Hold Dabur; target of Rs 260:Axis securities

Axis securities's research report on DaburBelow estimates: Consolidated net sales, EBITDA and adj. PAT grew 2%, 8% and 13% YoY vs. consensus est. of 7%, 12% and 14%. Domestic FMCG declined2.5%, as volumes declined2.5%. Nepal disruption affected supply in juices leading to sales decline of 24% in foods. International reportedconstant currency (CC) growth of 14.8%, with ~35% CC growth in north America. Organic international growth was 10.7%, on the back of good growth in MENA. Better sales mix and benign input costs aided 416 bps YoY increase in gross margin. EBITDA margin expansion was limited to 86 bps due to higher A&P. We estimate consolidated sales CAGR of 13% (9% volume and 4% pricing) and EPS CAGR of 12% over FY16-20.Maintain HOLDwith revised TP of Rs260 (based on 29x forward P/E).

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