Dabur India has declared its FY08 results. Its net profit Rs 333 crore versus Rs 281 crore. Its consolidated net profits was at Rs 79.7 crore and consolidated net sales were at Rs 606.49 crore.

Sunil Duggal, CEO of Dabur India said that he sees 15-20% growth next year. Going forward, the inflation will result in lower margins, he said. Their EBIT margin is up 21%, he said. They would take a decision on pricing by the end of May, depending upon inflation, he said. The company’s toothpaste business has grown by 25% , Duggal informed.

Excerpts from CNBC-TV18’s exclusive interview with Sunil Duggal: 

Q: Your quarterly numbers are a little lower than market expectations - can you break up this quarter’s performance between volume growths and whether or not there was some kind of price increase as well?

A: We recorded a revenue growth of 13.5%, of which price component was 3%. So the volume growth is in excess of 10%.

Q: What about pricing - did you see any sort of increase across categories this time around?

A: So far we have been holding the price line despite the fact that inflationary pressures are now beginning to see themselves on the ground.  Going forward, in the next few weeks we would decide whether we are to take a round of price increases or whether we can hold the price line and that will be predicted upon how we see inflation going forward, i.e do we expect inflation to ease or is it going to remain the way it is. So the decision on pricing will be taken by mid-May.

Q: Specifically for toothpaste and hair care categories, what kind of volume growth have you seen this time around and realization improvement as well if there was?

A: Both these categories have done absolutely well. Oral Care has show 15% growth. Toothpaste has shown a growth of 25%; so we are fastest growing toothpaste brand in the market.

Hair care has done extremely well - both hair oil and shampoo and Amla Hair oil, our flagship brand has grown 15%, the shampoo portfolio has grown by 25%. So both these categories have shown very encouraging growth. They are high margin brands in very competitive environment and we have gained share everywhere in these categories.

Q: For some of your larger players in the FMCG space, they struggled a bit with margins, what kind of margin performance did Dabur have this quarter?

A: Our EBIT (Earnings Before Interest and Tax) margin growth has been healthy. If you take the sales without the retail initiative the EBIT growth has been 21% which is extremely encouraging.

So far the margin pressure is not being felt. But going forward, we would expect inflationary pressures to start nibbling away at margins unless we are able to neutralize them through price increases.

Q: You won’t give guidance but what is the doable growth rate in the next financial year?

A: We would expect the revenue growth to be in the 15-20% band. We don’t see any slacking of demand and so the problems are not at the revenue side; they are more in terms of margins. So I would expect revenue growth to be in the 15-20% band. We have to see how we can control inflationary pressures to keep the bottomline intact and to have expansion in margins even with a strong topline growth.