DABUR India (DABUR) 1QFY22 result was above our estimates. DABUR continued to post strong growth and market share gains across all key verticals; Health Care, Home Care, Personal Care and Foods. Health Care witnessed some moderation in demand especially for health supplements compared to previous quarters, but tailwinds still persists and DABUR continues to gain market share from competition.
Revenue growth in HPC and Foods portfolio is tracking well; aggressive product launches and strong market share gains are healthy signs. Urban market grew at higher rate compared to rural due to COVID-impacted base quarter.
Commenting on the result review, IDBI Capital said, "Positively, international business continues to post strong recovery. Contraction in gross margin due to rapid rise in raw material price is concerning. However, DABUR did take 3% price hike in 1QFY22 and guides for another round of price hike in 3QFY22 if inflation continues to rise. Management guidance on being able to maintain operating profit margin despite pressure on gross margin is comforting. We upgrade our rating on DABUR to BUY with a revised TP of Rs 722."
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