Note Ban Takes its Toll on Dabur
Co posts 7.3% fall in profit at ₹ 294.5 crore; sales down 6%
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.