Dabur share price gains as brokerages maintain bullish view after Q4 results; Should you buy the stock?

Dabur share price gained over 2% on Friday after the company reported decent earnings for the fourth quarter of FY24 with improving volume trajectory and a price hike benefitting revenue. Dabur shares rose 2.51% to ₹537.50 apiece on the BSE.

Dabur India posted a consolidated net profit of ₹341.22 crore for the quarter ended March 2024, recording a growth of 16.5% from ₹292.76 crore in the year-ago quarter.

The FMCG major’s revenue Q4FY24 rose 5.11% to ₹2,814.64 crore from ₹2,677.80 crore, YoY.  

Dabur has given a cautiously optimistic outlook for FY25 led by 8% growth in rural sales, strong performance across oral care, Home care with market share gain across categories and innovations and distribution led gains. The company expects volume/realization growth to enable high single-digit to low double-digit sales growth with calibrated margin expansion. 

Read here: Dabur sees early signs of rural recovery, enters talcum powder market

Brokerages maintained their bullish view on Dabur India led by sustained market share growth, rural recovery, growth in beverages business, initiatives around distribution, new launches, and marketing spend.

Here’s what brokerages have to say about Dabur Q4 results and Dabur share price:

Prabhudas Lilladher

Prabhudas Lilladher believes harsh summer will provide tailwind to Dabur’s juices, drinks, Glucon-D products while normal monsoons will boost rural demand and tame inflation. It expects sustained innovation, premiumisation and launches in core segments like Healthcare, oral care & HPC will help sustain double-digit growth. 

The brokerage firm increases its FY25 and FY26 earnings per share (EPS) estimates by 1.4% and 1.8% and estimates 12.8% EPS CAGR over FY24-26. It retained ‘Accumulate’ rating for moderate returns and raised Dabur share price target to ₹563 from ₹535 earlier.

Emkay Global Financial Services

Amid a muted demand setting, Emkay Global Financial Services believes Dabur’s thrust on enhancing its distribution has been rewarding, with 95% of the portfolio seeing market share gains and better growth in rural. 

It said Q4 topline growth at 5% was in-line, and a better than expected margin aided the EBITDA and earnings beat of 6% and 7%.

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Dabur remains one of Emkay Global’s preferred picks in the sector, given its diversified portfolio and better execution. The company’s thrust on Rural remains firm and, with distribution expansion, it continues to report better growth. Unlike peers, Dabur sustains market share gains in most of its portfolio (95%) which will be rewarding in recovery, it said.

The brokerage firm maintained a ‘Buy’ rating on Dabur shares with an unchanged March-2025 target price of ₹660 per share.

Motilal Oswal Financial Services

Unlike other FMCG companies, Dabur has consistently witnessed a higher rural growth compared to urban regions. With improving volume trajectory and no price-cut impact on revenue (unlike peers), we expect revenue growth outperformance to sustain in the near term, Motilal Oswal said. 

It believes the operating margin also has a scope for improvement in the medium term, hovering around the ~20% band, over the last eight to nine years (unlike peers that enjoyed expansion). 

The brokerage reiterated its ‘Buy’ rating on Dabur shares with a target price of ₹650 apiece. Dabur is Motilal Oswal’s top pick in the staple space. 

Read Titan Results Live Updates here 

Nuvama Institutional Equities

Dabur’s Q4FY24 EBITDA and PAT beat Nuvama’s estimates while revenue came in-line. Rural grew 8% YoY and urban 4% YoY, which drove overall domestic volume growth of 4.2% YoY. 

In our view, a good rural recovery following a likely strong monsoon this year shall benefit Dabur (~40% rural salience) while a harsh summer would invigorate its juice business in Q1FY25. That said, we are trimming FY25E and FY26E EPS estimates by 5% and 5% to build in higher A&P spends, Nuvama said.

The brokerage retained its ‘buy’ call and cut Dabur share price target to ₹640 from ₹680 earlier.

At 11:15 am, Dabur shares were trading 1.35% higher at ₹531.40 apiece on the BSE.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.