Dabur India Q3 Review: Home, Personal Care Has Analysts Positive But Macro Challenges Persist

Dabur India Ltd.'s third quarter results impressed brokerages. However, macro challenges have them cautious on growth outlook.

JPMorgan, Goldman Sachs, Nuvama and Emkay retained their ratings on the stock, as home and personal care segments shone this quarter.

Dabur's profit rose marginally, aligning with analysts' estimates. Net profit increased by 1.6% year-over-year to Rs 522 crore, while revenue rose by 3.1% to Rs 3,355 crore. Operating profit also saw a 2.1% increase to Rs 682 crore, with margins standing at 20.3%, in line with estimates. With these results, brokerages have maintained a positive outlook on the stock.

JPMorgan has maintained a 'neutral' rating on Dabur, cutting the target price to Rs 550 from Rs 580. The Q3 results were in line, the brokerage said, but highlighted challenges in the healthcare and beverage segments.

It expects a gradual uptick in volume and margins ahead, with margin expansion anticipated by fiscal 2026. However, it has cut FY25-27 EPS by 3-4% due to lower revenue projections.

Goldman Sachs also maintained a 'neutral' rating, but hiked the target price to Rs 550 from Rs 540. Dabur's Q3 performance was in line with expectations, with growth similar to its FMCG peers, driven by the home and personal care segment, the brokerage noted.

A strong resumption of outperformance in oral care and several initiatives in the beverage segment are expected to arrest revenue decline, it said. Goldman expects Ebitda margins to remain flat year-over-year.

Dabur’s third quarter revenue and Ebitda grew by 3.1% and 2.1% year-over-year, respectively, Nuvama said. It has retained a 'buy' rating but slashed the target price to Rs 635.

Domestic business saw modest growth in value and volumes, affected by the delayed onset of winter, which impacted the winter care portfolio.

Home and personal care and food segments grew by 5.7% and 30% year-over-year, respectively, while healthcare and beverages fell by 1.3% and 10.3%, Nuvama noted.

The international business surged by 18.9% in constant currency terms.

The research firm has cut FY25E/26E/27E EPS by 6%, 3.9%, and 2.8%, respectively.

Dabur India's outlook remains weak despite the tailwinds of high rural dependence, a diversified portfolio, and a wider total addressable market, according to Emkay.

The company has been consistent in gaining market share and expanding TAM, but growth remains elusive. Amid a weak macro environment, Dabur is truncating its strategic planning to three years from four and is working with McKinsey & Co. to refine its strategy, the brokerage said.

Emkay maintained its estimates and awaits proof of execution before turning more constructive on the stock. It also continues to recommend an 'add' rating, with an unchanged target price of Rs 550 per share.