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Nirmal Bang Report
There is no material change to our earnings per share forecasts of Dabur India Ltd. as results were in line and commentary was as expected. Our Ebitda margin forecast of ~20% in FY24 is slightly higher than management's guidance of ~19.5%.
We admire the aggression that Dabur has exhibited in recent years, but results have been mixed, thus making the stock an underperformer vis-a-vis peers in the past four years, which is not surprising as four-year and five-year EPS growth ending FY24E has been muted in the mid-single digit range.
As we had highlighted in our analyst meet note in September 2023, we await the results from the strategic changes initiated by the new healthcare business head who joined earlier this year.
For now, the fair valuation of ~43 times FY25E EPS has led us to maintain 'Accumulate' rating.
Even as we maintain our target multiple of 45 imes, we roll forward to Sepember-25E EPS from June-25 earlier, resulting in a target price of Rs 600.
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