Dabur India shares hit new record on strong growth outlook
Dabur India shares hit a record high of Rs 587.95 after jumping 3% on BSE in intraday trade on Thursday, breaking its previous record of Rs 582.70, hit on June 16, 2021.
Consumer goods company (FMCG) stock has outperformed the market in the past month, rebounding nearly 9%, in hopes of improving operational performance. In comparison, the S&P BSE Sensex only added 0.9% during the period.
Dabur India, the leader in Fast Turning Consumer Goods (FMCG), announced on June 23 that it will set up a new factory in Madhya Pradesh with a total investment estimated at Rs 550 crore. The company has already secured a 51-acre plot of land and has started construction work on the initial phase, which is expected to be completed in the current fiscal year. In addition to the recently launched Production Linked Incentive (PLI) program for the food processing sector by the Union government, Dabur took advantage of the state government’s Mega Projects program to materialize its plan.
Dabur India’s FMCG portfolio includes nine powerful brands: Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara and Dabur Lal Tail in healthcare; Dabur Amla, Dabur Red Paste and Vatika in the Personal Care space; and Réal in the Food category.
“Dabur India health products are expected to experience strong performance over the medium term as customers focus on boosting immunity and healthy lifestyles. The rural segment is less likely to be affected by the foreclosure with the support of government stimulus measures. robust demand, ”said a Geojit Financial Services analyst in a March quarterly results update (T4FY21).
The company’s performance at T4FY21 was partially affected by the low level of storage, while secondary sales growth was better. However, despite the low impact of stocks, the sequential slowdown in health has been significant. While the June quarter (Q1FY22) may boost healthcare growth again, concerns remain about a post-pandemic slowdown. Management is targeting low single-digit growth in health supplements for fiscal 22.
“Management hopes to protect margins with pricing actions and cost reduction programs. Further price increases in the first quarter and some moderation in input prices should improve margins sequentially. Our forecast includes margin gains of 120 basis points over fiscal years 22-23, ”analyst at Emkay Global Financial Service said in the results update.