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Informist, Wednesday, Oct. 30, 2024

--Dabur: To increase engagement with dentists to 100,000 going ahead

--Dabur: To increase engagement with dentists to improve oral care sales

--CONTEXT: Comments by Dabur management in post-earnings conference call

--Dabur: See oral care business as aggressive vector for growth in India

--Dabur: Hair care business to become growth vector in international mkt

--Dabur: To soon introduce 1 ltr juice packs for INR 100 to up foods business

--Dabur: Food inflation at 9% a concern for future growth

--Dabur: Aim to grow in coconut, perfumed hair oil segment with Sesa brand

--Dabur: See huge headroom to grow Sesa brand of shampoo

--Dabur: See high double-digit growth in hair care ops post Sesa acquisition

--Dabur: Will expand distribution in rural India as per product category

--Dabur: Will consolidate distribution in urban India

--Dabur: Building specific products for quick commerce, e-commerce

By Avishek Rakshit & Akshay Johnson

KOLKATA – Dabur India Ltd. is looking at high double-digit operating margin from the hair oil segment and increased presence in the coconut and perfumed hair oils category once the acquisition of 51% stake in Sesa Care Pvt. Ltd. is completed and the latter is merged with the company, Chief Executive Officer Mohit Malhotra said Wednesday.

Talking to analysts in a conference call after declaring the Jul-Sept results, Malhotra said the acquisition of Sesa Care and its resultant merger with Dabur India will give the company the scope to increase presence of the Sesa brand in India and abroad, and enough headroom to increase sales in the shampoo category.

"Our hair oil portfolio is today giving me a operating margin of low double digit which will end up giving me a high double digit operating margin. So it will be a positive leverage on the operating market," Malhotra said.

The Sesa brand of hair oil is the third largest in the Ayurvedic hair oil segment in the country having 11% market share. On the other hand, Dabur India, with its Vatika, Anmol and other brands of hair oil, has been increasing market share over the past many quarters. In the Jul-Sept period, the market share of Dabur's organic hair oil brands rose by 40 basis points.

Once the acquisition is completed, Dabur will use its existing 400,000-500,000 odd direct distributors in India to push sales of Sesa which currently has a distribution base of 120,000. As a result, Dabur's growth from the hair care segment could go up to high-double digit from the current low single-digit, Malhotra said. On the other hand, Dabur will continue to engage closely with e-commerce and quick-commerce companies to increase sales, mainly, in urban locations. The company will also be launching specific products for quick commerce and e-commerce, Malhotra said.

At the same time, the company is planning to revamp its current distribution model. While it is planning to consolidate distribution in urban India, it is planning to expand and modify the distribution base in rural locations to improve distributors' margins. Currently, Dabur has indirect presence at around 4.5 million outlets, which, Malhotra said, will increase in coming days. Dabur will also distribute its products to the distributors in accordance to categories like foods and beverage, and personal care.

Asked about the impact on Dabur's beverage sales as a result of competition from the Campa Cola brand of soft drinks, Malhotra said that Dabur is launching products across different price points, in the INR 10, INR 20, INR 65 range, and will be coming up with 1 litre and 2 litre juice packs in coming days. "We will be increasing our value proposition to the consumers and also introducing INR 100 price points in the 1 litre category," he said.

Malhotra said that while the hair oils business can become a growth vector for the company in its global markets, the oral care portfolio can become the vector for growth in India. Dabur, which has been engaging dentists in India to increase sales, is targeting to reach out to a total of 100,000 dentists in the coming days to drive sales of its oral care portfolio.

"(In) the second half (of the ongoing financial year), we expect to grow back to normal. Mid-high single digit growth rate is what we think should be normal. This is subject to good winters," Malhotra said. Shares of Dabur India closed 2% higher at INR 546.65 on the National Stock Exchange. End

Edited by Ashish Shirke

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