Dabur will outperform: Pramod Gubbi

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Dabur will outperform: Pramod Gubbi

Dabur India will continue to outperform, says Pramod Gubbi, Director Sales, Noble Group.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by Pramod Gubbi See what other Experts & Brokerages are saying about Dabur India See messages about Dabur India Dabur India BSE | NSE 10/02/12 Are Mutual Funds betting on Dabur India?

Dabur India will continue to outperform, says Pramod Gubbi , Director Sales, Noble Group.

Gubbi told CNBC-TV18, "Our top picks in the FMCG at the moment are Dabur and to a lesser extent Hindustan Unilever although we do not cover HUL. The thesis being be have backed the fast moving consumer goods (FMCG) sector both when it was extremely defensive sector. But also over the last six months when it hugely benefited from the input prices and also the support that you saw from the rural economy supporting volume growth north of 10%. Going forward we think volume growth will continue to be supported but at the same time the margin benefits will start unwinding both on the input cost as well as the extent of ad spend increases that you are likely to see. So from that perspective we think Dabur had the best combination of both benefit from input cost and reinvesting those cost savings into ad spends with a sustained volume growth."

He further added, "We think Dabur will continue to outperform. HUL is perhaps in similar boat where it has reinvested those input cost savings into ad spends. Godrej Consumer however we think its gross margins have always been volatile, it will be hard to call Godrej Consumer Products Ltd (GCPL) input cost measures. So our best picks would continue to be Dabur and HUL."