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Shares of Dabur India Ltd. are trading with losses of over 4% on Monday, January 6. In its quarterly business update, the FMCG major said its consolidated revenue might grow in low single digits for the December quarter. Dabur also expects profit growth to remain flat on a year-on-year basis.
Global brokerage firm Morgan Stanley has an 'Equal-Weight' rating on Dabur, with a price target of ₹531 per share, which suggests a further upside of 5% from the stock's current levels.
Dabur's third-quarter update showed sequential improvement but still reflected low single-digit revenue growth. The consolidated EBITDA is expected to report flat growth, slightly below estimates.
Management anticipates sequential improvement in demand in the coming quarters. Morgan Stanley, in its note, highlighted that the company's focus remains on driving market share gains, brand building, and profitable growth.
For the October-December period, rural consumption remained resilient and continued to grow faster than the urban markets. "While general trade was still under pressure, alternative channels like modern trade, e-commerce, and quick commerce continued to post strong growth."
The FMCG major also spoke of inflationary pressure that was witnessed in some of its business segments, which it mitigated partially through price increases and cost-efficiency initiatives.
How Dabur's business segments are likely to fare in the quarter:
Home and Personal Care: Expected to grow in mid-to-high single digits
Health Care: May remain flat due to the delayed winter onset.
Beverages: Performance likely to remain muted
Hommade and Badshah: Continued to do well during the quarter and may see strong double-digit growth.
Dabur's international business may grow in double digits in constant currency terms, led by strong momentum in Middle East and North Africa (MENA) region, Egypt, Bangladesh and the US.
Going forward, Dabur anticipates FMCG growth to improve sequentially and intends to focus on enhancing its market share within the portfolio.
Shares of Dabur India Ltd. are trading with losses of 3.79% at ₹505. The stock has declined 25% from its recent peak of ₹672.
