Dabur Q1 Results Review - Rural Recovery Drives Robust Constant Currency Growth; Maintain Buy: Yes Securities

Yes Securities Report

Dabur India Ltd. Q1 FY25 result highlights sequential recovery in volume growth, driven by rural markets. With rural footprint of more than 122,000 villages now for Dabur, rural growth outpaced urban growth by 350 basis points in Q1 FY25.

The fact that rural growth has not slackened in July 2024, gives confidence of improvement in domestic FMCG volume growth even going forward.

Consolidated constant currency growth stood at 9.8% but translated Rs growth continued to be impacted by severe currency depreciation in Turkey and Egypt.

Within domestic categories, apart from beverages (nectars portfolio impacted by harsh summers and price cuts in cola by peers), hair oil and over-the-counter and ethicals (impacted by high base), rest of portfolio saw robust growth.

Dabur has been our preferred top pick for FY25 within the FMCG pack and has now delivered ~27% return in past three months.

We continue to remain positive on rural driven volume growth improvement and believe Dabur with ~45% rural mix should benefit more relatively.

We maintain our Buy rating with a revised target price of Rs 765 (Rs 665).

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