We cut FY24/25 EPS estimates by 6.9%/5.3% for FY24/25 as a result of 1) slower than expected demand recovery 2) sustained pressure on gross margins 3) expected increase in ad spends from low base and 4) amortization due to Badshah acquisition. Dabur’s 4Q results showed 1% volume growth on the back of downtrading towards LUP’s, most categories including HPC reported lower growth in 4Q versus FY23. However, we remain constructive on Dabur given 1) visibility of green shoots in rural India 2) inflation moderating 3) market share gains in key categories 4) expected ramp up in fruit based drinks and Badshah Masala in coming periods. We believe Dabur is a formidable play on growth revival in rural India given ~45% contribution to overall sales. We believe sustained innovation and launches in core segments like Healthcare, F&B, Oral Care can accelerate growth in coming quarters.
OutlookWe estimate 21.3% EPS CAGR over FY23-25 and arrive at DCF based target price of Rs590 (45xFY25E EPS). Dabur trades at 40.4x Mar25 EPS with 20.8% ROE and 50% dividend payout. Retain accumulate.
For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Dabur India - 04 -05 - 2023 - prabhuDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
