MOSL: DABUR (Buy)-Result better than expected; margin headwinds lesser than peers
DABUR: Result better than expected; margin headwinds lesser than peers
(DABUR IN, Mkt Cap USD14.2b, CMP INR598, TP INR705, 18% Upside, Buy)
- Driven by very strong growth in HPC and more so in F&B, DABUR’s 2QFY22 result comfortably beat our sales growth forecasts, even as Healthcare sales, as expected, slowed down on the back of a high base.
- Healthcare sales posted a 19% CAGR over a two-year period, and its medium-term prospects are attractive.
- Consolidated sales/volume growth of 12%/10% YoY in 2QFY22 on a growth of 14%/17% in the base quarter is truly remarkable. Gross/EBITDA margin was ahead of our expectation, leading to a double-digit beat on our operating profit estimate.
- From a near-term perspective, two factors distinguish DABUR from other Staples peers: a) its better performance and outlook on rural India, and b) dominant market share in its key categories, leading to a superior ability to pass on the ongoing material cost inflation. The company has taken requisite price increases in nearly 90% of its portfolio.
- Good visibility v/s its peers on near-term topline and earnings, and a healthy long-term earnings opportunity deserves premium multiples. We maintain our Buy
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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