Q3FY21 Result Update - Dabur India - ICICI Direct

Dabur India (DIL) continue to report robust results with 18.1% domestic volume growth led by strong traction in health supplement, oral care, OTC & ethical businesses. The company reported 16% consolidated revenue growth with 19.5% India FMCG growth & 13% international business growth. The higher penetration led growth continued in health supplement and oral care segments with 34.7% & 28% jump in sales, respectively. DIL raised its ad spends (170 bps higher) behind core & power brands, which, in turn, benefited most new launches under core brands. New products (launched in the last three quarters) contributing 4-5% to the sales now. The company maintained its gross margins at 50.4% (31 bps higher) while employee spends sustained at corresponding quarter level. DIL was able to save 113 bps overhead spends by cost rationalisation efforts in a post pandemic period. Operating profit increased 16.5% to Rs. 574.2 crore. The company was able to maintain its operating margins at 21% despite higher ad-spends. PAT grew 23.7% to Rs. 493.5 crore mainly on account of higher operating profit, lower interest cost & lower tax provisioning.

Valuation & Outlook

DIL has many new structural growth trends in its favour. Moreover, the company is continuously increasing its direct reach (targeting 1.4 million outlets by March 2021). Further, it would be able to generate sustain healthy revenue growth for the extended period by sufficiently spending on brand building. Given strong growth in high margin brands and cost cutting measures, we expect 14.4% earnings CAGR in FY20-23E. We maintain BUY recommendation with a revised target price of Rs. 620/share (earlier Rs. 595).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Dabur_Q3FY21.pdf

Shares of DABUR INDIA LTD. was last trading in BSE at Rs.515.25 as compared to the previous close of Rs. 527.6. The total number of shares traded during the day was 200429 in over 4134 trades.

The stock hit an intraday high of Rs. 532.25 and intraday low of 511.35. The net turnover during the day was Rs. 104767879.

Source : Equity Bulls

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