Buy Dabur India, target price Rs 620: ICICI Direct

ICICI Direct has buy call on with a target price of Rs 620. The current market price of Dabur India Ltd. is Rs 582.95. Time period given by analyst is one year when Dabur India price can reach defined target.

Dabur India Ltd., incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 103482.75 Crore) operating in FMCG sector.

For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 2421.77 Crore, down -13.81 % from last quarter Total Income of Rs 2809.77 Crore and up 24.76 % from last year same quarter Total Income of Rs 1941.13 Crore. Company reported net profit after tax of Rs 377.88 Crore in latest quarter.

Investment Rationale
Dabur is likely to witness 25.8% revenue growth on the back of sales decline in base quarter to the extent of 12.9%. The brokerage believes second wave of Covid-19 would have impacted sales in April-May given adverse impact reached rural regions. However, the brokerage believes growth in health supplement & OTC, ethnic products has been strong in continuance of FY21. It expects 168 bps gross margin contraction during the quarter given crude based raw material cost has risen sharply. Operating margin is expected to contract 118 bps. The brokerage expects net profit growth of 21.1% to Rs 413.3 crore.

Promoter/FII Holdings
Promoters held 67.9 per cent stake in the company as of Dec 30, 2020, while FIIs held 18.5 per cent, DIIs 5.9 per cent and public and others 7.7 per cent.

(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of Please consult your financial adviser before taking any position in the stock/s mentioned.

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