Dabur shares: Emkay Global raises target price to ₹700 as management remains upbeat on consumption revival

Estimated read time 10 min read

Dabur India’s management has been upbeat on consumption revival with confidence on execution. The company is seen benefiting from consumption recovery, along with steady distribution expansion, healthy portfolio category coverage, sustained thrust on innovation, and liquidity in place for bolt-on, analysts said.

Dabur shares have been Emkay Global’s preferred consumption pick given its relatively higher share of rural, diversified portfolios and its sustained thrust on NPDs. The brokerage firm has raised Dabur share price target to 700 per share from 660 earlier, and has a ‘Buy’ rating on the stock.

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“Dabur remains one of our preferred picks in the sector, given its diversified portfolio and better execution. The recent run-up in the stock partially factors in its potential demand recovery. We see Dabur well placed for any recovery in consumption,” said Nitin Gupta, Senior Research Analyst, Emkay Global Financial Services.

Dabur sees merit in network expansion, as margin dilution in rural areas has been limited – this provides the company with the first mover advantage. 

Portfolio executions have not yielded any material outcome in the past due to subdued demand but are likely to benefit from the expected demand recovery, Gupta said.

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“Dabur has been expanding its total addressable market (TAM) across brands with category extensions, which are backed well by distribution and marketing. In the last couple of years, some innovations have not seen scale-up, given correction in the marketing budget, but these would be supported ahead with higher allocations,” Gupta added.

According to him, with digitization in place, Dabur India is well placed to leverage shelf space at the store. 

Dabur share price has risen over 9% in one month and more nearly 15% in the past three months. Dabur shares have gained over 9% year-to-date (YTD).

On Friday, Dabur shares ended 0.16% lower at 608.60 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.

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Published: 17 Jun 2024, 01:01 PM IST

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