Dabur India Ltd | Fundamental Analysis

By | 4th April 2018

CMP: 327          Target Price: 375          Upside:15%

Reasons to Invest:

  • Dabur India is one of India’s leading FMCG companies. Company’s FMCG portfolio includes five flagship brands with distinct brand identities – Dabur India as the master brand for natural healthcare products, Vatika for premium personal care, Hajmola for digestives, Real for fruit-based beverages, and Fem for fairness bleaches & skin care.
  • Due to robust demand for coconut and perfumed oils, the company has witnessed 16.7% growth in hair oil segment. The company has maintained strong volumes in hair oil segments due to low price products and direct marketing in rural segment.
  • In addition, Oral care recorded a growth of 23% driven by increase in penetration, strengthening foothold, strong growth in South and increase in e-commerce sale. The company is expecting robust demand of their Oral care products, especially in natural products. You might like this : Book Review: Brightest Investment Minds
  • The company has lined up a number of exciting initiatives and are committed to aggressively launch new products leveraging on its Ayurvedic heritage and cutting-edge science to grow ahead of the market. The medium to long-term prospects, particularly for India, remain robust and it is confident that domestic consumer demand, led by a revival in rural markets,will gain pace in coming months.
  • Furthermore, Preparing for the next growth wave, Dabur India has also put in place a new sales structure termed Buniyaad, splitting the front-end sales force across portfolios and geographies. The move would lead to sharper focus on servicing each of the three verticals — Healthcare, Home & Personal Care, and Foods. The company continued to invest behind new-age distribution initiatives such as e-commerce and digital platforms to build stronger connect with consumers.
  • The company will continue to invest strongly in brands, distribution and other infrastructure to grow ahead of the market and enhance shareholder value. The company has consistently given back a significant chunk of net profits to shareholders in the form of dividends.

Valuation

The company is confident of successfully tapping the significant growth opportunities to deliver strong and sustainablel long-term growth on the back of the power of brands and the investments are making behind its brands. The company is likely to maintain the pace of new product introduction, but will aggressively promote small but strong brand offerings. Thus, it is expected that the stock will see a price target of Rs.375 in 8 to 10 months time frame on a three year average P/E of 41.86x and FY19 (E) earnings of Rs.8.97. You might like this : 3 Stocks For Bottom Fishing | Gain Up To 178%

Face Value Rs.: 1.00
52 Week High/Low 368.00/265.05
M.Cap Rs. in Cr.: 57601.72
EPS Rs.: 7.41
P/E Ratio (times) 44.16
P/B Ratio (times) 10.92
Dividend Yield (%) 0.83
Stock Exchange BSE

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Disclaimer:

My descriptions, videos, presentations are only for educational and information purposes and under no circumstances should be used for making investment decisions. I cannot guarantee the accuracy of any information provided.
The stocks picks are based on my own research and personal views and sometimes are from newspapers, tv channel program, magazines, etc. No part of compensation is or will be directly or indirectly related to the views and recommendations of this research. I have not served as an officer director or employee of company and have not been engaged in market – making activity of the company covered in the research report. Consult qualified financial advisor before making any investment decision.

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