Macquarie, UBS bullish on Dabur India shares after robust volume growth in Q2

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Updated: November 1, 2017 9:54:08 AM

New Delhi-based Dabur India may have reported just a 1.3% rise in net profit compared to same quarter in the previous fiscal, however, UBS and Macquarie have increased their target prices on the shares of Dabur India.

UBS has increased the target price on the shares of Dabur India to Rs 400. (Image: Reuters)

New Delhi-based Dabur India may have reported just a 1.3% rise in net profit compared to same quarter in the previous fiscal, however, UBS and Macquarie have increased their target prices on the shares of Dabur India.  Dabur India Ltd on Tuesday reported consolidated net profit of Rs 361.93 crore in the quarter ended 30 September as compared with Rs 357.27 crore reported in the year-ago quarter. Notably, Dabur India has reported a 7.2% volume growth in the domestic market. “Adjusted for GST and currency translation, the comparable consolidated net profit marked a 7.2% growth during the quarter while the comparable standalone net profit also reported a 7.2% growth,” Dabur India said in a statement yesterday.

Macquarie has increased the target price on the shares to Rs 369, from Rs 340 earlier. The shares were trading at Rs 354 on NSE this morning, up by more than 6.5%. Macquarie observed that the company has an aggressive new-launch pipeline in the near to medium-term. “With consumer demand for nature and ayurveda-based products on the rise, Dabur’s positioning as the science-based Ayurveda specialist will pave the way for future growth. We have lined up a number of exciting initiatives and are committed to aggressively launch new products leveraging on our Ayurvedic heritage and cutting-edge science,”  Sunil Duggal, CEO of Dabur India said in a statement yesterday. Further, Macquarie says that the second half of the year will have lower currency depreciation impact in International Business.

Meanwhile, UBS has increased the target price on the shares to Rs 400, implying an upside of nearly 13% from the current market prices. UBS observed that the domestic business has shown robust recovery, while the worst is over for its international business. In the September quarter, the company’s revenues in India rose by more than 10.5% on a comparable basis and its international business grew by 3.9% on constant currency basis. Dabur India shares have returned more than 15% in the year so far, as compared to BSE Sensex, which is up by 25% in the same period.

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