We recently downgraded Dabur to REDUCE, given its weak execution. Dabur, in its Q4FY25 business update, noted a mid-single-digit decline in the domestic business, which is a key business concern in our view. While Dabur has been focusing on share gains across most segments, we see a need for aligning with the evolving consumption trend, for topline recovery. Consolidated revenue is likely to be flat in Q4FY25, while margin is likely to see compression of ~150- 175bps YoY (we build in 170bps contraction), which will drive a low doubledigit decline. Factoring in the business stress, we cut our earnings expectations by 4-5% over FY26-27E – around 8-9% lower than consensus’s.
OutlookWe now value Dabur at 37x P/E (20% discount to its last 5YF average) vs 40x earlier. We cut our TP (Mar-26E) for Dabur India by 10% to Rs 450 from Rs500 earlier.
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