Geojit Financial
Dabur India (Buy)
Target: ₹612
CMP: ₹537.40
Dabur India, a leading Indian FMCG company, is a world leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products.
Q4-FY21 sales grew 25.3 per cent y-o-y, on strong demand-driven growth in Healthcare, Home & Personal Care and Food & Beverage businesses.
Despite stable EBITDA margin of 18.9 per cent, EBITDA rose 25.6 per cent y-o-y on robust topline growth. Resultantly, PAT also grew 25.5 per cent y-o-y.
Amidst the second wave of pandemic, the company has taken adequate precautions in terms of inventory management and is well placed to tackle any potential supply chain disruptions. We expect company’s growth momentum to continue aided by robust demand.
The company is prepared for extended lockdown by keeping high levels of inventory to support traction in newly launched products. Healthcare products are set to witness strong performance over medium term, as customers focus on immunity booster and healthy lifestyle.
Rural segment is less likely to be impacted from lockdown with support from government stimulus. We expect company’s growth momentum to continue aided by robust demand and hence reiterate our Buy rating with a revised target price of ₹612.