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Dabur: Positive outlook; To continue to its growth trajectory in the near term - IndiaNotes.com
Dabur: Positive outlook; To continue to its growth trajectory in the near term
Way2wealth | Published: 14 Nov, 2017  | Source : IndiaNotes.com

Company Background and Business Model


Dabur India is one of the leading Indian consumer goods company with presence across Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. It is the world’s largest Ayurvedic and Natural Health Care Company with a portfolio of over 250 Herbal and Ayurvedic products. Dabur’s positioning on the ‘health and wellness’ platform, backed by its ayurvedic, natural and herbal has created a niche for its product offerings. Its portfolio includes 5 flagship brands - Dabur as the master brand for natural healthcare products, Vatika for premium personal care, Hajmola for digestives, Real for fruit juices & beverages and Fem for fairness bleaches & skin care products. It has a wide distribution network, covering over 6 million retail outlets in urban and rural markets. Dabur now markets its vast line of products in over 120 countries, through 30 states of the art manufacturing units, 10 out of which are located outside India.Dabur's overseas revenue today accounts for over 30% of the total turnover.


Investment Argument


- Quarter 2 results indicative of volume revival


- Rural India a key Growth driver


- Basking in the glory of Ayurveda and gearing for new launches


- International business finds its footing


Valuations


At its CMP of ` 341.85/-, the stock trades at ~47.5x its TTM earnings of `7.2/-. While the management is cautiously optimistic they did voice a positive tone that the worst is behind now. The company aims to garner higher market share in the quarters to come. The company has turned aggressive with new product launches. The company has a wide product basket, along with a balanced mix of both urban and rural markets. A meaningful improvement in consumer off take is a positive, and could reflect in Dabur’s performance in the coming quarters. Growth has been much higher than expected in Q2 with a lower base effect in the coming H2 we believe Dabur will continue to its growth trajectory in the near term and are hence POSITIVE on the stock.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.