Dabur India share price fell 3 per cent to Rs 513.40 apiece on BSE, a day after the company posted a 22.1 per cent on-year decline in the consolidated net profit to Rs 294.2 crore for the quarter ended March 31, 2022. The company reported an exceptional item of Rs 85 crore on account of impairment of goodwill of Turkey business due to steep devaluation of Turkish Lira. At least three brokerage firms are bullish on this stock, and see up to 19 per cent potential rally from the last close.
Motilal Oswal Financial Services: Buy
Target: Rs 630, Rally: 19%
Analysts at Motilal Oswal Financial Services said that the medium-term and structural narratives on revenue growth are highly attractive, led by the initiatives taken by the new CEO in recent years on power brands, distribution, launches, and better analytics. Consequently, FY23 is likely to be the fourth year out of five of double-digit sales growth. As the impact of investing in these initiatives abates, Dabur’s margin is likely to expand in FY24. In the near term, Dabur’s sales visibility is better than its peers. Coupled with higher pricing power v/s its peers, Dabur’s earnings have better visibility.
Prabhudas Lilladher: Accumulate
Target price: Rs 603, Rally: 14%
Prabhudas Lilladher remains positive on long-term outlook given the innovation-led growth strategy, increasing share in foods & beverages category, LUP Innovations allowing Dabur to leverage its distribution, cost saving initiatives, and strong rural distribution coverage of 90k villages (30k added in FY22) 7) 4-5% incremental sales every year from ecommerce innovations. Dabur remains a formidable play on recovery in rural demand in coming quarters. Dabur trades at 38.2x FY24 EPS with 16% EPS CAGR over FY22-24 and 24% ROE and 50% dividend payout.
Yes Securities: Buy
Target Price: Rs 609, Rally: 15.12%
Analysts at Yes Securities built in revenue/EBITDA/PAT growth of 2%/13%/14% over FY22‐24E. They trimmed their EPS estimates by ~6% to incorporate margin headwinds and slightly lower revenue growth assumptions due to rural slowdown and category headwinds in hair oil. But given attractive valuations and possibilities of inorganic growth, the brokerage firm maintained buy on the stock with a revised price target of Rs 609 based on 45x FY24E earnings, in‐line with its 5‐yr average multiple.
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