Buy Dabur India; target of Rs 415: ICICI Direct
ICICI Direct is bullish on Dabur India has recommended Buy rating on the stock with a target price of Rs 415 in its research report dated May 02, 2018.
May 14, 2018 / 07:17 PM IST
ICICI Direct's research report on Dabur India
Dabur reported 6.2% YoY growth in consolidated net sales of Rs 2,032.9 crore (I-direct estimate:Rs 2,073.6 crore; on comparable basis, consolidated net sales grew by 11.1%). The company reported a domestic revenue growth of 10% led by 7.7% volume growth during the quarter. International business reported growth of 16.8% in constant currency terms. The consumer care segments grew by 8.2% YoY; however foods segment witnessed de-growth of 1.5% YoY. The strong consumer care growth was led by oral care growth of 11%, shampoos category growth of 31% and healthcare segment growth of 11.2%. Raw material and other overheads were lower by 167 bps and 40 bps YoY as percentage to sales resulting in 206 bps improvement in operating margins to 23.9%. Led by strong growth in operating profit, PAT witnessed a growth of 19.0% to Rs 397.2 crore (I-direct estimate:Rs 371.4 crore). We remain positive on the revenue growth prospects of the company considering revival in rural demand on the back of normal monsoon this year and expected aggressive push by government to improve rural income levels.
Dabur was positively impacted due to input tax credit in promotional expenses, which led to a strong margin expansion. On the back of recovery in international business witnessed in Q4FY18 and continued growth momentum in domestic business, we expect strong volumes in FY19E. Thus, we expect DIL to generate revenue and earnings growth at 13.2% and 15.5% CAGR, respectively, in FY18-20E. Hence, we maintain our Buy recommendation with a revised target price of Rs 415/share.
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