Note Ban Takes its Toll on Dabur

Co posts 7.3% fall in profit at ₹ 294.5 crore; sales down 6%

The Economic Times - - Brands: Creating Desire - Our Bureau

New Delhi: Prime Min­is­ter Modi’s cur­rency ban in Novem­ber se­verely im­pacted con­sumer goods maker Dabur’s earn­ings for the third quar­ter ended De­cem­ber 31, 2016, as the maker of Vatika sham­poo and Real juices re­ported 7.3% de­cline in net profit at ₹ 294.5 crore. “The whole­sale trade was se­verely im­pacted by de­mon­eti­sa­tion and we wit­nessed mas­sive amount of de­stock­ing across the en­tire trade chan­nel,” Dabur chief ex­ec­u­tive of­fi­cer Su­nil Dug­gal said in a state­ment. On the out­look, he fore­casted that while vol­umes could con­tinue to be flat in Q4, they would be bet­ter than that in the Oc­to­ber-De­cem­ber quar­ter. Net sales were down 6% year-on-year in the quar­ter un­der re­view, to ₹ 1,847.67 crore, com­pared to ₹ 1,967.48 crore in the year-ago quar­ter.

“The quar­ter ended De­cem­ber 31, 2016 was marked by a de­mon­eti­sa­tion-led liq­uid­ity squeeze that fur­ther im­pacted al­ready soft con­sumer de­mand across key FMCG cat­e­gories. This cou­pled with the global head­winds in the form of cur­rency fluc­tu­a­tions and ris­ing cost of key in­puts led to Dabur end­ing the third quar­ter of 2016-17 fi­nan­cial year with a con­sol­i­dated net sales of ₹ 1,847.7 crore,” the com­pany said in its state­ment on Tues­day.

Dabur said that the com­pany had stepped up spends on con­sumer pro­mo­tions and re­vamped sup­ply­chain to “in­crease fo­cus on the rel­a­tively more re­silient ur­ban markets, par­tic­u­larly mod­ern trade”. “We also stepped up di­rect dis­tri­bu­tion to tide over the sit­u­a­tion. These proac­tive mea­sures helped us ar­rest the slide and even re­port mar­ket share gains in key cat­e­gories,” Dug­gal said.

He added cat­e­gories such as pack­aged fruit juices and bev­er­ages, tooth­paste and sham­poo saw share gain in the quar­ter. While rev­enues from the con­sumer care busi­ness dropped 11.19% to ₹ 1,562.52 crore.

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