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Dabur India share price gains up to 2% after Motilal Oswal gives buy call

Share price of Dabur India touched an intraday high of Rs 472 rising 1.84% against previous close of Rs 464

Dabur India share price gains up to 2% after Motilal Oswal upgrades to buy

Dabur India share price gained in trade today after brokerage Motilal Oswal upgraded the FMCG stock from  neutral to buy with  a target price of Rs 535. Share price of Dabur India touched an intraday high of Rs 472 rising 1.84% against previous close of Rs 464.  Dabur India stock stands higher than 5 day, 20 day, 50 day and 200 day moving averages but lower than 100 day moving averages. The stock closed marginally higher at Rs 465.75 on BSE.

Dabur India share has gained 16.29% in one year and risen 1.6% since the beginning of this year. Market cap of the firm rose to Rs 82,301 crore.

Total 2.07 lakh shares changed hands amounting to turnover of Rs 9.73 crore.

"The company has been re-energized with (a) renewed focus on the Ayurvedic healthcare products business (30% of FY20 domestic sales), (b) implementation of the power brand strategy leading to far sharper focus than in the past, (c) increasing appeal to the millennial through sampling, better communication and improved availability of Dabur's products, and (d) sharp pickup in pace of new launches (which was duly delivered on the launches front in FY20). Unveiling of plans to plug the gaps on direct reach and T&A are highly encouraging too," the brokerage said in a report.

"Dabur offers best visibility among peers in our coverage universe beyond 1QFY21 due to (a) its rural dependence (highest among domestic companies, barring Emami), and (b) large part of its portfolio being non-discretionary in nature. Thus, we upgrade the stock from Neutral to Buy with a target price of  Rs 535 (50x Jun'22E EPS)," Motilal Oswal said.

"Dabur, in our view, appears one of the most exciting investment opportunities in the Indian consumption space over the next 4-5 years with potential earnings growth of 15-20% CAGR," the brokerage added.

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.  

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.

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