The period given by the analyst is six months when the price of Dabur India Ltd. can achieve the defined goal.
Dabur India Ltd., incorporated in 1975, is a large cap company (having a market capitalization of Rs 108,935.02 Crore) operating in the FMCG sector.
The main product / revenue segments of Dabur India Ltd. include personal care, other operating income and scrap metal for the year ending March 31, 2021.
For the quarter ended 30-06-2021, the company reported consolidated total income of Rs 2,696.38 crore, up 11.34% from last quarter total income of Rs 2,421.77 crore and up by 31.42% compared to the total income for the same quarter of last year of Rs 2,051.77 crore. The company reported after-tax net profit of Rs 438.37 crore last quarter.
Justification of the investment
The brokerage expects EPS growth of around 13% CAGR during FY21-24E thanks to an 11.4% growth in sales CAGR during FY21-24E. While Dabur’s performance in FY16-20 was below that of its peer group FMCG, the brokerage expects it to significantly outperform its peers over the next 3-5 years. , exercise 21, if anything was the revolutionary year it needed. The brokerage believes the fair value of the stock’s base case is Rs 670 (51.5x Sept’23E EPS) and the fair value of the bullish case is Rs 716 (55x Sept’23E E EPS) . Investors can buy stocks in the Rs 613-619 band (47x EPS Sept’23E) and add more on the declines to the Rs 557-563 band (43x EPS Sept’23E). At LTP of Rs 616, he quotes at 47.4x Sept’23E EPS.
Promoter / FII Holdings
The promoters held 67.4% of the company’s capital as of June 30, 2021, while the FIIs held 20.6%, the DII 4.7% and the public and others 7.4%.
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