Multi Baggers
Dabur India
BSE ID : 500096 NSE ID : DABUR
RECOMMENDED PRICE 428.70
PEAK FROM RECO 658.75 53.66%
CURRENT PRICE 504.35 Resource id #12
Dabur India Ltd is a leading packaged consumer products manufacturer, offering a wide range of products based on traditional Ayurveda and Nature. With co`s continuous focus on brand building & margin expansion along with innovation, we believe that Dabur will sustain strong growth going forward. Hence we are recommending ``Buy`` on the stock with price target of Rs 515 for long term horizon.
Dabur India Ltd is a leading packaged consumer products manufacturer, offering a wide range of products based on traditional Ayurveda and Nature. With a legacy of over 134 years, Dabur is today the oldest and the most trusted name in the field of Ayurveda and Health Care. Some of co`s most iconic brands, which are popular across the globe, are Dabur Chyawanprash, Dabur Amla, Vatika, Real, Hajmola, Fem and DermoViva.
Robust Distribution Network: During fiscal 2017-18 co’s direct reach crossed 1 million retail outlets, making it one of the largest direct distribution networks in the FMCG space in India. Co have also significantly strengthened its rural footprint with now reaching close to 42,000 villages across the country with 370 super-stockists and over 10000 sub stockist. The company covers over 200,000 chemists and over 10,000 Ayurvedic pharmacies to promote and sell its healthcare products. At the end of FY18, NewU’s (co’s chain of beauty retail stores) retail footprint stood at 83 stores across 31 cities.
Healthy double digit growth across segments in Q1FY19: During Q1FY19, Shampoo business posted a growth of over 30%. Dabur’s Honey sales continued to report strong gains, growing by around 42%, driving the Health supplements category growth to 27.5% during the same quarter. Skin Care category grew by 27.1%, while the foods business, led by strong demand for co’s packaged juices, posted over 26% growth during Q1’19. Digestives business also grew by nearly 22% during the quarter, while Dabur’s Home Care and Oral Care businesses reported an over 17% growth. The domestic FMCG business reported a highest-ever volume growth of 21% during the quarter.
Strong growth strategy: The company`s strategy is to pursue a strong growth path with increasing focus on Ayurveda and nature-based products in Healthcare, Personal Care and Foods segments. Company considers its healthcare portfolio as unique and a strong generator of profitable growth for a long time to come. The penetration of OTC products is very low in India. This provides enormous opportunities for growth in the future. In addition, the increasing consumer preference for Ayurvedic products provides Dabur a unique platform for offering products which are in sync with consumer preferences.
The company is currently trading at 53.32 of TTM eps of Rs 8.04 while it is trading at 47x of FY19E eps & 41x of FY20E eps. During Q1 FY19, co has shown strong financial performance with approx. 7 % increase in margin & healthy double digit growth in volumes across all segments which is significantly ahead of market. With co`s continuous focus on brand building & margin expansion along with innovation, we believe that Dabur will sustain strong growth going forward. Hence we are recommending ``Buy`` on the stock with price target of Rs 515 for long term horizon.
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Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advice. Reader is requested to rely on his own decision and may take independent professional advice before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned herein and the same have acted upon or used the information prior to, or immediately following the publication.
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