Buy Dabur India; target of Rs 122: R K Global

21921 Investors following Dabur India. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy Dabur India; target of Rs 122: R K Global

R K Global is bullish on Dabur India and has recommended buy rating on the stock with a target of Rs 122 in its February 2, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Hold Hind National Glass, target of Rs 175: Unicon Invest Buy Allahabad Bank; target Rs 220: Unicon Investment TVS Motor an underperformer: LKP ALSO READ See previous views by R K Global See what other Experts & Brokerages are saying about Dabur India See messages about Dabur India Dabur India BSE | NSE 01/06/12 Are Mutual Funds betting on Dabur India?

R K Global is bullish on Dabur India and has recommended buy rating on the stock with a target of Rs 122 in its February 2, 2012 research report.

"Dabur India's third quarter revenue rose ~16% YoY to Rs10,461 mn (~0.3% lower to our estimates of Rs10,491 mn), as good uptick in sales moderately offset expenses. Though, the company reported earnings close to our estimates but higher cost of raw materials in the reported period went up by ~25% YoY to Rs5,600 mn, while purchase of traded goods more than doubled to Rs1,955 mn & that saw a mere ~1% increase in its PAT to Rs1,463 mn. However, extraordinary losses of Rs448 mn saw the NPAT depleted by ~25%."

"The company's revenue came in tandem with our expectations, that saw a ~16% YoY growth. Domestic sales picked up with growth of ~16.2% during Q3FY'12. International Business (ex-acquisitions) reported growth of ~37.8% during the quarter. The ~21% growth, net of the acquired businesses, was driven by ~11% volume and ~10% by price. Going forward, we expect the pricing component will go down because the pace of price increase is going to dramatically come down. So, therefore, the volume growth should continue at the current pace. We do look forward to around ~10% volume growth happening (adjusted lower from earlier forecasted ~12%) even in the coming Qs. The company has acquired US-based Namaste Laboratories LLC after the year ago third quarter and thus the two quarter was not comparable. So, we think the revenue will see far better turn once the financials of the acquired companies are staged in."

"Margin contraction happened mainly due to raw material cost pressures. INR dep. has aggravated the pain; direct import of around Rs4,000 mn worth of raw materials. Advertisement spend was ~9.6% of sales in H1; but likely to move up considerably due to new launches. Dabur also stepped up its A&P spends by ~47% to Rs1,982 mn. The stock presently trades at a P/E & P/BVPS of ~19.4x and ~8.0x respectively of FY'13E EPS & BVPS. We re-iterate a strong BUY, re-affirming on our earlier TP of Rs122 (potential upside of ~22% from current levels for a 12M period), factored over a P/E of ~24.4x and P/BVPS of ~10.1x, using FY'13E EPS & BVPS of Rs5 & Rs12 respectively," says R K Global research report.          

Institutional holding more than 40% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment