Shares of FMCG major Dabur rose today, April 16 as UBS has upgraded the rating and revised target price, while highlighting bottomed valuations and the need to sustain growth.<\/p>\n
In its recent note, the brokerage has upgraded Dabur shares to ‘Neutral’ rating from ‘Sell,’ while setting a target price of Rs 490, marking a 13% upside from the previous closing price of Rs 433.35.<\/p>\n
Dabur shares advanced 1.88% intraday to Rs 441.4 \u00a0apiece. The scrip was trading 0.13% higher by 11:08 a.m. The benchmark NSE Nifty 50 was up 0.34%.<\/p>\n
ALSO READ:\u00a0Why Wipro’s Q4 Results Matter<\/a><\/p>\n Out of the laggards in India consumer sector, Dabur stands out with the stock down around 20% in the past five years, along with a low single-digit earnings CAGR in the same period. The question arises on Dabur’s valuation given the recent high single or double-digit sales growth in home and personal care, and bottoming out of decline in beverage, following a price led disruption. According to UBS, a revival to even high-single-digit growth is unlikely to trigger a material valuation re-rating, limiting upside and supporting the ‘Neutral’ rating.<\/p>\n What does Q4FY26 update reflect?<\/p>\n As per Q4FY26 update by Dabur, the domestic business grew by a high single digit rate. Sales in the home and personal care sector rose by double digits, led by hair oil, shampoo and other home-care products.\u00a0<\/p>\n The note said that this segment can continue to fuel high-single-digit growth in FY27 as well. In the healthcare segment, Honey, Honitus and Hajmola sales surged by double digits, while seasonal weakness in Glucose and Chyawanprash led to low-single-digit segment sales growth in the fourth quarter. However, the brokerage estimates that the growth can accelerate in FY27.\u00a0<\/p>\n For food and beverages, revenue rose in low single digits, despite over 20% growth in foods, Real Activ juices and coconut water, however, the weakness is past its worst, the note said.<\/p>\n In terms of international business, the performance was mixed, weighed down bye the Middle East disruption, while Turkey, Bangladesh and the UK posted double-digit sales growth. The revenue is expected to grow in single digits in Q4, with a growth EBITDA. For FY27, UBS estimates that consolidated revenue and EBITDA will grow by 8.3%.<\/p>\n ALSO READ:\u00a0Nuvoco Vistas Shares In Focus As Systematix Cuts Target Price After Q4 Results \u2014 Check Potential Upside<\/a><\/p>\n \n Essential Business<\/a> Intelligence,
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