While Dabur expects H2 FY26 topline growth to pick up to high-single digits, it cautioned that GST-related trade disruption had spilled over into October. The GST tremors also hampered winter-portfolio channel loading – while this will now happen in Q3 FY26, Dabur noted it would maintain distributor-level stock pipeline at 22 days, which the brokerage believes can likely limit the Q3 upside from loading.
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Systematix Report
Dabur India Ltd.’s recent growth trends have been underwhelming, especially in Q2 FY26 off an exceptionally weak base quarter in healthcare and beverages, notwithstanding the twin impact of GST and seasonality.
Categories of beverages, oral care and hair care continue to contend with elevated competitive intensity, necessitating high consumer/ trade incentives. However, performance can gradually revive going forward, aided by-
sustained rural rebound (7-8% growth for Dabur) with eventual urban recovery,
share gains in home and personal care categories, and distribution expansion, Dabur maintains strong positions in legacy ayurvedic products (honey, chyawanprash), premium launches/ format extensions in HPC/ Healthcare (Chyawanprash variants now contributing 20-30% to brand sales), and
an F&B recovery with launches that plug portfolio gaps (Activ coconut water).
We expect some margin support from better mix, cost savings and pricing power in key brands.
Valuation: We marginally trim our FY26E-FY28E revenue/ EPS estimates by 1-3%, and build FY25-FY28E revenue/EPS CAGR of 6%/10%.
We maintain Hold rating on the stock; we roll forward valuation to September-2027E EPS (vs June-2027) and value Dabur on a P/E of 44x, in line with its current one-year forward multiple and at a discount to peer Marico, resulting in a revised target price of Rs 550 (earlier Rs 565).
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