Dabur In Spotlight: Dabur India's expected double-digit growth in the September quarter has left brokerages divided on how much of the improvement is already reflected in the stock.
Nomura expects the recent recovery to gather pace and retains a Buy rating with a Rs 625 target, while Goldman Sachs remains Neutral with a Rs 485 target despite acknowledging an improved performance led by the India business.
The divide comes as Dabur expects double-digit growth in both consolidated revenue and its India FMCG business in Q2FY27. Nomura sees the company entering the coming quarters with a softer and favourable base, while Goldman Sachs is focusing on the quality of the improvement and the contribution from new channels.
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Nomura Sees Growth Momentum Carrying Into Coming Quarters
Nomura maintained its ‘Buy; rating on Dabur with a target price of Rs 625, highlighting that double-digit growth has sustained.
The brokerage expects EBITDA margin to moderate marginally year-on-year (YoY), but sees the underlying business trajectory improving sequentially. It also pointed to a softer and favourable base in the coming quarters, which could support the growth trajectory.
For Nomura, the focus is therefore shifting beyond the September-quarter number towards whether the recent improvement can sustain as Dabur moves into the next few quarters.
Goldman Sachs Stays Neutral Despite Better India Performance
Goldman Sachs maintained its ‘Neutral' rating with a target price of Rs 485.
The brokerage acknowledged an improved performance driven by Dabur's India business, with the company delivering double-digit revenue and PAT growth in Q2.
Goldman Sachs also highlighted the role of new channels in supporting growth, suggesting that Dabur's investments in its distribution and channel strategy are beginning to contribute to the overall performance.
The differing ratings put the focus on whether the improved operating momentum can translate into a sustained earnings recovery. Nomura is more constructive on the trajectory, while Goldman Sachs remains more measured despite the better Q2 performance.
Dabur Expects Double-Digit Q2 Growth
Dabur expects consolidated revenue to register double-digit growth in the quarter ended September 30, 2026. Its India FMCG business is also expected to post double-digit growth, which the company described as its strongest performance in recent quarters.
The Home & Personal Care business is expected to grow in double digits, with hair oils and shampoos projected to post high-teens growth. Dabur said both perfumed and coconut hair oils recorded robust growth, marking the fourth consecutive quarter of double-digit growth for the business.
Oral care is expected to grow in the mid-single digits on a high base, while home care is projected to grow in the high single digits. Skin care is expected to deliver double-digit growth.
The Healthcare business is expected to grow in the mid-single digits. OTC & Ethicals is projected to recover sequentially with early-teens growth, while Digestives are expected to maintain strong momentum with high-teens growth.
Health supplements, however, were affected by the ongoing transition to refreshed packaging and labels, creating a temporary drag during the quarter.
New Channels And Rural Demand Add To The Growth Story
Dabur expects its Foods and Beverages business to grow in the mid-teens, with Foods continuing to deliver strong double-digit growth and Beverages recording early-teens growth.
The company said emerging channels such as e-commerce and quick commerce continued to see strong growth, supported by investments and its omnichannel distribution strategy. Modern Trade also continued to grow at double digits.
General Trade remained healthy across both urban and rural markets, with rural markets continuing to outpace urban growth, supported by Project Saksham.
Its international business is expected to post high-teens growth in INR terms despite severe headwinds in the Middle East. Egypt, Turkey, the US, Bangladesh and the UK are each expected to record strong double-digit growth in INR terms.
Margin Pressure Remains The Watchpoint
The growth recovery is not coming without cost pressures. Dabur said inflation remained elevated, particularly in its HPC and OTC & Ethicals businesses, weighing on operating margins.
Calibrated price increases and cost-saving initiatives partly offset the pressure, but Nomura still expects EBITDA margin to moderate marginally YoY.
Dabur expects PAT to continue growing at a double-digit pace.
The September-quarter update therefore leaves investors with two distinct brokerage readings.
Nomura is betting that the sequential improvement, favourable base and sustained double-digit growth can support a stronger trajectory, while Goldman Sachs remains Neutral despite recognising the improvement in India and the contribution from new channels.
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