Expect 5-10% volume growth in FY18; GST uncertainty may impact: Dabur

Dabur India reported disappointing set of numbers this quarter. India volumes grew 2.4 percent which was a material recovery over the 5 percent decline in Q3, but its international business is still under stress.

In an interview to CNBC-TV18, Sunil Duggal, CEO of Dabur spoke about the Q4 performance and the outlook going forward.

Below is the verbatim transcript of the interview.

Sonia: The volume growth has been in line with estimates but way below what Dabur historically does. Are you happy with this performance?

A: Under the circumstance 2.4 percent is a good performance on the back of minus 4 percent which we did last quarter. So the lingering effects of demonetisation still continue in this quarter at least in the earlier part of this quarter but as we go forward the volume growth should definitely trend up. We are expecting much higher volume trajectory in the year coming. So I am reasonably satisfied with what we did in Q4 but with expectations of better days ahead.

Anuj: What can we expect in FY18?

A: I would hazard a guess that we should be in the region of 5-10 percent volume growth. I cannot make it any sharper than that because there is still an issue of GST and the consequences of GST, which we do not know how it will pan out but 5 and hopefully trending more towards 10 is what we can expect this quarter. Double digits will probably take a little bit longer when the whole system stabilises; GST is fully incorporated and consumer demand revives even more strongly and it could happen earlier if there is a good monsoon but we would be on the side of caution and trending at 5-10 percent levels.

Sonia: How has the recovery in rural areas been - that forms about 45 percent of your revenues? What is the demand situation there currently?

A: This quarter rural performed a bit better than urban and the pain points still seems to be urban general trade. Rural is trending up, modern trade continues to do well, so rural is definitely looking up and now it depends upon monsoon and if the monsoon is good then we could see double digit growth happening in the rural markets.

For entire interview, watch accompanying video.