Buy Dabur India; target of Rs 640: Sharekhan

Buy

Sharekhan's research report on Dabur India

Dabur posted muted performance in Q1FY2024 due to sales decline in beverage category, moderate growth in health supplements and skin care category, while higher ad spends kept OPM flat. Revenue and PAT grew 11% and 5%, y-o-y, respectively. Rural volumes grew by 7.5%; Recovery in the rural demand and stable demand in the urban market coupled with market share gains in key categories would help Dabur achieve mid-to-high single digit volume growth in the coming quarters. Management eyes an OPM of 19-20%. Raw material cost savings will be utilised for higher investment behind brands.

Outlook

Stock has underperformed broader indices and trades at 43x/35x its FY2024E/25E EPS. We maintain a Buy on the stock with a revised price target of Rs. 640.

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Dabur India - 04 -08 - 2023 - khan