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Buy Dabur India, target Rs 425: Equity99

"Dabur has efficiently managed the risks and challenges to deliver steady growth and report a steady margin performance. We have a buy with target of Rs 425 per share," says Sumit Bilgaiyan, Founder of Equity99.

May 02, 2018 / 11:32 AM IST
Dabur India | CRISIL reaffirmed its credit rating at AAA/Stable for long term bank facilities. (Image: Moneycontrol)

Dabur India | CRISIL reaffirmed its credit rating at AAA/Stable for long term bank facilities. (Image: Moneycontrol)


Sumit Bilgaiyan

Dabur India has reported a 19 percent increase in Q4FY18 net profit as volumes in domestic packaged goods business grew 7.7 percent. It’s revenue for the quarter rose to 6.2 percent from a year ago.

However, the comparable growth was around 11.1 percent. Dabur has  efficiently managed the risks and challenges to deliver steady growth and

report a steady margin performance.

During Q4FY18, Dabur’s operating margin touched a record 27.2 percent. It’s shampoo business reported a 31  percent growth in Q4FY18, followed by home at 24 percent, health supplements and oral care at 14 percent, health care at 11 percent and hair oil business at 9 percent.

Rural demand has been growing at faster pace. Favourable monsoons and a likely stimulus by the Modi-government as part of its overall thrust on rural growth is expected to further boost rural demand.

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Dabur’s international business grew at 16.8 percent, in constant currency terms, during Q4FY18. Market share gain for Oral Care, Hair Oil and Honey is encouraging. Management is aiming for further growth in market share in the coming quarters.

International business is also expected to bounce back, with healthy cc growth in Egypt, Turkey and Nigeria and lower forex impact. We are recommending a buy with target of Rs 425.

Disclaimer: The author is Founder of Equity99. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: May 2, 2018 11:32 am

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