Q3 FY21 Result and Concall Update - Dabur India - YES Securities

Industry-leading growth momentum continues led by oral care and healthcare; further re-rating potential intact

- View - Dabur continues to grow well ahead of peers for the second consecutive quarter given tailwinds for the healthcare space and strong performance in oral care. While healthcare trajectory can come off a bit, FY22 growth can be driven by a recovery in HPC and foods business. Despite RM headwinds, margins can continue improving with reduced promotions, calibrated price hikes and cost efficiencies. Dabur remains one of our top picks which we believe should move towards 45x FY23 P/E vs current multiple of 39x, indicating 15% upside.

- Result highlights - 18% India volume growth, 19.5% India revenue growth, 13% international growth, 16.5% EBITDA growth with 10bps margin improvement and 19% PAT growth; Healthcare grew 28%, HPC grew 16%, foods grew 5%; 120bps share gain in chyawanprash, 700bps share gain in honey, 28% growth in oral care with share gain of 120bps, 27% growth in shampoo, juices grew 8% ex-HORECA and culinary grew 16%; sharp 170ps in A&P supported growth, eCommerce now 6% of business with 150% growth, new launches contributed 4-5% in 3Q and 6% YTD.

- New launches performance - Sanitizers, surface cleaners, home hygiene products have not done well with reduced demand and commoditization; Products that did well include healthcare juices, health drops, hair oil variants, herbal toothpaste, pulling oil, e-commerce only products like baby range, vinegar.

- Margin outlook - RM prices are firming up across the board, will be passing on via calibrated price hikes, reduced promotions and some cost efficiencies will also help.

Shares of DABUR INDIA LTD. was last trading in BSE at Rs.515.25 as compared to the previous close of Rs. 527.6. The total number of shares traded during the day was 200429 in over 4134 trades.

The stock hit an intraday high of Rs. 532.25 and intraday low of 511.35. The net turnover during the day was Rs. 104767879.

Source : Equity Bulls

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