 "Dabur")
Lower commodity prices compared to last year will have a positive impact on Dabur India from the September quarter, but the full benefits of moderating inflation will only be seen in the subsequent quarter, according to the company.
The home-grown fast-moving consumer goods major also anticipates a good festival season to aid its growth in the December quarter.
“The sentiment is far better as compared to last year. It’s very positive. But the delay in festivals will have an impact on this quarter,” Mohit Malhotra, chief executive officer of Dabur India, told Business Standard in an interview. He explained that the festival season has been pushed to November, as against October last year.
“The festival season was impacted heavily last year due to high inflation. Contrary to that, the sentiment is looking good this year. However, the impact of that will only be reflected in the third quarter,” he said.
The company has seen an upswing in rural demand in the last few quarters and Malhotra expects the trend to continue.
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“The gap between rural and urban is continuously shrinking. According to the latest numbers, the gap between the two has reduced to 400 bps (basis points) in July from 700 bps in June,” Malhotra said.
He added that apart from moderating inflation, better infrastructure had also helped the rural sector to grow. “With the election year approaching, we will see a lot of new grants and digital transfers for the rural sector. MSP (minimum support price) has also gone up. All of this augurs well for the rural market.”
Dabur had seen its rural growth bounce back to high single digits in the April-May-June quarter, after a gap of three quarters. The company, which makes Hajmola and Real juices, reported an increase of 5.3 per cent in consolidated net profit at Rs 464 crore.
Malhotra added that Dabur India is hopeful of gross margins seeing an upswing. This will be on the back of consumer promotions and will flow back into advertising spend.
