Second Quarter - Dabur India Limited

Dabur India Limited Q2/H1Earnings Conference CallOctober 31 st , 2008but everyday products which are priced at popular price points there is no visible sign ofany consumer, lack of consumer demand, whether it is urban or rural, like I say rural seemsto have actually come a little bit better, urban seems to be fairly steady but near term we dosee some pressures because modern trade off take has come down but we believe thetraditional trade should take up the slack.Aniruddha Joshi:Okay, so we do not see major trade going forward.Sunil Duggal:I do not think so, but having said that you never know how things will fan out, it is theeconomic situation, whether it will gravitate towards lower off take for everydayconsumables, I personally think not but then I could be wrong.Aniruddha Joshi:Okay fine, very lastly, you know almost all the raw materials prices have started correcting,so do you see we continue taking price hikes.Sunil Duggal:I do not expect any price hikes in the next six months.Aniruddha Joshi:No price hike in the next six months.Sunil Duggal:I do not expect so, may be there will be the odd product which has got a spike up and it is inmaterial cost but that would be an exception, I do not have any visibility of that, but I do notsee any price shrinkage either. I think we will be able to sit on the current prices..Aniruddha Joshi:Sir, but we are the only company who has taken least price hikes, be it Lever or Nestle.Sunil Duggal:That is right. I think we and Colgate, I think Colgate has taken a very moderate price hike.Aniruddha Joshi:Yes, we and Colgate are the only two ones, right. So, despite that our volume growth is notvery, very strong.Sunil Duggal:It comes around 11-12%, 12% volume growth is perhaps the highest, which you have seenin FMCG this year.Aniruddha Joshi:Like others have also been also maintaining somewhere around 8 to 10% volume growthdespite taking huge price hikes, so we have not taken price hikes, but still our volumegrowth is not substantially higher, so any reason, means are we facing problems to increaseprices?Sunil Duggal:No I think if you look at our gross margins they have been practically intact, so we have notseen erosion because of any inflation. I think the volume growth of 10-12% for coredomestic business is not the highest we have ever seen, so you might argue that with lowerprices we should have seen a higher volume growth but I think this is also fairly decentperformance. We have been able to manage margins despite moderate price increases,