MOSL: DABUR (Neutral) - A route back to the roots!
Dabur: A route back to the roots!
(DABUR IN, Mkt Cap USD10.9b, CMP INR441, TP INR425, 4% Downside, Neutral)
We attended Dabur’s (DABUR) analyst meet, where the company threw light on various key topics. Key highlights:
- The new CEO has intuited the need to get back to the core – Ayurveda – after a spin of wheel toward non-core over the last 15 years. India’s Ministry of Ayush too is drawing a parallel between traditional remedies and wellness, reinforcing the idea of Ayurveda. The recent success of Patanjali/Himalaya in a few categories is also indicative of consumers’ increasing preference for herbal products. DABUR is well poised to capitalize on these trends with its longer pedigree, better sourcing and access to a wider set of manuscripts unlike herbal peers. Even HPC and food innovations will have a herbal focus wherever possible.
- The company cited that the ongoing quarter remains challenging but retained its guidance of mid-to-high single-digit volume growth for the remaining nine months of FY20. Given weak industry growth and intensifying competition, below-the-line spends will be much higher than envisaged at the beginning of the year.
- DABUR has identified a few power brands where spends can grow by 12-15%, even if overall ad spends increase at only 6-7%.
Dabur India is engaged in manufacturing, marketing and distributing consumer goods and its related products. Co.'s products include hair care, oral care, health supplements, digestives and candies, baby and skin care, fruit juices, cooking pastes and sauces. Co.'s brand names include Dabur, Asavs, Classicals, Dabur Shilajit, Naturecare, Shankhpushpi, Honitus and Ring Ring. Co. operates three business divisions: Consumer Care Division, Consumer Healthcare Division and the wholly owned subsidiary, Dabur Foods Limited.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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