HDFC Securities’ research report on Dabur:
Dabur’s 1QFY21 is widely hovering in domestic revenue. Consolidated Revenue / EBITDA decreased by 13/9% YOY (in-line) with domestic income / volume decline of 7/10% YOY (HSIE -13%). Domestically, HPC and food portfolios fell 15% and 34% YOY, while healthcare recorded 29% YOY growth (Honey and Chivanprash increased 69% and 7x YOY). Market share gains (across the portfolio), rural growth (+ 1% YOY), and strong demand for health care products are key highlights of this result. Performance in oral care (+ 1% YOY) was better than Colgate (-4% YOY) and the company gained market share in toothpaste. Juices are stressed as OOH consumption affects LUPs. Ecommerce achieved strong growth and the revenue mix grew to 5.6% (up 1.5%). International trade fell 22% YOY with a heavy impact in Mena and Egypt. Bangladesh achieved 14% CC growth (healthy growth for Mariko too).
- The lower customer offers,
- Price increases and
- High focus on cost rationalization.
We hope to gradually recover with the help of a healthy pickup in the rural and health care portfolio.
We maintain our EPS for FY21 / FY22 / FY23. We value Dabur at 42x p / e on June-22E EPS and the target price is Rs 433. Manage to REDUCE.
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