Rural comeback should be more enduring trend going forward: Dabur India CEO
Dabur India Ltd will continue to expand its portfolio across price points and build on its power brands, said Mohit Malhotra, CEO, Dabur India. During the June quarter, the maker of Vatika shampoo and Hajmola candy reported a 8% jump in rural volumes much ahead of the market that grew 4%. Malhotra said rural demand was growing for the company driven by introduction of bridge packs, growing distribution coverage, and a general uptick in demand.
Edited excerpts. Why we talk about rural so much is because the contribution of Dabur’s business coming out of rural areas is relatively higher when compared to our peers. They will be in the range of 30- 35%, we are in the range of 45-50%.
Rural areas are good for us. We have put up a lot of infrastructure—sub-stockists and rural yodhas etc. Over the last one or two quarters, we’ve seen rural growth kind of picking up.
Volume is the barometer of our assessment of rural business, so the volume has now turned from red to black. Last year around this time, inflation in our basket of raw materials was in double-digits, now we see inflation in the range around 2-2.5%… the cost of products is coming down for the consumer, and there is more money in the hands of the consumer. Therefore, spending is going up.
Some of the macro-factors behind a good rural performance are that the crop (rabi) has been good. The harvest was impacted because of unseasonal rains, but going forward, even the sowing of rice, which requires a lot of rain, has been good. MSP or minimum support price has gone up since it is an election year.
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