July 29, 2016 / 13:37 IST
Religare's research report on Dabur India
Dabur’s Q1FY17 consolidated sales/EBITDA/adj. PAT grew 1.1%/8.7%/11.8% YoY with domestic volumes up 4% YoY (RCMe 7%) on a tepid performance across segments. However, input cost savings and lower ad spends drove a 130bps YoY expansion in EBITDA margins to 18.1%. With volume growth remaining muted, we believe Dabur’s near-term performance could be marred by weak macros and continued stiff competition from Patanjali. Valuations at 34x FY18E EPS seem rich.
With volume growth remaining tepid, we believe near-term growth could to be marred by weak consumer spends and high competitive intensity. Valuations at 34x FY18E EPS do not fully discount the medium-term earnings risks in our view. We roll forward our estimates and maintain SELL with a Sept’17 TP of Rs 285.
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