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Dabur India CFO Ankush JainBY:Anjana Das
With India’s retail inflation dropping to a 15-month low of 5.66% in March 2023 and the Reserve Bank of India (RBI) remaining optimistic that CPI inflation will average this fiscal, corporations are hopeful of overcoming any additional problem of worth rise with completely different methods.
“During the 2022-23 financial year, we faced high inflation, which was partly mitigated by judicious price and cost saving initiatives. Consumer promotions were offered to soften the impact of price hikes. We continued to increase the penetration and market share of our brands across categories in line with our ‘Ghar Ghar Dabur’ strategy.”, Dabur India CFO Ankush Jain informed ET CFO in an unique interplay.
Though retail inflation has proven indicators of softening, he says there are nonetheless areas of concern and it is too early to present any steerage on inflation for the present fiscal and a mixture of pricing and price administration workout routines are needed for tackling it.
“While inflationary pressures have started to wane towards the end of the year, pockets of stress remain. While it’s too early to give a guidance on how inflation will move during the course of the year, we will continue to mitigate the inflationary pressures through a mix of pricing and cost management exercise:, he said.
With the question in every CFO’s mind running if inflation remains a concern for them for this fiscal where dealing with higher raw materials prices and hedging the currency also become priority, Jain feels there are pressures on some commodities and rural demand has been affected due to the continued inflationary pressure.
“It stays a priority as we’re seeing Inflation in some commodities. That mentioned, the inflationary pressures have began to wane now. The continued inflation within the earlier 12 months had been placing strain on the purse strings of rural shoppers, which has, in flip , impacted gross sales of discretionary merchandise”, he said.
The CFO added that Dabur would undertake judicious price increases to mitigate the impact of inflation and would implement cost control measures as well.
“We will proceed to implement disciplined value management measures, enhance operational efficiencies and undertake considered worth will increase to mitigate the impression of inflation”, he pointed out.
Experts have said going forward, inflation is likely to moderate further due to the lag effects of an increase in interest rates and the continuation of favorable base effects. But there are upside risks due to adverse weather conditions like El Nino and heatwaves. And also there is imported inflation due to the tight oil market poses another risk.
The central bank targets a range of 2%-6% inflation. RBI has projected FY24 inflation at 5.2%.
The March consumer price index (CPI) inflation came a week after the RBI’s Monetary Policy Committee (MPC) maintained a surprise status quo on interest rates. But, Governor Shaktikanta Das said that “it’s a pause, not a pivot”. But RBI’s sudden pause came even as retail inflation has remained above the central bank’s mandated target range for 10 out of the 13 times.
However, India Meteorological Department’s forecast of normal monsoon rains in 2023 cheered policy makers as agricultural activities in the country are heavily dependent on seasonal rains that begin from June.
Dabur India’s full-year 2022-23 consolidated revenue crossed the Rs 11,000 crore mark to end the year at Rs 11,529.9 Crore. Its consolidated revenue for the fourth quarter of 2022-23 reported a 6.4% jump to Rs 2,677.8 Crore.
“Despite the near-term concerns around inflationary pressures, we plan to accelerate the growth momentum by continuing to invest in brand building, innovation, and capabilities that will drive future growth. Our journey to sustainable growth is well on track as we focus on building a stronger, more dynamic business, with a renewed sense of purpose”, Dabur India Ltd CEO Mohit Malhotra had mentioned earlier on the time saying the corporate’s This fall outcomes earlier this month.
Easing commodity costs & softening inflation prone to enhance This fall earnings of FMCG corporations although rural calls for stay laborious, in keeping with analysts.
With softening of main commodity costs, FMCG corporations have taken worth cuts and grammage will increase within the final six months. This is anticipated to end in a quantity uptick in Q4FY23. However, rural demand situations nonetheless stay comfortable in comparison with city demand, mentioned a report by ICICI Securities.
Dabur India tasks itself as India’s main science-based Ayurveda main.
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