Q3-15: Dabur q-o-q marketing spends up 15.4 per cent

BENGALURU: Dabur India Limited (Dabur) spent 15.4 per cent more towards Advertisement and Publicity (ASP) in Q3-2015 at Rs 319.38 crore (15.4 per cent of Total Income from Operations or TIO) as compared to the Rs 253.35 crore (13.1 per cent of TIO) in the immediate trailing quarter and 10.3 per cent more than the Rs 289.62 crore (15.2 percent of TIO) in Q3-2014. This quarter’s ASP is the highest the company has spent over 9 quarters starting Q3-2013 until Q3-2015, both in absolute rupees and in terms of percentage of TIO. In Q1-2015 also, Dabur had spent 15.4 per cent of TIO towards ASP, but the amount was Rs 254.22 crore.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

In 9M-2015, Dabur spent Rs 858.99 crore (14.6 per cent of TIO) towards ASP as compared to the Rs 771.29 crore (14.5 per cent of TIO) in 9M-2014. The company’s lowest ASP in terms of percentage of TIO as well as absolute rupees during the period under consideration was 12.5 per cent and Rs 191.92 crore in Q4-2013. Dabur’s simple average ASP in terms of percentage of TIO is 14.1 per cent during the nine quarter period under consideration.

Fig 1 below indicates that Dabur’s ASP shows an upward linear trend both in terms of absolute rupees and ASP as percentage of TIO.

Among the products that Dabur has include health supplements like Chyawanprash, Ratnaprash, Honey, Glucose; digestives like Hamjola - Hajmola Chuzkara and Natkhat Amrud, Pudin hara fizz; OTC and Ethicals such as Lal Tail, Honitus Syrup; Haircare products like Vatika, Vatika Brave and Beautiful digital, Anmol Jasmine marks; Toothpaste brands like Dabur Red, Babool and Meswak; skincare products like Fem natural fairness, Gold Bleach, Gulabari; Homecare brands such as Odomos, Odonil and Sanifresh; Food brands such as Real and Real Active.

Dabur’s TIO in Q3-2015 was 7.7 per cent higher at Rs 2079.02 crore more than the 1929.58 crore in Q2-2015 and 9.2 per cent higher than the Rs 1904.56 crore in the corresponding year ago quarter. In 9M-2015, TIO at Rs 5887.46 crore was 11 per cent more than the Rs 5305.89 crore in 9M-2014. Figure 2 below indicates that TIO has an increasing linear trend during the 9 quarter period under consideration.

Dabur PAT in Q3-2015 at Rs 282.78 crore (13.6 per cent of TIO) was 1.6 per cent lower than the Rs 287.48 crore (14.9 per cent of TIO) in Q2-2015 and 16.4 per cent more than the Rs 242.88 crore in Q3-2014. 9M-2015 PAT at Rs 781.07 crore (13.3 per cent of TIO) was 15.1 per cent more than the Rs 678.63 crore in 9M-2014. Fig 2 below indicates that PAT in absolute rupees and in terms of percentage of TIO shows a linear increasing trend.

“While the macroeconomic environment continues to be challenging and competitive intensity remains high, we continue to pursue a prudent growth strategy and have been efficiently managing the risks and challenges. Despite a sharp fall in growth rates in most consumer products segments, Dabur continued to focus on brand-building and market expansion programmes and reported strong growth in its core categories, which have been significantly ahead of the market. Going forward too, our focus will be on pursuing an aggressive and profitable growth strategy,” said Dabur chief executive officer Sunil Duggal. Going forward, we will continue to pursue an aggressive growth strategy,” Duggal added.

Category Growths as per the company’s release

The Toothpaste business for Dabur grew much ahead of the industry ending the quarter with a strong 19 per cent surge. The Home Care business also reported an over 16 per cent growth during the quarter, while the Health

Supplements business grew by 13.5 per cent. The Hair Care category, led by strong growth in Shampoo business, ended the third quarter of 2014-15 fiscal with a 12.1 percent growth while the Foods category reported a near 12 per cent growth during the quarter.

The quarter also saw Dabur’s beauty retail subsidiary – NewU – mark a turnaround and report Profits for the first time in a quarter. The growth in Dabur’s International Business was led by Egypt at 29 per cent, Levant (comprising Yemen, Jordan, Lebanon & Syria markets) at 17 per cent and GCC at 14 per cent.

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