Dabur Q3 net up 12%; expects profit margins to improve

Packaged personal care products and foods maker Dabur on Tuesday said it expected better profit margins in the next few quarters with signs of inflation stablising, as its consolidated net profit for the October-December 2011 quarter went up 12% to Rs 172.82 crore over the corresponding year-ago period.

Analysts said offtake of sales helped the firm offset surge in expenses. Higher input costs and increased ad spends contributed to the consumer goods firm’s costs increasing 40% to Rs 1,252 crore in the quarter. Its raw material costs in the quarter were up 25% year-on-year at Rs 560.05 crore.

CEO Sunil Duggal said the firm’s focus would be improving its market shares and profitability. “Despite inflationary pressures and macro-economic challenges, we have managed our business through a combination of price increases and focus on cost efficiencies,” he said.

Net sales for the quarter, up 34.5% at Rs 1,452.68 crore over the previous year-ago quarter were ahead of street expectations, and analysts said Dabur offset currency fluctuations by growth in its international business.

The maker of Vatika hair oils and Real fruit beverage declared that its EBITDA (earnings before interest, tax, depreciation, amortisation) margin declined to 16.7% from 20.1% in the same period last year. While the hair oils business led by Amla and Vatika grew 22%, the home care category led by Odonil air fresheners grew 18%.

New products in the quarter included Fem facial kits and Almond hair oils. Shares of the company were up 1.73% at Rs 94.1 on the BSE.