Add Dabur India, target price Rs 585: HDFC Securities

HDFC Securities has add call on Dabur India with a target price of Rs 585. The current market price of Dabur India is Rs 529.5.

Dabur India, incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 96437.09 Crore) operating in FMCG sector.

Dabur India key Products/Revenue Segments include Personal Care, Other Operating Revenue and Scrap for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 3144.01 Crore, up 1.10 % from last quarter Total Income of Rs 3109.77 Crore and up 3.47 % from last year same quarter Total Income of Rs 3038.49 Crore. Company has reported net profit after tax of Rs 477.41 Crore in latest quarter.

The company’s top management includes Mr.Amit Burman, Mr.Mukesh Butani, Mr.Ajit Mohan Sharan, Mrs.Falguni Sanjay Nayar, Mr.Saket Burman, Dr.Ajay Dua, Dr.S Narayan, Mr.R C Bhargava, Mr.P N Vijay, Mr.Mohit Malhotra, Mr.P D Narang, Mr.Mohit Burman, Mr.Aditya Burman. Company has Walker Chandiok & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 177 Crore shares outstanding.

Investment Rationale
A fall in A&P spend (down 24% YoY) resulted in a 129bps dip in EBITDA margin to 20% (HSIE 19%). EBITDA declined by 3% YoY (HSIE -6%). The rural market is seeing down-trading and is still in the recovery phase. The brokerage values the stock at 42x P/E on Dec-24E EPS to derive a target price of Rs 585.

Promoter/FII Holdings
Promoters held 66.24 per cent stake in the company as of 31-Dec-2022, while FIIs owned 20.47 per cent, DIIs 7.4 per cent.