Dabur Q1 Results Review - Inline; Improving Narrative: Motilal Oswal

Motilal Oswal Report

Dabur India Ltd.’s Q1 FY24 result was broadly in line with our estimates in all aspects. It reported volume growth in both rural and urban markets, with an increase in distribution reach and market share.

Home and personal care and healthcare showed moderation in raw material inflation, while the food inflation remained high. It led gross profit margin expansion of 70 basis point YoY. With increase in media spending, Ebitda margin remains flat at 19.3%.

Allied with synergies in the healthcare portfolio, it expects to achieve double-digit consolidated sales growth in FY24. Badshah masala (grew 24%) addition to foods portfolio adding the growth momentum.

Dabur has shown the rural recovery ahead of industry, and nearly half of its domestic sales coming from rural markets, which will boost growth momentum.

We maintain our 'Buy' rating on the stock with a target price of Rs 660 at 50 times FY25E earnings per share.

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