Expect sequential demand improvement over the next few months : Dabur India CEO
Amidst food inflationary pressures and sluggish urban demand, Dabur India posted a consolidated net profit of ₹515.82 crore for the December quarter up 1.85 per cent over same period previous fiscal.
Consolidated revenue was up 3.1 per cent to ₹3,355 crore. The company’s management expects to see sequential demand improvement in the coming quarters. It has also roped in consulting firm McKinsey to refine and align its future strategy and truncated its strategic vision cycle to three years from four years. At the same time, the company said it is gearing up to take on growing competition from cola brands with a sharper focus on offering more value for money to consumers.
Speaking at the earnings call, Mohit Malhotra, CEO, Dabur India said, “The quarter presented a challenging operating environment, marked by unfavourable weather conditions and a slowdown in consumption. India experienced delayed and contracted winters, with October and November being the warmest in many years, while urban demand showed signs of moderation, the rural markets remained resilient. The rural business has outperformed urban business for the fourth consecutive quarter. Organised trade channels such as e-commerce, big commerce and modern trade continue to deliver robust growth for us.”
Volatile geopolitical landscape
He added that in the wake of the volatile geopolitical landscape and uncertain macroeconomic indicators, the company has revised its strategic vision cycle from four years to three years. “We have partnered with leading consultancy firm McKinsey and Company to refine and align our strategy for the next three years in line with evolving dynamics. This exercise has already begun, and we plan to conclude the same by the end of the fiscal year. This will enable us to capture opportunities and navigate the future with sharper and more focused vision,” he stated.
“We expect sequential improvement in demand over the next few months on the back of an increase in infrastructure-related investments, good harvest and government initiatives to spur growth in the upcoming budget,” Malhotra added.
Calibrated manner
Talking about inflationary pressures, he added that price increases will happen both in juices and toothpaste portfolios but in a “calibrated manner” given the competitive intensity.
Responding to a query on the company’s game plan to fight the intensifying competition from cola brands, Malhotra said, “We are focusing on reducing the price differential between cola brands and us and giving more value to consumers. We have designed consumer offers for the nectar portfolio at a reduced price of ₹100 from the earlier ₹130. We will also introduce a new range of beverages at an economical price which will hit the marketplace during the season. We will also revamp our communication strategy to educate consumers that colas are just sugar-flavoured water.”
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