Prabhudas Lilladher's research report on Dabur India
Dabur 2Q results came in line and company gave cautiously optimistic outlook in 2H led by 1) Gradual recovery in rural demand with gap between rural and urban being reduced 2) market share gain across categories and 3) success of new launches. Demand/volume trends are expected to improve in subsequent quarters with green shoots in rural demand, moderating inflation and higher government spending. Dabur currently remains a play on growth revival in rural India given 45-50% contribution to overall sales. We believe sustained innovation and launches in core segments like Healthcare, oral care& HPC will help sustain double digit growth in India. While sustained revival in GCC/SAARC seems on track, spreading of Israel war to other countries remains a risk.
Outlook
We estimate 14% EPS CAGR over FY23-26 and arrive at DCF based target price of Rs597 (43.9x Sep25 EPS). Dabur trades at 39.1x Sep25 EPS with 21.2% ROE. Retain Accumulate.
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