Buy Dabur India: target of Rs 675: Sharekhan

Sharekhan is bullish on Dabur India has recommended buy rating on the stock with a target price of Rs 675 in its research report dated May 06, 2021.

Broker Research

June 10, 2021 / 11:14 IST

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

Sharekhan's research report on Dabur India

Dabur India Limited’s (Dabur) domestic volume growth stood at 25% in Q4FY2021, lower than our as well street’s expectation of 30%-35%. OPM stood flat at 18.9%; PAT grew by 27% to Rs. 377.9 crore (lower than street expectation of Rs. 425 crore). CRS implementation resulted in inventory correction due to lesser pre-season stocking up with distributors, leading to lower revenue by ~Rs. 100 crore-120 crore. Q4 is seasonally a soft quarter for winter-related healthcare products (including Chyawanprash), leading to lower growth. Supply-led disruption might affect near-term performance. Health supplements and ethical regaining momentum, discretionary categories to see moderation.

Outlook

We have reduced our estimates for FY2022 by 7%, while we have fine-tuned them for FY2023. We maintain Buy with a PT of Rs. 675.

For all recommendations report, click here