Buy Dabur India; target of Rs 381: Reliance Securities

Reliance Securities's research report on Dabur India

Benefiting from lower base effect and pipeline refilling post GST roll-out, Dabur India’s 2QFY18 numbers marginally exceeded our estimates. While consolidated net sales came in at Rs19.6bn vs. our estimate of Rs19.4bn, its net profit grew by 1.3% YoY to Rs3.6bn vs. our estimate of Rs3.5bn. Underlying consolidated revenue growth in constant currency terms stood at a healthy 8%. Domestic business grew by 10% YoY in value terms on comparable basis with 7.2% YoY growth in volume. Looking ahead, we believe that lower base effect, good monsoon, steady input costs and new product pipeline should aid growth for Dabur in coming quarters.

Outlook
Expecting the Company to post revenue and earnings CAGR of 10.7% and 14.4%, respectively through FY17-19E, we maintain our BUY recommendation on the stock with a revised Target Price of Rs381 (from Rs360 earlier).

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