On Tuesday, the shares of FMCG major Dabur India Ltd tanked over 1 per cent to hit a new 52-week low of Rs 499.35 on BSE. The stock has been on a downward trend ever since the company posted earnings for the quarter ended March 2022.
The shares have declined over 10 per cent in the past one week after the company reported a lower-than-expected set of numbers for the March quarter.
Dabur reported a consolidated net profit of Rs 294.34 crore, declining 22 per cent, in the quarter ending March 2022. The company had posted a net profit of Rs 377.29 crore in the year-ago period.
The company's consolidated revenue from operations rose 7.7 per cent to Rs 2,517.81 crore in the quarter under preview as against Rs 2,337 crore a year ago, while the total income for the quarter increased to Rs 2,616.95 versus Rs 2,421.77 in the same quarter last fiscal.
Nirmal Bang mentioned that Dabur’s 4QFY22 performance was below our expectations on all fronts. The operating environment remained challenging with inflation of 16 per cent in 4QFY22 and subdued consumer sentiments, especially in the hinterlands.
"The stock now trades at 46x/40.5x FY23E/FY24E EPS as we build in 12.5% EPS CAGR over FY22- 24E. We value the company at ~48x March’24E EPS (based on strong execution, ahead-of-the-market growth in a difficult environment and addition of new categories) and arrive at a revised target price (TP) of Rs 630 (Rs670 earlier), implying an upside of 19 per cent from CMP. We thus maintain our Buy rating on Dabur," the brokerage house added.
"Considering FY22 performance and inflation we cut FY23E/FY24E earnings by 6.0% and retain BUY, with a revised DCF-based target price of Rs 650 (47.4x FY24E EPS)," Centrum Broking said.
"We reckon superlative efforts, with focus on building capabilities and driving rural penetration for its focus brands could lead to sustained volume growth momentum," it added.
IDBI Capital noted that 4QFY22 result was below our estimates due to higher than estimated cost pressure. It highlighted that the company will have to take 7-8 per cent more price hike to address current inflation.
"As per revised business outlook; we have marginally trimmed our EPS estimates. We value DABUR at 50x FY24E EPS. We maintain BUY with a revised target price of Rs 672," it said.
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