Dabur India Q3 Results Review - Decent Performance; Maintain Buy: Yes Securities

Yes Securities Report

Dabur India Ltd.'s Q3 FY24 performance was in-line with expectation. The performance was decent especially in the current operating environment. Rural growth saw bounce back for Dabur and grew ahead of urban by 200 basis points on the back of moderating inflation, distribution infrastructure expansion and building of rural centric portfolio.

India fast-moving consumer goods volumes grew 6% (4% excluding inorganic) even while muted and delayed winter season had an impact on the Healthcare and Winter portfolio. Gross margin continues to improve as cost of goods sold saw deflation this quarter.

This is aiding Dabur deliver decent operating margin even after taking a hit from ‘Namaste’s’ legal cost regarding ongoing litigation.

The company has maintained its Ebitda margin guidance of ~19.5% for FY24, which means Q4 will see a stronger expansion versus previous quarters.

Improved commentary, better near-term earnings visibility and valuation comfort, makes us maintain our 'Buy' rating with a revised target price of Rs 650 (Rs 640 earlier).

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