Buy Dabur; target of Rs 640: Motilal Oswal

Motilal Oswal is bullish on Dabur has recommended buy rating on the stock with a target price of Rs 640 in its research report dated January 30, 2021.

Broker Research

February 03, 2021 / 17:23 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Dabur

Following up on volume growth of 17% in 2QFY21 (third-highest in 50 quarters for the company), DABUR did even better with 18% volume growth in 3QFY21 – despite a more challenging base. This indicates the efforts undertaken under the guidance of the new CEO over the past year and a half have revitalized volume and topline growth momentum. Not only was volume growth far superior against historical levels, but the company also saw a second consecutive quarter of ‘best among staples peers’ volumes. n Importantly, growth is also turning broad-based, with 16% growth in HPC, 13% growth in the international business (with the MENA region also doing well now), and return to growth in the Foods business. This means the company’s significant dependence on the Healthcare business to drive topline growth is reducing. n Led by a host of initiatives highlighted under our CEO meet note and AR note, we believe the topline growth momentum may be sustainable in subsequent years. This would lead to continued improvement in the growth trajectory (12.6% CAGR over FY20–23E v/s a paltry 2.1% over FY15–20), with the earnings CAGR likely to be 15.5% over FY20–23E (more than double the CAGR in the preceding five years). Given the longer term potential of the business, valuations at 45.4x FY22E and 38.8x FY23E do not appear challenging. Maintain BUY.

Outlook

Given the longer term potential of the business, valuations at 45.4x FY22E and 38.8x FY23E do not appear challenging. Maintain Buy, with TP of INR640 (50x Dec'22 EPS).

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