Dabur India reports 5.4% rise in Q1 profit on stronger demand

By VarunVyas Hebbalalu

BENGALURU (Reuters) -Dabur India, which sells Vatika Shampoo and Honitus cough syrup brands, reported a rise in first-quarter profit on Thursday as easing inflation propped demand.

The company's consolidated net profit rose 5.4% year-on-year to 4.64 billion rupees ($56.1 million) in the quarter ended June 30.

India's annual retail inflation fell in April and eased further to a more than two-year low in May, before rising slightly in June.

The moderation during the quarter led to increased discretionary spending by consumers.

"With inflation softening, we have seen our rural growth bounce back to high single digits after three quarters," Chief Executive Mohit Malhotra said in a statement, adding that rural demand lags the urban segment.

The Dabur Honey and Chyawanprash maker's revenue in April-June rose nearly 11% to 31.30 billion rupees, led largely by growth in its consumer care business.

The company's consumer care business accounts for more than three-fourths of its revenue.

Growth in categories outside food and beverage, such as hair oils and shampoo, is better than the company's rivals that have reported so far, said Shirish Pardeshi, Centrum research analyst.

He added that Dabur's overall revenue was impacted by unseasonal rains that hit the company's juice business and slow recovery in the rural economy.

Rival Marico reported a fall in June-quarter revenue on sluggish rural demand, even as profit rose on a drop in input costs. Top consumer company Hindustan Unilever posted a smaller-than-expected rise in profit.

Other consumer goods companies Nestle India and Colgate-Palmolive (India) posted a jump in profit.

Dabur's shares closed down 1.87% after the results.

($1 = 82.7900 Indian rupees)

(Reporting by Varun Vyas in Bengaluru; Editing by Sohini Goswami)