Dabur remains a top pick in the Consumer Goods sector for Emkay Global due to its diversified portfolio and strong execution. The company’s focus on rural growth remains firm, with distribution expansion showing robust progress. Dabur’s strategy of expanding the Total Addressable Market (TAM) across brands with well-supported category extensions through distribution and marketing continues to yield positive results. Emkay Global maintains a BUY rating on Dabur, with a target price of ₹700 per share by June 2025, based on a 46x P/E multiple. The brokerage expects Dabur to achieve a compound annual growth rate (CAGR) of 10% in sales and 15 per cent in earnings over FY24-27.

Q1FY25 expectations

Dabur’s topline is expected to grow by 6%, with mid-single-digit volume growth in domestic operations. Gross margin is anticipated to expand by 90 basis points year-on-year (YoY) to 47.5 per cent. EBITDA expansion is expected to be limited to 20 basis points YoY, reaching 19.5%, due to increased spending on advertising and promotion (A&P), which is projected to rise by 18 per cent.

DART’s perspective

DART has a slightly different take on Dabur’s performance. On a consolidated basis, DART assumes approximately 7% revenue growth, aligning with the company’s guidance. Margins are expected to improve YoY to 19.6 per cent. At the current market price, the stock is trading at 43x FY26E EPS. DART currently holds an “Accumulate” rating on Dabur.

Both Emkay Global and DART highlight Dabur’s strong position in the Consumer Goods sector, with particular emphasis on rural growth and strategic category extensions. While Emkay Global projects robust long-term growth with a BUY rating, DART provides a more conservative outlook with an accumulate rating, acknowledging steady revenue growth and margin improvements.

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