Chyawanprash-maker Dabur India Ltd. will exit a series of non-performing portfolio offerings, including the tea, diapers, and sanitizing segments, to release capital and focus on the core portfolio and pushing premiumization.
Following an exercise with consulting firm McKinsey, Dabur India's CEO Mohit Malhotra shared that some portfolio rationalization will occur and a clear exit path for some non-performing categories, that have been margin dilutive, has been identified. These segments contribute less than one percent to the firm's revenue.
"So the categories that we will get out from is Tea, adult and baby diapers, the sanitizing category and beta categories. So we will get out of these categories and focus on big bold equities which we've identified and core portfolio is where we will invest," said Malhotra, in an earnings call with analysts following the consumer player's March quarter results.
A big theme Dabur is focusing on is premiumization and contemporization across the portfolio. "So if you look at past four to five years, we generally focused on increasing market share and consolidating our business in each of the categories. But premiumization has less been focused and it was a deliberate attempt because we wanted gain market share," added Malhotra.
Now that Dabur India gained market share in Chyawanprash, in honey, in Amla, in homecare, in skin care, the firm will embark on premiumization and contemporization.
"And we have identified segments that we will enter for premiumization like in hair care, we always focused on gaining market share in Dabur Amla going forward, you will see a concerted effort on premiumization. We will focus investments on post-bath categories like serums, conditioners, and masks. In the beverages segment, we will invest money on the Activ portfolio, and communicate on the zero sugar and low preservative range of beverages," he added.
Healthcare segments like Chyawanprash, honey, glucose will be updated to modern formats which resonate with new consumers.
Dabur India reported a 8.4 percent decline in consolidated net profit to Rs 320.13 crore in the March quarter. The homegrown FMCG major had posted a net profit of Rs 349.53 crore in the year-ago period.
Its revenue from operations was up 0.5 percent to Rs 2,830 crore during the quarter under review. It was Rs 2,814.6 crore in the corresponding quarter of the previous fiscal year, Dabur India said in a regulatory filing.
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