Second Quarter - Dabur India Limited

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Dabur India LimitedOctober 28, 2010activation and go now on the street and in the parlors and teach people the whole regime ofbleach. Once they do that we believe that we have converts and then people buy it from thestores, so we just need to do a lot more of that than what has been done in the past and it has tohappen perhaps lot more in the smaller towns and not be very urban centric, large town centric.Yasmin Shah:Sir I think of the growth of 11% in the entire portfolio, hair removal grew by 21% and bleacheswould have grown by how much?Gagan Ahluwalia: Bleach has grown by 11%, and HRC 21%.Yasmin Shah:My last question pertains to for the whole company basically, most of the companies are talkingof expanding their region in the rural areas are you also looking at a similar strategy and whatkind of distribution expansion you are looking at in the next two to three years?Sunil Duggal:The story has been played out many years in the past that rural expansion is integral part of ourstrategy. We have got last mile access to the level which we want. This last mile, we will keepexpanding in a calibrated manner as and when the rural economy grows and the purchasingpower in the rural pockets increases, so we are perhaps one of the best distributed companies inthe rural areas. We have an enormous amount of infrastructure and not just in terms of people,but in terms of infrastructure both supply chain and IT, so we are very well poised to capturegrowth in the rural market, which we believe is inevitable.Yasmin Shah:What would be your direct reach at this point in time?Sunil Duggal:Direct reach would be around million plus, around 1.1 million retail outlets, indirectly would bearound 3 million.Yasmin Shah:Thank you so much Sir and all the best.Percy Panthaki from HSBCPercy Panthaki:Just a couple of followups; one is on the healthcare products about a year and year-and-a-halfback you have said that, that will be our next leg of growth, so if you can just give someperspective on what is your thought process there and when can we expect launches? Secondquestion is, in your opinion what is the impact of monsoon and inflation, we have seen a goodmonsoon, but we have not necessarily seen any major pickup in consumer demand and again onthe inflation front do you think all in all for the topline is it a positive or negative because thefarmer income increases in the case of food inflation going up so do you think his purchasingpower therefore goes up?Sunil Duggal:I think to answer your first question on the healthcare piece, I think we had perhaps the best everyear in terms of healthcare portfolio performance particularly in CCD where growth has beenclose to 20%, I think this is result of our strategies and focus on healthcare paying of even thoughwe have not yet seen a lot of new products sit in the ground which we will in the third quarter,Page 24 of 25
Dabur India LimitedOctober 28, 2010but even our renewed emphasis on Chyawanprash and Hajmola and Pudin Hara, etc., and also onthe OTC portfolio has paid up very handsomely and I have also maintained that this is really seteasier pickings as compared to personal care and we believe that the healthcare portfolio in alllikelihood will grow ahead of personal care in the domestic context. Overall personal care maybe higher growth because of international. In terms of inflation and its impact on the topline Ithink the impact will be marginally positive because inflation will fuel perhaps higher thannormal price increases but I think everybody will be fairly circumspect in increasing prices. Ithink the first set of numbers which have come out in the second quarter reveal that people havenot really been very aggressive in price increases and the volume growth in some cases havebeen ahead of revenue growth which is very, very unusual. So it will have some positive impacton topline but not significantly.Percy Panthaki:And the monsoon impact?Sunil Duggal:I think the monsoon impact should be favorable by any set of logic we have not seen that yet, butthen it is still early days when the harvest, reaches the mandis and the money comes in the handsof farmers that is when it will be visible whether how much of this will flow into thenondiscretionary stuff like what we make. There is a hypothesis that where income levelsincrease very rapidly a lot of money is actually diverted to discretionary items which aretypically of higher value and there is perhaps a shrinkage in the share of wallet. So I would not bevery aggressive in saying that the outlook for FMCG is very, very positive, etc., by any stretch oflogic it should be benign but it all depends upon what happens in terms of share of wallet fornondiscretionary product.Percy Panthaki:Sunil my question on the healthcare thing was obviously you are continuing product is doingwell, but the question was you were actually earlier year or so back talking about a new sort ofleap into the healthcare space in terms of new categories, new products, etc., so we have not seenanything much there?Sunil Duggal:These products are just being put into the market.By middle of next month little after Diwali youwill find a slew of new product introductions which will validate what I said earlier.Percy Panthaki:Thanks a lot.Gagan Ahluwalia:Thank you everyone for joining this conference. If you want to access the transcript of the call itwill be available on our website shortly. Thank you and good evening.___________________________________________________________________________Page 25 of 25
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Second Quarter - Dabur India Limited

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