Nomura downgrades Dabur on expensive valuations but ups target

Moneycontrol Bureau Nomura has downgraded Dabur India to neutral from buy but increased target price to Rs 325 per share on expensive valuations. It says all positives seem to be priced in the stock.

However, the brokerage firm is still bullish on Dabur expecting that it will be a key beneficiary of the pick-up in consumption, given its strategic positioning, diversified product portfolio and distribution reach. Consumer preference for natural and ayurvedic products bodes well for the company, it adds.

Nomura expects Dabur to see revenue growth of 18 percent and 16 percent for FY17 and FY18 respectively, with EBITDA margins stabilising at 17.6 percent

"Traditionally, Dabur has traded at a 5 percent discount to the sector, but recently it has been trading in line. Therefore, we downgrade to Neutral and advise investors to switch to Emami among mid-caps and Hindustan Unilever in large caps," it says in a report.

At 10:45 hrs Dabur India was quoting at Rs 314.45, down Rs 4.00, or 1.26 percent on the BSE.Posted by Nasrin SultanaFollow @NasrinzStory