Shares of Dabur India fell more than 4% on Thursday even after the FMCG major reported Q1 earnings broadly in line with estimates, with brokerages highlighting key factors investors should watch out for now.

Dabur shares dropped to Rs 415.55 apiece on NSE on Thursday amid an overall muted market sentiment. The company on Wednesday reported a 15% YoY rise in consolidated net profit to Rs 591 crore for the April-June quarter of FY27, marking its third straight quarter of double-digit profit growth, helped by price increases, cost control and broad-based growth across its FMCG portfolio.

Consolidated revenue rose 11% year-on-year (YoY) to Rs 3,761 crore, while India FMCG business grew 9.5% with underlying volume growth of 5%. Operating profit grew 11% during the quarter.

The company stated that Q1 was marked by inflationary pressure, geopolitical uncertainty in the MENA region and volatile commodity prices. It said disciplined cost management under Project Samriddhi, operating efficiencies and selective price increases helped protect profitability.

“Dabur expects a double-digit consolidated revenue growth in FY27 along with improvement in margins. Management expects revenue growth to be supported by a slightly higher mix of pricing. Resilient rural demand, coupled with signs of improving urban demand, bodes well for Dabur's growth outlook. However, the pace of demand recovery, commodity inflation and the progress of the monsoon (including any El Nino-related risks) remain key monitorables for FY27,” the domestic brokerage noted.

Also Read | Dabur Q1 Results: Profit rises 15% to Rs 591 crore; revenue up 11%

JM Financial on Dabur share price

JM Financial noted that Dabur’s Q1 earnings were largely in-line with its estimates. The company’s guidance on FY27 is largely unchanged – low double-digit sales growth led by stable volumes and improved pricing growth. On profitability, while input costs remain inflationary, management targets to drive EBITDA growth ahead of topline through price hikes and cost-saving initiatives, it added.

The domestic brokerage upgraded its FY27 EPS estimate by 3%, factoring in slightly better margins versus FY26, while it kept FY28 forecast unchanged. It believes that valuation is inexpensive and restricts the downside; but rerating to the long-term average will be contingent on more consistent delivery and outperformance versus staples peers, especially on the revenue front.

JM Financial maintained its ‘Add’ call on the shares of Dabur, but reduced its target price to Rs 490 apiece from Rs 505 apiece. The latest target price implies around 13% upside potential.

Equirus on Dabur share price

Equirus Securities noted that Dabur’s operating momentum continues to strengthen, supported by hair care, oral care and foods, an improving mix, resilient rural demand and market-share gains. Near-term volume growth could remain moderated by inflation-led pricing, but the company’s diversified portfolio, strong brand franchise, healthy cash generation and disciplined capital allocation support our positive view, it said.

Following the recent correction, risk-reward has turned favourable despite a lower target multiple of 36x, according to the brokerage which has an ‘Add’ rating on the shares of Dabur with a target price of Rs 474 apiece, implying 9% upside potential.

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