Shares of Dabur India were up 3 per cent to Rs 530 on the BSE in the intra-day trade on Wednesday, gaining 5 per cent in the past two trading days, after the FMCG major reported a strong 16.8 per cent year-on-year volume growth in September quarter (Q2FY21). Stock of the personal products company was trading close to its 52-week high level of Rs 535, touched on October 6, 2020.
Dabur India reported a strong growth performance in Q2FY21 backed by sustained efforts in driving demand for its Ayurvedic Healthcare, Hygiene and Nutrition products, coupled with strong innovation to meet the emerging consumer needs in the wake of the Covid-19 pandemic.
In Q2FY21, the company's consolidated revenue grew 13.7 per cent YoY at Rs 2,516 crore, highest in the last couple of quarters. Consolidated net profit, meanwhile, rose 19.5 per cent at Rs 482 crore on YoY basis. Operating EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins expanded 50 basis points to 22.6 per cent.
The management said favourable monsoon and enhanced stimulus announced by the government as part of its overall thrust on boosting rural economy is expected to further drive rural demand in the coming months.
"With strong tailwind from health and immunity products, Dabur India got the new structural growth levers. We believe the company would continue to witness strong growth in the medium term from these trends. Moreover, benign commodity cost and savings programme leaves enough scope to increase margins over the long term," ICICI Securities said in result update.
Growth outlook, analysts at Emkay Global Financial Services say, has improved on the back of strong traction in healthcare and improving growth across Home and Personal Care (HPC) and increased aggression in portfolio and distribution expansion. "However, valuations at 39x FY23 and limited upsides to earnings keep us neutral/OW in EAP on the stock," the brokerage said with target price of Rs 530 per share.
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