Dabur remains one of our preferred picks in the Consumer Goods sector, given its diversified portfolio and better execution. The company’s thrust on rural remains firm, with distribution expansion continuing to see better growth. Dabur, per its strategy, has been expanding TAM across brands with category extensions that are backed well by distribution and marketing.
OutlookWe maintain BUY on Dabur, with Jun-25E TP of Rs700/sh, on 46x P/E. We see sales/earnings CAGR of 10%/15% over FY24-27E, respectively. Q1 commentary looks muted: topline is expected to grow 6%, with mid-single-digit volume growth in domestic operations. Gross margin is expected to expand by 90bps YoY (to 47.5%). EBITDA expansion is likely to be limited at 20bps YoY (to 19.5%), given sustained thrust on building back A&P (expect 18% rise in spends).
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