Hold Dabur India; target of Rs 501: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dabur India

Dabur reported in-line numbers with mid-single digit volume decline led by seasonal delays, rising food inflation & urban demand weakness. We note that categories like Oral care, haircare, Chawyanprash and Honey have shown degrowth during the quarter. Dabur is looking at corrective steps in Beverages, introducing modern format products in healthcare, innovations in Hair oils & Chawyanprash and filling product gaps in oral care. However, we believe that the recovery would be gradual given heightened competitive intensity in some of these segments. We estimate 9.4% Sales CAGR & 9.3% PAT CAGR over FY25- 27 on a low base affected by slowdown and inventory destocking.

Outlook

Dabur currently trades at 40.5xFY27 EPS, which is at 3% discount to LTA of 42.5x but the stock lacks any visible triggers in the near term. We value the stock at 42xFY27 EPS and assign a target price of Rs501 (Rs.494 earlier). Retain Hold.

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