Dabur Q3 Results Review - Distribution Expansion Driving Share Gains: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Dabur India Ltd.’s numbers were in-line with our expectations with revenue growth of 7% YoY and domestic volume growth of 6% (4% organic). International business grew strongly by 11.7% with 3% growth in healthcare, 6.6% in home and personal care and 6.7% in food and beverage. Sharp gross margin expansion of 310 basis points led by softening of inflation and superior segment mix was invested in higher advertising and promotion spends (up 36.1% YoY) and legal costs on the U.S. entity litigation (15 bps of revenue) resulted in Ebitda margin expansion of only 48 bps to 20.5%..Both HPC and healthcare should grow in high single-digits in FY24 with continued share gains, product innovation and expanding distribution reach. Food and beverage should revert to mid-teens growth in FY25 after a soft FY24 with aggressive portfolio expansion in both foods and beverages. Moderation in inflation and distribution restructuring in international markets should drive double-digit growth there as well. Margins should stay below 20% for FY24 despite a superior segment mix given the expected pick up in A&P spends and the U.S. litigation costs. We introduce our FY26 estimates and roll over our valuation to FY26. Considering the aggression shown in extending product categories and distribution expansion driving share gains across categories, we build in 10%/13.4% revenue/profit after tax compound annual growth rate over FY23-26E and upgrade our rating to 'Buy', with a revised target price of Rs 630 (earlier Rs 570), based on 45 times FY25E earnings, in-line with other HPC peers. The upgrade now makes Dabur our top HPC pick given improving execution, aggressive innovation, strong margin expansion potential and opportunities in healthcare, rural markets and possible merger and acquisition..Click on the attachment to read the full report:.Dabur Q3 Results: Profit Up 6.2%, Margin Expands Slightly.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Dabur Q3 Results Review - Distribution Expansion Driving Share Gains: Systematix

Margins to move up despite US litigation; upgrade to Buy

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Dabur Q3 Results Review - Distribution Expansion Driving Share Gains: Systematix

Margins to move up despite US litigation; upgrade to Buy

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