Dabur India Shares Hit Four-Year Low After Nuvama Highlights Weak Domestic Performance

Dabur India's share price hit over four-year low, falling over 7%, after Nuvama highlighted continued weakness in the company's domestic performance. Nuvama's assessment of Dabur's fourth quarter business update painted a lackluster picture of the company's financial health.

Dabur's consolidated revenue is expected to remain flat year-on-year, a significant downgrade from the earlier estimate of 3.1% growth, Nuvama said. This stagnation is attributed to delayed and truncated winters, which have impacted sales.

Additionally, the company's Ebitda is projected to fall by 9.1% year on year, compared to the previous estimate of 2.3% growth. This decline is due to the combined effects of inflation and operating deleverage.

The report also noted a dip in fourth quarter volumes, with domestic business expected to decrease by 4-5%.

Despite strong growth in international markets, particularly in MENA, Egypt, and Bangladesh, the overall FMCG volume trends in India remained subdued. Organised trade channels such as MT, e-commerce, and quick-commerce sustained growth momentum, while general trade faced continued pressure.

Despite the current challenges, Nuvama retained a 'buy' rating on Dabur India, with a target price of Rs 635 per share.

Shares of Dabur India fell as much as 7.57% to Rs 458 apiece. It pared losses to trade 6.14% lower at Rs 465.30 apiece, as of 12:07 p.m. This compares to a 0.26% decline in the NSE Nifty 50.

The stock has fallen 12.37% in the last 12 months. Total traded volume so far in the day stood at 12 times its 30-day average. The relative strength index was at 27.

Out of 42 analysts tracking the company, 23 maintain a 'buy' rating, 16 recommend a 'hold' and four suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 23.7%.