Accumulate Dabur India; target of Rs 589: Arihant Capital

Arihant Capital 's research report on Dabur India

Dabur India Limited ( Dabur) earnings surprised the market with double digit volume growth in in Q2FY21 . Dabur’s domestic business grew 16.8% YoY, much higher than the anticipated mid-single digit growth. Profit for the quarter grew by 19.9%YoY/+41.6% QoQ to Rs 483 Cr above our estimates of Rs 384 cr on the back of growth in topline, higher other Income and lower finance cost during Q2FY21. Consolidated revenue stood at Rs 2516 cr , above our estimates Rs2,274 cr registering a growth of 13.7%YoY/+27.1%QoQ mainly led by healthy growth in healthcare business.

Outlook

Reported EBITDA grew by 16.6%YoY/+37%QoQ to Rs 570 Cr, above our estimate of Rs 454 Cr, while EBITDA margin expanded by 55bps YoY/164bps QoQ. Higher material cost and other expenses including advertisement expenses restricted margin expansion on YoY basis in Q2FY21.