Why is Dabur best-positioned staples portfolio in India?

Moneycontrol Bureau

Betting big on Dabur, Morgan Stanley feels it is the best-positioned staples portfolio in India. It has an overweight rating on Dabur with a target of Rs 325 per share. It is confident that the stock may be re-rated as investor confidence on growth visibility improves while steady earnings growth and better performance in the international business works in favour for the company.

Morgan Stanley says that Dabur has underperformed HUL, Godrej Consumer and Marico over the last six months by 10-34 percent on concerns of rising competition. It is positive that over FY2016-18, Dabur will become the most expensive staples stock in their coverage versus one of the cheapest now. Investors are likely to pay a premium for its strong product portfolio

The brokerage firm adds that Dabur is best placed to extend its core product portfolio with forecasts of a normal monsoon rains.

Accordin to Morgan Stanley, companies that are able to drive successful innovations to capture new consumers will emerge as winners. "Dabur has the ability to launch highly differentiated product offerings across its product portfolio, catalyzed by likely buoyancy in consumer sentiment from income growth and lifestyle changes, recent success of Patanjali and increasing awareness of Ayurvedic products," it says in a report.

At 11:38 hrs Dabur India was quoting at Rs 264.35, down Rs 1.15, or 0.43 percent on the BSE.

Posted by Nasrin Sultana Follow @NasrinzStoryData charts by Ritesh Presswala