FMCG stocks were trading lower on May 8 after Dabur Ltd posted flat revenue growth in March quarter and 8.5% YoY decline in Q4 profit.
At 10:17 am on May 8, Dabur shares were trading 1.5% lower at Rs 475 apiece. Nirmal Bang Institutional Equities, has downgraded the stock to 'hold' from 'buy' and has cut its target price to Rs 540 from Rs 570, said a news report.
Dabur India reported a decline in fourth-quarter profit on Wednesday, hurt by sluggish urban demand. It however expects a recovery in consumption in the coming months.
Dabur, known for its namesake honey, flagged a "challenging" demand environment in the three months ended March, but added that it expects demand to improve. "We expect consumer demand in India to recover progressively in the coming quarters, both in urban and rural markets," CEO Mohit Malhotra said. Dabur, known for its 'Real' fruit juices, gets more than half of its sales from urban markets.
Weak performance in the past few years has de-rated Dabur's stock, which now trades at 41x FY26 P/E vs 52-54x for peers like Godrej Consumer and Marico. While we continue to rate the shares 'Buy', we lower our target multiple to 45x to arrive at Rs 590 PT, said Jefferies.
Macquarie maintains 'neutral' rating on Dabur after Q4 results.
The sharp fall in Dabur's share price spilled over to other FMCG stocks as well, pushing the Nifty FMCG index down nearly 1% to become the worst performing sectoral index on NSE.
Tata Consumer shares were trading nearly 2% lower at Rs 1,124 apiece, while ITC shares were down over 1.5% to hover around Rs 425 apiece. Other FMCG stocks which recorded strong losses included Colgate Palmolive and Emami, which were down over 1%. Marico, Hindustan Unilever (HUL), Varun Beverages and Nestle India shares meanwhile were trading in the red with marginal losses.
Few FMCG stocks however bucked the trend to trade in the green. Radico Khaitan shares surged over 1.3% to trade at Rs 2,478 apiece. This comes a day after the company reported a 71% YoY rise in net profit to Rs 92 crore for the fourth quarter of the financial year 2025.
Godrej Consumer Products, United Breweries, Patanjali Foods and Britannia Industries shares were meanwhile trading in the green with marginal gains.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
