For the fourth quarter, Dabur’s revenue was flat on a year-on-year basis, while earnings before interest, taxes, depreciation, and amortisation (EBITDA) and net profit both declined by 8.5%. Domestic volume contracted by 3%, which was slightly better than the estimated decline of 4–6%.
Following the results, most analysts either downgraded the stock or reduced their price targets. However, the consensus target still suggests a potential upside of around 10% from current levels.
Of the 32 analysts that have coverage on Dabur India, 18 of them have a ‘Buy’ recommendation, while seven each have a ‘Hold’ and a ‘Sell’ recommendation on the stock.
Dabur India’s stock is currently trading at 37 times its estimated earnings for FY27. Given the absence of growth catalysts, brokerage firm Antique Stock Broking expects the stock’s valuation to continue de-rating.
Consequently, the brokerage has slashed its target price-to-earnings (P/E) multiple to 40 times FY27 estimated earnings per share (EPS), down from 45 times earlier. It has also downgraded the stock to ‘Hold’ and reduced its price target to ₹524 from ₹591 earlier.
According to Antique, Dabur’s Q4 performance remained under pressure and the company seems to be in a rationalisation mode. The brokerage believes that the company is facing headwinds both on the revenue and profitability front.
Going ahead, the company expects a gradual sequential recovery and margins to expand during FY26.
Morgan Stanley has maintained an ‘Underweight‘ rating on Dabur, with a target price of ₹396 per share.
The brokerage said that Dabur’s EBITDA margin fell to a 10-year low. India revenue declined 4% on urban consumption slowdown and inflationary pressures.
Home and Personal Care (HPC) segment growth turned negative, falling 3%, while the healthcare segment declined 5%. The beverages portfolio remained weak, with a 9% drop.
Badshah Masala reported 6% growth in Q4, down from 16% in Q3 due to a slowdown in Canteen Stores Department (CSD) sales.
Nuvama Institutional Equities has retained a ‘Buy’ rating on Dabur, but revised its price target lower to ₹615 from ₹635 earlier.
Citing sluggish urban demand, continued underperformance in the HPC segment due to a high base, weaker healthcare sales impacted by a delayed winter, and soft performance in the beverages segment due to a weak season, Nuvama has cut its FY26 and FY27 earnings per share estimates by 4.8% and 3%, respectively.
Emkay Global has retained a ‘Reduce‘ rating on Dabur India, with an unchanged price target of ₹450, as the brokerage sees weak business execution.
The management, in consultation with McKinsey, has refreshed the company’s vision, with focus now on seven structural initiatives. On the back of these initiatives, the management aspires to achieve double-digit revenue CAGR over FY25-28E.
Dabur India shares are currently trading 1.27% lower at ₹476. The stock opened 4% lower today but has recovered more than 3% from its intraday low of ₹461.1.
