Dabur India's Q1 profit meets estimate on steady rural demand
Consumer goods maker Dabur India reported first-quarter profit in line with expectations on Thursday, as rural demand picked up, particularly for its personal care products.
The toothpaste-to-honey maker's consolidated net profit rose 8% to 5 billion rupees ($59.73 million) in three months ended June 30 meeting analysts' average estimate, as per LSEG data.
The sales of fast-moving consumer goods started showing signs of recovery in the January-March period, with rural growth outpacing urban areas for the first time in five quarters.
The rural segment accounts for 45%-50% of Dabur's total revenue.
The consumer care segment, which contributes 77% to the company's revenue mix, climbed 7% during the quarter, aiding a 7% rise in total revenue.
The company's earnings were also aided by stable commodity prices during the quarter. It posted a 1% rise in the cost of raw materials.
Early onset of monsoon has boosted the prospects of bumper harvests that could further drive farm incomes and rural consumption, analysts said.
Dabur's shares rose 1.5% after the results. They gained 15% in the June quarter compared to a 5.2% rise in the Nifty fast-moving consumer goods index.
Dove soapmaker Hindustan Unilever reported higher earnings due to increased demand following price cuts. In contrast, KitKat producer Nestle India experienced its slowest growth in eight years, as price hikes led to reduced consumer spending.
($1 = 83.7090 Indian rupees)
