Buy Dabur India; target of Rs 660: Emkay Global Financial

BUY

Emkay Global Financial's research report on Dabur India

Amid a muted demand setting, Dabur’s thrust on enhancing its distribution has been rewarding, with 95% of the portfolio seeing market share gains and better growth in Rural (~8% vs ~4% growth in Urban). Management sees high-single to low-double-digit revenue growth for FY25, backed by mid-to-high singledigit volume growth. EBITDA margin is likely to see expansion to 20% in FY25E from 19.4% in FY24, given the raw material scenario remaining favorable as well as better mix and cost efficiencies. Q4 topline growth at 5% was in-line, and better than expected margin aided the EBITDA (+14% YoY)/earnings (+16% YoY) beat of 6%/7%.

Outlook

We maintain FY24-26E revenue/earnings CAGR at 10%/16%; retain BUY, with Mar-25E TP of Rs660, on 46x P/E. Dabur stays our preferred sector pick and a play on Rural demand recovery.

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Dabur India - 03052024 - emkay