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What's behind the rally in Dabur India share despite 24% fall in Q4 net profit

Share price of Dabur India touched an intraday high of Rs 447.05  rising 4.27% against previous close of Rs 428.75

Aseem Thapliyal Last Updated: May 28, 2020 | 14:34 IST
What's behind the rally in Dabur India share despite 24% fall in Q4 net profit
Dabur India share has gained 11.54% in one year but lost 2.89% since the beginning of this year. Market cap of the firm rose to Rs 78,386 crore

Dabur India share price gained in early trade today despite the FMCG firm recording a 24.1%  fall in its Q4 profit. Share price of Dabur India touched an intraday high of Rs 447.05  rising 4.27% against previous close of Rs 428.75. Dabur India stock is trading higher than 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.

Dabur India share has gained 11.54% in one year but lost 2.89% since the beginning of this year. Market cap of the firm rose to Rs 78,386 crore.

At 1: 55 pm, the stock was trading 3.74% higher at Rs 444.80.

Brokerages were positive about the prospects of the company's share after Q4 earnings poured in. Dabur India reported a 24 per cent fall in consolidated net profit at Rs 281.6 crore against Rs 370.43 crore in Q4 FY19. Consolidated revenue for the quarter declined 12.35% to Rs 1,865 crore against Rs 2,128 crore a year ago. The company's consolidated EBITDA fell by 18.2 per cent to Rs 428.1 crore in Q4 FY20 from Rs 523.3 crore in the same quarter previous year. 

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Earnings per share fell 24.29% to Rs 1.59 in Q4 of last fiscal compared to Rs 2.10 in the corresponding quarter of FY 19.

Jefferies said the firm faced severe challenges in Q4 and missed forecasts comprehensively. The 15% decline in domestic volumes is among worst in its history. The brokerage maintained Buy call on the stock paring target price to Rs 500 from Rs 552. It cut FY21-22 EPS estimates of the firm by 2-3%.

Credit Suisse also cut its target price to  Rs 475 from Rs 500 after the Q4 earnings. It said, "Pre-COVID growth was at 6%. Healthcare portfolio of the firm is well positioned to gain post-COVID. International business did relatively better in Q4. Management sees further Rs 400-450 crore revenue impact in first quarter of FY21.

UBS said the firm missed Q4FY20 estimates. Herbal could be growth driver in FY21. Domestic revenue declined 17.3% YoY with 14.6%YoY vol decline. The brokerage sees 53.5% of Dabur's domestic business as tailwind segments. It gave a buy call on the stock with a target price of Rs 540.

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