Dodla Dairy share price: Buy Dodla Dairy, target price Rs 700: ICICI Securities



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ICICI Securities bought the call on Dodla Dairy with a target price of Rs 700. The current market price of Dodla Dairy Ltd. is Rs 599.45.

The period given by the analyst is one year when the price of Dodla Dairy Ltd. can achieve the defined goal.

Dodla Dairy Ltd., incorporated in 1995, is a small cap company (with a market capitalization of Rs 3572.84 Crore) operating in the FMCG sector.

The main product / revenue segments of Dodla Dairy Ltd. include food products, sale of services and scrap metal for the year ending March 31, 2021.


Finance
For the quarter ended 30-06-2021, the company reported total consolidated income of Rs 514.65 crore, down -3.50% from last quarter in total income of Rs 533.34 crore and unchanged 0.00% over last year same quarter total income of Rs Crore. The company reported after-tax net profit of Rs 36.07 crore last quarter.

Justification of the investment
The brokerage models revenue and PAT CAGRs of 14.2% and 17.6%, respectively, in FY21-23E. We expect a RoE above 17% in FY23. The brokerage initiates a hedge on the stock with a note of BUY and a DCF-based target price of Rs700 (24x FY23E). Main risks: Delay in expanding distribution and purchasing, failure of some of the new products and potentially higher competitive intensity in South India.


Promoter / FII Holdings
The promoters held 62.5% of the company’s capital as of June 30, 2021, while the FIIs held 9.4%, the DII 9.3% and the public and others 18.8%.

(Disclaimer: The opinions and recommendations given in this section are those of the analysts and do not represent those of ETMarkets.com. Please consult your financial advisor before taking any position in any of the stocks mentioned.

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