Buy Dabur India: target of Rs 645: Sharekhan

Sharekhan's research report on Dabur India

Dabur India reported y-o-y revenue growth of 7.7% (with muted volume growth of 2%) in Q4FY2022 on a high base of Q4FY2021 (25% growth); two-year CAGR stood at 16%. Input cost inflation dragged down OPM by 92 bps to 18% and it would continue to put pressure on margins. Management will focus on cost efficiencies and stringently manage advertisement spends to maintain OPM y-o-y. Sustained market share gains, expansion of distribution network (especially in rural market), investments on power brands and new launches would help company to achieve double-digit revenue growth in the medium to long term.

Outlook

The stock trades at 43.9x/35.9x its FY023/24E EPS. We maintain a Buy on the stock with a revised price target of Rs. 645.