Buy Dabur India; target Rs 198: Firstcall Research

Firstcall Research report on Dabur India

"Dabur India has achieved a turnover of Rs. 17542.10 million for the 2nd quarter of the current year 2013-14 as against Rs. 15275.20 millions in the corresponding quarter of the previous year. The company has reported an EBITDA of Rs. 3518.20 millions and a net profit of Rs. 2497.40 million against Rs. 2023.70 million reported respectively in the corresponding quarter of the previous year. The company has reported an EPS of Rs. 1.43 for the 2nd quarter as against an EPS of Rs. 1.16 in the corresponding quarter of the previous year."

"At the current market price of Rs. 177.05, the stock P/E ratio is at 34.87 x FY14E and 31.05 x FY15E respectively. Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.5.08 and Rs.5.70 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 13 percent and 16 percent over 2012 to 2015E respectively. On the basis of EV/EBITDA, the stock trades at 25.91 x for FY14E and 23.37 x for FY15E. Price to Book Value of the stock is expected to be at 11.67 x and 9.53 x respectively for FY14E and FY15E."

"Dabur maintained its strong growth momentum and continues to register sales growth ahead of the market in several key categories. With rural expansion programme, The Company has laid the foundation for strong and profitable growth in the future and this initiative started yielding positive results and is seeing demand from rural India outpacing the urban markets. The 2nd quarter saw Dabur launch a host of new products and variants across geographies, all of which have received good response. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 198 for Medium to Long term investment," says Firstcall Research report.

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