Dabur banks on good monsoon to accelerate growth
today May 15, 2019
The fast moving consumer goods brand Dabur hopes to see growth accelerated by a good monsoon season and expects that its growth rate will pick up in the second quarter of the current financial year.
Dabur India expects to see the slowdown during the fourth quarter of the previous financial year turn around soon thanks to a moderately positive monsoon prediction, the business’ CEO Sunil Duggal told ET Now in an interview. Duggar’s hopeful predictions are not without base as the Indian Meteorological Department has forecast a near-normal monsoon this year.
“If the monsoon is good, then we should see a turnaround in terms of the disposable incomes and consequent improvement in demand along with the additional stimulus,” said Duggal. “But if it does not, then demand this year would perhaps be on the moderate side. Even then, I am looking at the mid single digits growth as being the base-line growth and we should do much better than that.”
Duggal also noted that part of the reason for the slowdown in the fourth quarter of the 2019 financial year was due to liquidity issues. “Yes, there are some liquidity issues and that is one of the reasons why the fourth quarter was a fairly modest one,” said Duggal. “I do think that the liquidity issues will abate towards the end of this quarter when the money starts flowing into the consumption space, particularly in rural India, which has been the most compressed.”
Duggal also said that consumer demand has not increased as hoped during the current election season. “We all expected an upsurge in consumer demand consequent to the elections,” said Duggal. "Nothing of that sort has happened despite huge amount of money being spent -- Rs 50,000 crore is one estimate.”
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