Buy Dabur; target of Rs 705 : Motilal Oswal

Motilal Oswal's research report on Dabur

Our investment thesis on DABUR is premised on the following key attributes: a) highest topline growth visibility among peers, b) consistent market share gains across categories, and c) potential to record even faster earnings growth post-completion of its ongoing investment phase. The key catalysts that underpin a sustained double-digit topline growth for DABUR include: a) an impressive performance in the Ayurvedic healthcare space, b) an encouraging output from the Power Brand strategy, c) an improving outlook for the F&B business, and d) a host of new launches by the company. In fact, DABUR is on track to deliver a double-digit sales growth in FY22E, a feat achieved in two out of three years since the then new CEO took over. The recent stock price correction of ~15% from its peak offers an attractive entry point in our opinion with the stock now trading at 39x FY24E P/E, a discount of 15%/20% to its historical three/five-year averages, respectively. - DABUR is among our top two picks in the Staples space along with Godrej Consumer (GCPL).

Outlook

We reiterate our BUY rating on DABUR with a TP of INR705, implying 29% potential upside.

More Info

At 15:42 hrs Dabur India was quoting at Rs 550.10, down Rs 3.35, or 0.61 percent.

It has touched an intraday high of Rs 551.55 and an intraday low of Rs 543.35.

It was trading with volumes of 29,088 shares, compared to its thirty day average of 55,563 shares, a decrease of -47.65 percent.

In the previous trading session, the share closed up 0.94 percent or Rs 5.15 at Rs 553.45.

The share touched its 52-week high Rs 658.75 and 52-week low Rs 483.00 on 24 September, 2021 and 24 February, 2021, respectively.

Currently, it is trading 16.49 percent below its 52-week high and 13.89 percent above its 52-week low.

Market capitalisation stands at Rs 97,249.79 crore.

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