Hold Dabur India; target of Rs 456: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dabur India

We increase our EPS estimate of FY20 and FY21 by 1.8% and 3.3% respectively given optimistic domestic demand outlook backed by 1) 12.4% domestic volume growth on a high base (13% in 3QFY18) and continued momentum in January sales as well 2) expected pick up in rural sales post consumption led interim budget and 3) softening input costs pressures and 1.5-2% price increase. Dabur has maintained its double digit volume growth for FY19. Currency volatility has impacted IBD and we expect it to remain muted in the coming quarters as well.

Outlook

We estimate 12.4% sales and 15.3% PAT CAGR over FY19-21 and value the stock at 40xDec20 EPS to arrive at target price of Rs456 (Rs427 earlier). Retain "Hold".