Accumulate Dabur India; target of Rs 470: Dolat Capital

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Dolat Capital's research report on Dabur India

Dabur’s Q4FY20 results came significantly below our estimate as Covid-19 impact was higher than our anticipation. Domestic volume declined by 14.6% YoY during the quarter. Pre lockdown the company posted 4.6% volume growth.  Considering lockdown and production disruption in April and May’20, the company expects impact of Rs 4.0-4.5bn on revenues and Rs 600-800mn on APAT in FY21E. We have reduced our FY21E and FY22E EPS estimates to Rs 8.4 (-16.4%) and Rs 9.8 (-12.2%), to factor in extended lock down and sluggish economic growth.

Outlook

We value the stock at 48x FY22E EPS to arrive at a TP of Rs 470. Downgrade to Accumulate; buy on dips.

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