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Dabur gains 2% post Q3 results, Credit Suisse raises target price

Credit Suisse has maintained an outperform rating on the stock and has raised target to Rs 540 from Rs 520 per share.

January 31, 2020 / 10:45 AM IST
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Share price of consumer products manufacturer Dabur India added 2 percent in the morning trade on January 31 after posting in-line numbers for the quarter ended December 2019 (Q3FY20) with consolidated net profit rising 8.9 percent to Rs 400 crore against the CNBC-TV18 estimates of Rs 400 crore.

The company had reported a profit of Rs 367.2 crore in the same quarter last fiscal. Revenue of the company was up 7 percent at Rs 2,353 crore against Rs 2,199.2 crore, YoY.

Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 10.7 percent at Rs 493 crore versus Rs 445.4 crore and the margin was at 21 percent versus 20.3 percent.

With the company meeting street estimates, global research firm Credit Suisse has maintained an outperform rating on the stock and has raised target to Rs 540 from Rs 520 per share. Dabur is outperforming its peers in a very tough environment and cut earnings marginally (0.6 percent) on higher-than-expected advertisement spends, it said.

Credit Suisse is of the view that FY21 growth for juice business is pinned on successful ramp-up in fruit drinks.


Another research firm Morgan Stanley is of the view that earnings was a beat but near-term outlook is challenging. The firm continues to believe that the company has one of the best product portfolios.

Rich valuations and weak near-term consumer demand trends has kept the research firm equal weight on the stock.

Commenting on the Q3 results, Dabur India Ltd Chief Executive Officer Mr. Mohit Malhotra said, "While the global macroeconomic environment continues to be challenging and competitive intensity remains high, we have successfully tapped the growth opportunities to deliver a strong performance during the quarter. Our focus on strengthening our core healthcare portfolio with heavy investments behind our Power Brands, coupled with investment in expanding our rural footprint and enhancing our go-to-market approach, continues to serve us well. This has enabled us to grow ahead of categories and gain market share across our portfolio."

The stock price gained over 22 percent in the last 9 months and was quoting at Rs 486.95, up Rs 8.80, or 1.84 percent. It has touched an intraday high of Rs 491.50 and an intraday low of Rs 480.60.
Moneycontrol News
first published: Jan 31, 2020 10:45 am
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