Dabur India came out with a good set of Q3 numbers. In an interview to CNBC-TV18, Lalit Malik, CFO of Dabur spoke about the results and his outlook for the company.
Below is the verbatim transcript of the interview.
Anuj: Your thoughts on volume growth first. You had double digit volume growth this quarter of course, but now I think the base effect will no longer be that favourable that it was for this quarter. So what kind of volume growth can you report going forward?
A: I think we have seen a good volume growth in our Consumer Care Business (CCB) business in all the categories that we are operating on and you are right it is also because of the low base of last year same quarter. Going forward we would maintain our stand that we will see the volume growth between 5-10 percent and we maintain our same range of 5-10 percent volume growth going forwards in next quarter also.
Surabhi: So that is a 5-10 percent volume band projection for Q4, any sense of FY19 that you can give us right now because FY18 was laced with too many of these disruptive events from demonetisation, goods and services tax (GST) etc. Do you have visibility on the next fiscal right now on volumes?
A: It is too early to talk on the volume for next year, but what we can say is that H1 has seen a low base in this financial year so going forward we do expect that there would be an upside comparatively arising for FY19. However, it is little early to say what that amount or range is going to be, but we would be able to say closer to the next of end quarter.
Surabhi: On volumes I just want to ask you specifically about honey because that was the big category where the battle was on between sort of certain new entrants in the market and that category has done very well for you there. Do you think the worst of that sort of market share shift, call it what you want, is that behind you and are the volumes on the honey business sustainable now?
A: Certainly, what we have seen is that there was an erosion with regard to our market share to some extent in H1 (first half) earlier quarters but from last quarter we have seen the growth coming back and now we have seen gaining our market share back. Therefore, we do expect that we will be able to come stronger from here going forward and will be able to strengthen our market share further.
Surabhi: A word on the margins because at 20 percent plus they look very handsome right now and again the sustainability of that number and also what are the price strengths looking like now? Q3 of course you passed on the GST benefits but looking at the input cost side and just looking at the pricing environment what can we expect in Q4?
A: I think what we have seen of late is that there have been some extend inflationary pressure coming on some of the input raw materials like coconut water, we have seen in liquid light perrafin (LLP), we have seen crude oil getting costlier. So we have seen some pressure coming up going forward in quarter four on some of the margins. Therefore, our efforts is going to be to sustain those pressures to the extent we can through our synergies an in case if it is required we may consider some price increase also but it will be very selective.
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