Accumulate Dabur India; target of Rs 377: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dabur India

Dabur has shown 7.7% domestic volume growth on a low base led by market share gains in most segments. Dabur is aiming for 8-10% volume growth in 1H19 which can increase to double digit in 2H19 depending upon monsoons. Gross margins are unlikely to expand, however better profitability in IBD and operating leverage in domestic business will provide moderate margin expansion. Dabur expects GST e-way bill led trade disruptions in 1Q however overall demand scenario looks optimistic.

Outlook

We estimate 16% PAT CAGR over FY18-20. We value Dabur at 35xFY20 EPS and arrive at target price of Rs377. We expect back ended returns post 32% upmove in last 1 year. Maintain "Accumulate".

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