DABUR - Dabur India Ltd. Share Price

1. Question: My first question is on the GST impact. So, you are at a very favorable base last year and ideally you should have obviously grown much faster, which I think you may be doing the pre-GST impact. So, could you clarify how much was the GST volume impact in Q2? The market leader said 2%. And in October month, are you still facing reasonable disruption and you see normalcy coming in November, or already in mid-October the normalcy has come?

Answer: The GST impact is around Rs.100 crore, approximately 3% to 4% for us. The primary sales were affected post-GST announcement, leading to temporary volume impact. While we see inventory liquidation happening, the first 15 days of October still exhibit disruptions. However, I believe the long-term effects of GST will significantly boost volume growth as more money will flow into consumers' hands.

2. Question: A related question in terms of the GST cut. Which categories do you expect more benefit in terms of volume uptake? And in terms of lower unit packs, obviously, there will be grammage increase there. So, if you could tell us one ballpark number in terms of the GST rate cut portfolio, how much is the LUP where the grammage increase will happen?

Answer: LUP contributes about 27% of our overall business with expected grammage increases. Categories likely to benefit from this include oral care, shampoos, and hair oil. Our Ayurvedic proprietary branded medicine will also gain from reduced rates. This pricing adjustment will increase brand preference, especially among consumers shifting from unbranded to branded goods.

3. Question: Specific question here is with the GST rate cut which has benefited you, how does this help in fighting say Campa Cola? Second is Campa Cola's incentive dealer incentives are almost double of Cola players. Would you need to change that, or already you have done some action in terms of the dealer incentives?

Answer: The GST reduction has made our juices more affordable relative to Campa Cola's aerated beverages, which should provide a positive impact on our beverage portfolio. We have introduced some tweaks to dealer incentives post-GST to help bridge the gap, and we'll continue to adjust as necessary to remain competitive.

4. Question: Toothpaste, you have done quite well last few quarters. The market leader has not. So, I wanted to understand specific to toothpaste, how much is LUP?

Answer: The herbal toothpaste category is outpacing the non-herbal segment, with growth rates indicating a strong consumer shift. Our overall oral care has grown, with Red toothpaste at 16% and Meswak at 25%. We've also gained 60 basis points in market share, and our LUP adjustments are driving consumer interest, offering better value to customers.

5. Question: So, if winter is expected to be good. Would that be sitting in the 2Q sales, or can one expect the winter loading to happen in 3Q, 4Q, and better sales to be seen in Quarter 3 and Quarter 4?

Answer: Winter loading was delayed due to the GST transition, but we are currently loading. If winter is harsh, we anticipate benefiting, as about a third of our portfolio is winter-centric. Thus, we expect third-quarter sales to improve significantly if the season supports it.

6. Question: Can you comment on the growth potential from the rural market perspective and how you are aligning your portfolio with youth?

Answer: Rural markets are crucial for us, currently showing 8.5% growth compared to 3% in urban areas. We're leveraging lower unit packs and enhancing distribution to tap into this segment. Simultaneously, we are innovating premium offerings to attract the urban youth, focusing on products like Chyawanprash gummies and other contemporary formats.

7. Question: Regarding Dabur Ventures, could you share what categories you will focus on and how much capital allocation there is?

Answer: Dabur Ventures will focus on digital-first, future-oriented brands with a Rs.500 crore allocation over the next few years. We're primarily interested in home and personal care, health care, wellness foods, and beverages, ensuring these categories align with our core business strategy without diversifying beyond our existing scope.