2 May 2019 Sales, EBITDA and adj. DABUR is targeting high-single-digit volume growth in India FMCG in FY20, with 2-3% realization growth. We cut our FY20/21 EPS forecast by ~3%/4% to factor in the companys weaker-than-expected performance. Despite this, FY19 turned out to be the third successive year of single-digit EPS growth and the fifth consecutive year of less than 12% sales growth. The company continues facing challenges in the form of a large and underperforming international business (~30% of sales) and an unwieldy domestic portfolio of brands, many of which are yet to demonstrate sustainably strong growth. Valuations are not cheap at 41.6x FY20, particularly for a business with moderate earnings growth prospects and lower-than-peers RoCEs of mid-20s. At the same time, we do acknowledge that earnings could come in better than expected if rural growth surprises positively and the new CEO further sharpens the focus on growth.