Buy Dabur India; target of Rs 675: Sharekhan

Sharekhan's research report on Dabur India

Revenue grew by 8.1% (volume growth of 5%) on a high base of 32% growth in Q1FY2022; three-year CAGR came in at 10.2%. PAT stood flat at Rs. 441.1 crore. Gross margins and OPM were hit by sustained input cost inflation and fell by 224 bps and 188 bps y-o-y, respectively. The management aims to maintain OPM on y-o-y basis through cost efficiencies and efficient management of advertisement spends along with softening of input cost inflation. Revenue and PAT are expected to grow at 14% and 19% CAGR during FY2022-24 backed by sustained market share gains, expansion of distribution network, investments on power brands, new launches and cost-saving initiatives.

Outlook

Stock trades at 48.9x/39.1x its FY2023E/24E EPS. We maintain a Buy on the stock with a revised price target of Rs. 675.

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Dabur India - 050822 - khan