Dabur India to increase prices by 4-5%
New Delhi: Dabur India Wednesday said it is looking to increase prices of its products by 4-5 percent in the ongoing quarter to offset to impact of depreciation in rupee, high inflation and increase in crude oil prices.
"We have pricing power available with us to protect our gross margins. We will look at price hike of 4-5 percent going forward," Dabur India Chief Executive Officer Sunil Duggal told market analysts.
Explaining the move to hike prices, he said: "There has been pressure on gross margins due to rupee depreciation, higher than expected crude oil prices and inflation."
When asked if the company may see any contraction demand due to price hike, Duggal said: "Consumers will absorb 4-5 percent increase in price. We don't think this hike will alienate the consumer. Also, we cannot just look at the acceptability from the consumers."
Dabur's range of products include hair care, oral care, skin care, home care and health supplements.
He, however, said Dabur is not looking at additional price increase for the juice segment in the immediate future.
"Juice is a urban product. So will we will have to absorb some impact of rupee depreciation," Duggal said, adding the company is monitoring the situation.
"Price hike will not fully mitigate impact of rupee depreciation but we don't want to take chances that may lead to erosion of consumer franchise," he added.
The juices segment grew by 18-19 percent in the quarter ended June 30 as against 24-25 percent in the corresponding quarter last year. Dabur's juices range include Real, Real Activ and Supa Fruits. Majority of fruits used for production of juices are imported.
The company is targeting a total advertising spend at 13-14 percent of total sales for the ongoing fiscal. In the first quarter it declined marginally to 15.5 percent in the as against 15.7 percent in the year-ago quarter.
Dabur's advertising spend in the quarter was Rs 254.2 crore as against Rs 229 crore in the same quarter last year.