Dabur’s stock price saw a 2% increase on Friday following the company’s announcement of strong earnings for the fourth quarter of FY24. Improved sales volume and the positive impact of a price hike contributed to the rise. Dabur shares climbed by 2.51% to reach Rs 537.50 each on the BSE.
In the quarter ending March 2024, Dabur India reported a consolidated net profit of Rs 341.22 crore, marking a 16.5% increase from Rs 292.76 crore in the corresponding quarter of the previous year. Whereas the FMCG giant’s revenue increased by 5.11% to Rs 2,814.64 crore from Rs 2,677.80 crore, YoY.
Friday’s gains followed Dabur’s board approval for share buyback and the release of its March quarter earnings. This marks Ajanta Pharma’s fourth share buyback since 2020.
Dabur has provided a cautiously optimistic forecast for FY25, anticipating an 8% growth in rural sales. It also expects robust performances in oral care and home care, with market share gains across various categories driven by innovations and distribution efforts.
Brokerages on Dabur
Motilal Oswal on Dabur
The brokerage maintained its ‘Buy’ recommendation for Dabur shares, setting a target price of ₹650 per share. Dabur remains Motilal Oswal’s top choice in the staple sector.
In contrast to its FMCG counterparts, Dabur has consistently experienced stronger growth in rural areas compared to urban markets. Motilal Oswal stated that with an improving volume trend and no negative impact from price reductions on revenue, they anticipate Dabur to continue outperforming in revenue growth in the near future.
Furthermore, the brokerage believes there is potential for operating margin improvement in the medium term, remaining around the ~20% mark, a trend that has been consistent over the past eight to nine years, unlike its peers who have seen expansion in this regard.
Prabhudas Lilladher
Prabhudas Lilladher has maintained an ‘Accumulate’ rating, forecasting moderate returns, and raised Dabur’s share price target to Rs 563 from Rs 535 previously.
The brokerage has revised its earnings per share (EPS) estimates upwards for FY25 and FY26 by 1.4% and 1.8% respectively, projecting a 12.8% EPS compound annual growth rate (CAGR) for the period spanning FY24-26.
Additionally the report anticipates that the intense summer season will bolster demand for Dabur’s juices, beverages, and Glucon-D products, while normal monsoon patterns will stimulate rural consumption and mitigate inflationary pressures. The brokerage expects continued focus on innovation, premiumization, and new product launches in key segments such as healthcare, oral care, and home and personal care to sustain double-digit growth.
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