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Dabur reported an impressive performance for 2QFY2012. Top-line growth was
strong at 30% yoy, marginally above our estimates, driven by a mix of volume
and value growth and recent acquisitions. Earnings grew by 8.4% yoy, in-line with
our estimates. We maintain our Accumulate recommendation on the stock.
Key highlights for the quarter: During the quarter, Dabur merged its
consumer healthcare division with the consumer care division to synergize
distribution. Dabur Lanka Pvt. Ltd., the wholly owned subsidiary of Dabur
International Ltd., was incorporated for setting up the new fruit juice facility
near Colombo (the company has plans to invest `70cr over two years).
In terms of organic growth, the domestic business grew by 11% yoy
and the international business excluding the recent acquisitions grew
by 22.8% yoy.
Outlook and valuation: Post 2QFY2012 results, we maintain our revenue and
earnings estimates. We expect the company to grow at a ~20% CAGR over
FY2011–13E, backed by its recent acquisitions. We have modeled in flat OPM for
FY2012E and FY2013E due to sustained gross margin pressure and upon higher
ad spends because of a stronger competitive environment. At the CMP, the stock
is trading at 22x FY2013E EPS. We maintain our Accumulate rating on the stock
with a target price of `115.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dabur reported an impressive performance for 2QFY2012. Top-line growth was
strong at 30% yoy, marginally above our estimates, driven by a mix of volume
and value growth and recent acquisitions. Earnings grew by 8.4% yoy, in-line with
our estimates. We maintain our Accumulate recommendation on the stock.
Key highlights for the quarter: During the quarter, Dabur merged its
consumer healthcare division with the consumer care division to synergize
distribution. Dabur Lanka Pvt. Ltd., the wholly owned subsidiary of Dabur
International Ltd., was incorporated for setting up the new fruit juice facility
near Colombo (the company has plans to invest `70cr over two years).
In terms of organic growth, the domestic business grew by 11% yoy
and the international business excluding the recent acquisitions grew
by 22.8% yoy.
Outlook and valuation: Post 2QFY2012 results, we maintain our revenue and
earnings estimates. We expect the company to grow at a ~20% CAGR over
FY2011–13E, backed by its recent acquisitions. We have modeled in flat OPM for
FY2012E and FY2013E due to sustained gross margin pressure and upon higher
ad spends because of a stronger competitive environment. At the CMP, the stock
is trading at 22x FY2013E EPS. We maintain our Accumulate rating on the stock
with a target price of `115.
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