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Dabur says rural consumption to lead growth; no plan to drop ad spends
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Dabur says rural consumption to lead growth; no plan to drop ad spends
Jul 31, 2018 8:50 AM

After fast moving consumer goods (FMCG) business posted 21 percent volume growth in Q1, consumer products maker, Dabur India, on Tuesday said that rural consumption would lead growth more than urban areas and there is no intention to drop media spends.

In an interview to CNBC-TV18, Sunil Duggal, chief executive officer, said the focus on volume and revenue growth will continue and good margins will be an outcome of that.

The volume growth has come from across all products. All the categories have grown double-digits, although some have growth far more, Duggal said, "Not sure if 21 percent volume growth is sustainable but the company will surely see double-digit growth for the year."

Duggal said Dabur was at 16 percent on volume market share in toothpaste, but in honey it's not possible to ascertain the share because there is no reliable data available.

However, in the organised sector, Dabur estimate the market share in honey is around 50-60 percent, but cannot be totally sure about that, he added.

With regards to margins, Duggal said the India business has done very well, "The India operating margins have grown by 35 percent on the back of 36 percent increase in media spends, which shows lot of resilience on the margin front."

According to Duggal, media spends has resulted in high levels of volume growth and Dabur want the business to grow like that – spend more, earn more.

With regards to international business, he said, "There is an inherent volatility because of various issues like economic issues, currency issue, political etc. So there is lot of churn happening there and if there are more tailwinds than headwinds, then they will grow in strong double-digits, but if not then, growth would be in single-digits."

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