Extending losses for a second day, Dabur India was trading 1.5 percent lower on May 5 morning after posting a weak set of numbers for the March quarter of the financial year 2022-23.
The homegrown FMCG major reported a 0.5 percent year-on-year decline in Q4 net profit at Rs 292.7 crore and domestic volume growth of 1 percent, which lagged expectations.
At 10.30 am, the stock was quoting at Rs 518.4 on the National Stock Exchange, 2.2 percent lower from the previous close. The stock has lost more than 7 percent in 2023 so far.
On the operating front, Dabur's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 9.6 percent YoY to Rs 410 crore. The operating margin declined to 15.3 percent from 18 percent in the year-ago period.
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CLSA, however, gave Dabur an “outperform” rating after the Q4 numbers were announced, with a target price of Rs 600 a share. The broking firm is optimistic about a rebound in the healthcare segment (ayurvedic products).
While the EBITDA margin contracted due to some one-offs (Badshah Masala acquisition), market share gain continued and rural demand is showing green shoots, it said.
Dabur India has become the number 2 player in the oral-care segment in the country, with a 15.8 percent market share, it said in a release to the media.
In FY23, the hair oils business climbed to its highest-ever market share at 17 percent on a 130 basis points gain, the FMCG major added.
Goldman Sachs has given a “buy” rating with a target price of Rs 600. Its optimism also stems from the company's market share gains.
Morgan Stanley believes Dabur “remains a strong play on rural recovery”. It has an “overweight” rating on the stock with a target of Rs 606 a share.
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