Dabur India Ltd. share price target

With increasing health consciousness, some products with immunity booster proposition like Chyawanprash, Honey & OTC products are gaining traction. Further, the company also launched five new products in the healthcare space along with immunity booster kit. DIL posted 400% surge in Chyawanprash demand & 80% growth in honey in the last few months inducing it to expand capacity of these products to meet the current demand. We believe health supplement would be driving the growth and could see structural demand improvement given increasing consumer...

We also expect an impact on FY21 earnings owing to its high dependence on wholesales and on the profitable MENA business getting affected by the sharp crude price decline. sales/ EBITDA/ Adj. PAT grew 2%/ 3%/ margin contracted 260bp YoY to 18.9% (v/s est. The goal is to appeal to the millennial, increase accessibility and drive penetration through sampling and Management has identified power brands (1) together contribute ~65% of sales, but would contribute large part of Ad-spend focus on power brands would mean that even if overall ad spend rises by only ~6-7%, the increase in ad spends on power brands is likely to be in In its home and personal care portfolio where penetration is very high, the aim is to take market share from peers and plug gaps in terms of portfolio and Weak results and muted near-term outlook has led to 7.4%/9.0% decline in EPS forecasts for FY21/FY22E.

with launch of a slew of immunity boosters, Juices and Milkshake and a new shampoo and Covid care products (Hand, Surface sanitizer, COVID kit and Veggies wash etc.), which will help neutralize the COVID impact to some extent. Dabur is positive on rural demand revival given large scale migration, however we believe that overall impact on demand would be negative given large scale erosion in pricing power. We estimate just 1.5% EPS growth in Fy21 and 10.7% CAGR over FY20-22. While the endeavor to drive growth and invest gains in business is positive, sustained momentum in new launches...

Dabur India Ltd (Dabur), a leading Indian FMCG company, is a world leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products. The company operates through Health Supplements, Digestives, Shampoos, Hair...

Dabur has outperformed in a tough environment as its brand building initiatives are beginning to pay dividends. Mohit Malhotra is focusing on (a) Scaling power brands (8 brands with 65% revenue mix) which have a large addressable opportunity, (b) Deeper rural penetration led by higher direct reach (targeting 55k/60k villages in FY20/21) and (c) Innovation of new products. We remain optimistic for Dabur and expect co will be opportunistic in the rural recovery. Dabur posted healthy 5.6% domestic volume growth (est 5%) despite weak consumer sentiments in rural India. Focused strategy on power brands, innovative launches and increase in rural reach is driving share gains. Rural growth outpaced urban by 400bps for Dabur (in contrast to industry). Oral care growth at 8.5% was much better than category growth and market leader (Colgate posted 4%). Health Supplements and Digestive also posted healthy 12% and 16% growth. Food remained muted due to category issue, will be keen to watch performance in upcoming season. Despite near term headwinds, we believe Dabur will outperform peers owing to (1) Focus on power brands, (2) Expanding addressable market, (3) Healthy growth in natural category, (4) Rising distribution reach and (5) Innovative launches. We value Dabur at 40x on Dec-21E EPS, arriving at a TP of Rs 510. Maintain BUY.

Healthcare shines, HPC muted, foods segment disappoints The healthcare segment witnessed robust growth of 10.7% during the quarter. Most of the power brands that the management has laid focus on for the medium term are from the healthcare segment, among which Chyawanprash, Hajmola, Pudin Hara and Honitus registered strong growth during the quarter. Growth in home & personal care was subdued at 3.5%, impacted by a severe slowdown in hair oils, which remained flat (up 0.4% YoY). On the positive side, oral care grew 8.5% YoY on the back of a strong...

Rural sales for Dabur grew 400bp, ahead of urban in 3QFY20, and aided by Results for the quarter were better than estimates led by domestic volume growth, international business and higher gross margins. Valuations are fair at 46.3x FY21 EPS, particularly for a business with moderate earnings growth prospects (~14% CAGR over FY20-22 despite base of 6.4% CAGR in the past 4 years) and RoCEs in mid-20s, also at with TP of INR480 (targeting 40x Further deceleration was witnessed in the FMCG sector in 3QFY20. Demand 6.6% FMCG category value growth itself a multi-year low on Nielsen data, which was 5.3% in Dec19 therefore, slowdown was witnessed toward the quarter-end. Overall domestic sales growth was 5% YoY with 5.6% volume Gross Margins should expand, led by low RM costs in 4QFY20, but company will invest in ad-spends; therefore EBITDA margins are unlikely to expand in the domestic business.

Dabur has two divisions in India (Consumer care division and Foods division) apart from its international operations.

Margins expand in Q2 but valuation expensive Dabur India Ltd (Dabur), a leading Indian FMCG company, is a world leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products. The company operates through Health Supplements, Digestives, Shampoos, Hair...

Healthcare segment witnessed robust growth of 11.1% growth on account of increased focus of the management in health supplements and digestives verticals (double digit growth in Chyawanprash, Glucose and Digestives). Growth in home & personal care was subdued at 4% impacted by a severe slowdown in hair oils, which grew a mere 2.6% YoY. Oral care growth was also muted at 4.4% though Dabur Red sustained healthy growth of 9.5%. Foods segment declined 5% due to category slowdown and downtrading to lower priced alternatives. Dabur's rural sales grew ahead of urban sales (6%...