Buy Dabur India; target of Rs 500: ICICI Direct

ICICI Direct is bullish on Dabur India has recommended buy rating on the stock with a target price of Rs 500 in its research report dated February 01, 2019.

Broker Research

February 28, 2019 / 15:40 IST

ICICI Direct's research report on Dabur India

Domestic business grew 14.8% mainly driven by 12.4% volume growth during the quarter. International business reported growth of 1% in constant currency terms impacted by underperformance of MENA markets and adverse currency movement Consumer care segment and foods segment increased 12.7% YoY and 7.6% YoY, respectively. Consumer care segment growth was led by hair oil growth of 23.6%, shampoo category growth of 25.2%, OTC & ethicals growth of 17.6%, skin care growth of 19.3% and oral care segment growth of 11.1% EBITDA margins declined 27 bps YoY to 20.3% as raw material costs to sales and employee expenses to sales increased 228 bps and 39 bps, respectively, while 133 bps & 108 bps improvement in marketing spend to sales and miscellaneous expenditure to sales mitigated a fall in EBITDA margins.

Outlook

We expect Dabur to generate revenue, earnings growth at 12.7%, 13% CAGR, respectively, in FY18-21E on the back of sustainable volume growth of 8% in FY18-21E. Hence, we maintain BUY rating on Dabur with revised target price of Rs 500.

For all recommendations report, click here