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Hold Dabur India; target of Rs 500: Emkay Global Financial

Emkay Global Financial recommended hold rating on Dabur India with a target price of Rs 500 in its research report dated July 30, 2020.

August 04, 2020 / 04:58 PM IST
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Emkay Global Financial's report on Dabur India

Dabur’s Q1 sales/PAT declined 13%/11% and came in marginally below expectations on a 22% fall in the international business. The domestic business performed better, with 8% sales decline and 4% PAT growth on strong growth in the Healthcare segment. Cost reduction was better than peers with a 14% decline in domestic overheads. This, along with a 22% fall in ad spends, led to EBITDA growth with a 260bps margin gain. Cost efficiencies and lower competitive spends continue to offer a positive margin outlook. Strong demand for healthcare products, a significant acceleration in new product launches (6% of sales in Q1) to meet current consumer needs and some normalization seen in its discretionary portfolio should drive a faster recovery in the coming quarters, in our view.


We like management’s aggressive efforts and initiatives to drive recovery and growth, but await a better entry point as current valuations at 43x FY22E EPS restrict upsides. Maintain Hold with a revised TP of Rs500 (Rs465 earlier), based on 40x Sept-22E EPS.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Aug 4, 2020 04:58 pm

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