NEW DELHI: Dabur India has reported a tepid 1.3 per cent growth in consolidated net profit for the second quarter. However, the homegrown consumer goods firm said the quarter’s results were not comparable with last year’s due to the implementation of the goods and services tax (GST).
Factoring in the effects of GST and currency devaluations in major export markets, Dabur said the comparable net profits grew 7.2 per cent.
“Consolidated net profit for the second quarter stood at Rs 361.9 crore against Rs 357.3 crore a year earlier. However, adjusted for GST and currency translation, the comparable consolidated net profit marked a 7.2 per cent growth during the quarter while the comparable standalone net profit also reported a 7.2 per cent growth,” it said.
Revenue from operations during the period under review stood at Rs 1,959 crore, against Rs 1,982 crore in the year-ago period.
The firm’s margins have been affected by external geopolitics, too.
“The overseas business performance was hit by a combination of steep currency devaluation in Egypt, Turkey and Nigeria, and the continued geopolitical disturbances in key geographies,” the firm said.
Dabur’s performance signals a revival in consumption trends.
“With the GST headwinds settling down and improved consumer offtake in domestic markets, Dabur India reported a strong surge in the domestic consumer growth,” it said.
Dabur India CEO Sunil Duggal added that the medium to long-term prospects, particularly for India, remain robust and “domestic consumer demand will gain pace in months to come”.
According to him, with consumer demand for nature and Ayurveda-based products on the rise, Dabur’s positioning as the ‘science-based Ayurveda’ specialist will push future growth.
The view is buttressed by recent results from major FMCG firms that have also seen consumption rising. Hindustan Unilever, for example, recorded a net profit growth of 16.42 per cent at Rs 1,276 crore.
With GST-related accounting changes factored in, revenue grew 6.5 per cent and domestic consumer revenue grew 10 per cent.
And, while ITC took a hit on margins due to the adverse impact GST has had on cigarettes, the FMCG business recorded a 10 per cent rise during the quarter.