Buy Dabur; target of Rs 327: Edelweiss

Edelweiss' research report onDabur

Dabur’s domestic business clocked overall growth of 0.1% YoY versus dip of 6.5% YoY in Q3FY17. While toothpaste, foods and health supplements jumped 9.0%, 7.9% and 5.0% YoY, respectively, growth in hair care, home care and OTC & ethicals dipped 4.0%, 6.5% and 4.0% YoY, respectively

Outlook

We expect recovery in volumes and premiumisation on back of new launches and ayurvedic focus. Uptick in rural spending and government’s stimulus remain key triggers.The stock is trading at 29.8x FY19E EPS. We maintain ‘BUY /SO’ with a target price of INR327

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