Dabur India Q4 Results Review - Rural Demand Bounces Back: Prabhudas Lilladher

Prabhudas Lilladher Report

Dabur India Ltd. has given cautiously optimistic outlook for FY25 led by-

1. 8% growth in rural sales (~50% of domestic sales),

2. strong performance across oral care, Home care with market share gain across categories and

3. innovations and distribution led gains.

Dabur expects volume/realisation growth to enable high single digit to low double sales growth with calibrated margin expansion. International business continues to face currency led headwinds while Namaste litigation expenses are likely to peak out (Rs 800-900 million in FY25).

We believe harsh summer will provide tailwind to Juices/ drinks/ Glucon-D while normal monsoons will boost rural demand and tame inflation. We believe sustained innovation, premiumisation and launches in core segments like healthcare, oral care and home and personal care will help sustain double-digit growth.

We increase our FY25/FY 26 earnings per share estimates by 1.4%/1.8% and estimate 12.8% EPS compound annual growth rate over FY24-26.

Dabur is trading at 39.7 times March-26 EPS. We arrive at discounted cash flow based target price of Rs 563 (Rs 535 earlier) which implies a price-to-earning of 42.5, in line with LTA. Retain Accumulate for moderate returns.

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