Buy Dabur India: target of Rs 675: Sharekhan

Sharekhan's research report on Dabur India

Dabur’s Q4FY2021 performance is expected to be strong with volume growth of 30%+; stable operating margin and 20%+ PAT growth. Second wave of surge in COVID-19 cases has pushed the demand for health and hygiene products. Dabur will be one of the key beneficiaries of it and its healthcare portfolio will score good run. The stock is currently trading at 40.5x its FY2023E EPS, which is at a discount to its last three years’ average multiple of 47x, thus providing a good opportunity to enter in quality stocks.

Outlook

We maintain our Buy recommendation on Dabur India Limited (Dabur) with a revised PT of Rs. 675. Strong brand portfolio, double-digit earnings growth visibility (~18% CAGR over FY2020-FY2023), and decent valuation makes it a strong case for investment.

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