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Dolat Capital Report
Dabur India Ltd.'s Q2 FY24 results were in line with our estimate. Domestic fast moving consumer goods registered 3% volume growth and four-year revenue compound annual growth rate of 10%.
Growth in the domestic market was driven by strong growth in foods business but was restricted due to soft performance in beverages business (-10% gr).
Foods business including Badshah Masala acquisition reported 40.4% growth during Q2 while Badshah brand posted 16.4% growth.
Dabur's international business reported strong 23.6% revenue growth on constant currency and 10.4% in Indian rupee terms. Barring legal costs in Namaste like-for-like Ebitda increased 16.1%.
Digestives and home care reported double digit growth while most of the other segments reported single digit growth. Health supplements reported flat growth due to unfavorable seasonal changes.
We have broadly maintained our earnings per share estimates for FY24/25E at Rs 10.9/12.7 and introduced FY26E EPS at Rs 14.3.
Valuing the stock at 43 times FY25E, we arrive at target price of Rs 612 (15% discount to Hindustan Unilever Ltd.). Maintain 'Accumulate'.
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