-June financial year, and had reported PAT of Rs 210.69 crore in the corresponding quarter of the previous year.
Revenue from operations fell marginally by 0.28 per cent to Rs 1,135.16 crore against Rs 1,138.35 crore a year ago. On the other hand, total expenses were up 26 per cent on a year-on-year (YoY) basis at Rs 826.78 crore. The Vicks and Whisper maker’s total income stood at Rs 939.06 core, up by 8.86 per cent.