Angel Broking neutral on Dabur India

Angel Broking has maintained a neutral rating on Dabur India (Dabur) in its January 30, 2013 research report. According to the research firm, company's top-line is expected to post an ~16.1% CAGR over FY2012–14E and the bottom-line to post a 21.6% CAGR, aided by top-line growth and margin expansion.

"For 3QFY2013, Dabur posted a 12.3% yoy growth in its consolidated top-line, which was in-line with our estimates. The company's net profit rose by 22.2% yoy to Rs 211cr aided by strong operational performance. The domestic consumer business posted a 14.3% yoy growth with volume growth coming in at 9.5%. While the Management maintained that rural markets and modern trade performed well, lower procurement by CSD impacted sales. In terms of category, Foods grew by 22.1% yoy while Home & Personal care grew by 15.7% yoy. The Hair care portfolio grew by 13.9%, while Shampoos grew by 29.6% yoy. The company's international business posted a growth of 9%, with the organic international business posting a growth of 22.4% yoy. The OPM stood at 16.5%, up 126bp yoy, led by a healthy expansion in gross margins in the international business due to reduction in commodity costs. The company's advertising and promotion expenditure as a percentage of sales rose by 77bp yoy to 14.4%. Finance costs fell by 57.5% yoy to Rs 7.8cr, due to favorable forex impact on a yoy basis. We expect Dabur's top-line to post an ~16.1% CAGR over FY2012–14E. The bottom-line is expected to post a 21.6% CAGR, aided by top-line growth and margin expansion. At the current market price, the stock is trading at 23.7x FY2014E EPS. We recommend Neutral on the stock," says Angel Broking research report. Shares held by Financial Institutions/Banks Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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