Angel Broking neutral on Dabur India

Angel Broking has maintained neutral rating on Dabur India in its October 31, 2012 research report. The research firm expects Dabur’s top-line to post a ~15.9% CAGR over FY2012–14E. The bottom-line is expected to post an 18.9% CAGR, aided by topline growth and margin expansion.

“Dabur India (Dabur) posted a 20.6% yoy growth in its top-line to Rs1,523cr, driven by a mix of volume and value growth for 2QFY2013. The company’s net profit rose by 16.4% to Rs202cr aided by a reasonably strong operational performance.”

“Dabur posted a 20.6% yoy growth in net sales to Rs1,523cr, which was in line with our estimates. The domestic consumer business reported a growth of 15.3%, driven by a mix of volume and price increases, with the volume growth coming in at around 9%. During the quarter, the domestic sales were affected due to lower procurement by canteen sales division (CSD) due to budget rationalization. The international business grew by 24.8% yoy during the quarter. The growth in the international business was aided by translation gains due to INR depreciation. On a constant currency terms international business rose by 16% yoy. Although the gross margin improved by 56bp yoy due to the cooling of raw material prices, the company’s advertising expenses went up by 175bp on a yoy basis, resulting in the OPM contracting by 137bp.”

We expect Dabur’s top-line to post a ~15.9% CAGR over FY2012–14E. The bottom-line is expected to post an 18.9% CAGR, aided by topline growth and margin expansion. At the current market price, the stock is trading at 23.8x FY2014E EPS. We recommend neutral on the stock,” says Angel Broking research report.

FIIs holding more than 30% in Indian cos

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