Dabur Q1 profit rises 15% as India FMCG business grows 9.5%; rural demand stays ahead of urban

Dabur India reported a 15% year on year rise in consolidated net profit to ₹591 crore for the quarter ended June 30, helped by broad based growth across its India FMCG business, premium products and international operations, even as inflation, geopolitical tensions and volatile commodity prices continued to weigh on the operating environment. 

Consolidated revenue from operations grew 10.6% to ₹3,761 crore during the quarter, while the India FMCG business expanded 9.5%, driven by an underlying volume growth of 5%. The company also posted an 11% increase in operating profit, marking its third consecutive quarter of double-digit profit growth. 

"This marks the third straight quarter of double-digit profit growth for Dabur. The quarter unfolded against a backdrop of persistent inflationary pressures, heightened geopolitical uncertainties in the MENA region, and volatile commodity markets. In this hyper inflationary environment, our disciplined cost management with Project Samriddhi, operational efficiencies and judicious price increases helped report healthy profit growth during the quarter," global chief executive officer Mohit Malhotra said. 

The company said it gained market share across more than 90% of its portfolio during the quarter, supported by a combination of execution, innovation and premiumisation. Premium brands grew at twice the pace of the regular portfolio, while new product launches contributed 2.6% of revenue. According to Malhotra, recently launched brands such as Siens and Cheers have strengthened Dabur's presence in emerging consumer segments and premiumisation will play a larger role in the company's next phase of growth. 

Rural demand continues to outperform

Dabur said rural India remained the stronger consumption market for the eighth consecutive quarter, although the gap with urban demand continued to narrow.

According to syndicated data cited by the company, rural demand grew 6.2% in the first quarter, compared with 4.6% in urban markets, a difference of 170 basis points. Malhotra attributed the improving urban performance to modern trade, quick commerce and other emerging channels.

"We believe this reflects a healthy broadening of India's consumption story across urban and rural India. While the consumption landscape is becoming more balanced, rural demand needs to be watched especially in view of El Nino, patchy monsoons and rising inflationary pressures," he said. 

Growth during the quarter was spread across Dabur's key business segments. Home and Personal Care led the performance with 12.3% growth, followed by Food and Beverages at 7.2% and Healthcare at 5.5%. 

Within Home and Personal Care, the shampoo business grew 23%, while hair oils rose 17.6%. Oral care recorded 9% growth, with the toothpowder segment expanding 13.1%. The Skin and Salon portfolio grew 8.1%, while Home Care increased 6% despite supply chain disruptions arising from the Middle East conflict. 

Healthcare also delivered healthy growth, with the digestives portfolio rising 11.2%. Honitus grew 28%, health juices expanded 24%, while Dabur Honey recorded 8% growth. In foods, the category grew 29.2% and the Badshah business rose 13.2%. The beverages business recovered after a rain affected start to the season and returned to positive territory with mid single digit growth. Premium beverages continued to outperform, with Real Activ Juices growing 42% and Coconut Water surging 73%. 

International operations also remained a key growth driver, reporting 15.5% growth in rupee terms. Bangladesh led the performance with 34.3% growth, followed by Egypt at 28.4%, Sub Saharan Africa at 28%, Turkey at 26.9% and the UK at 21.9%. The MENA business grew 8.6% despite war related disruptions in the region.