Urban sales are on recovery track post-Covid

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New Delhi: Urban sales are recovering and trending better than rural sales, which are presently ‘very resilient’ after the second wave of COVID-19 pandemic, and Dabur India is continuously investing in rural infrastructure as it is ‘hopeful on the macro-economics’, a top company official said.

Not withstanding the uptick in sales, urban markets are still not in line with pre-COVID growth and are on a recovery path helped by the comeback of modern trade channels, e-commerce sales improvement of mobility as restrictions are eased out, according to Dabur In- dia CEO Mohit Malhotra.

The sales network of Dabur India covers around 83,500 villages and the company aims to cover 90,000 villages directly by next year. The company, however, keeps trending well going forward as compared to urban at least for us, and we are also putting up infrastructure improvement in place,” Malhotra said in an investors’ conference call last week.

In the long term, going forward, ‘rural will be resilient’, which is growing almost at around 12 percent coming on the back of 26 percent base.

“So rural is trending well. Urban growth is in the range of around 9 percent coming on the back of 18 percent. base,” Malhotra said.

“Rural is trending well for us and the annual monsoon has been great, the harvest has been fantastic, MSPs have not been rolled out, MGNREGA arrangement is good, unemployment rates in rural areas are kind of lowest at this time,” Malhotra added.

“In my view, rural will be concerned about inflationary pressures on raw materials, which is still continuing in the October-December quarter.

“We thought that there will be little softening of inflation, which will happen in Q3, but the projection that we are getting ting for Q3 is that inflation is only picking up from there, and we are not seeing any signs of softening happening in inflation,” he said.

To offset that impact of inflation and continued sustained pressure, the company has taken price increases in its several categories and has taken some cost-saving measures also.

However, it would not go for any “aggressive price increases” as demand is also recovering.

“Also, the market is pretty competitive here. That is what we are waiting and watching.” Malhotra said.

Source- PTI