The share price of Dabur India gained over 3 percent on Friday after the company reported better than expected earnings for the first quarter of fiscal 2021. The stock rose as much as 3.92 percent in the early trade to hit an intraday high of Rs 511.95 per share on the BSE.
Soon, the stock pared gains marginally, trading 3.53 percent higher at Rs 510.00 per share, at 10:28 am.
Dabur India reported a 5.9 percent fall in net profit at Rs 341.8 crore for the quarter ended June 2020 crore as against Rs 363.1 crore in the same period last year. The profit, however, beat the CNBC-TV18 poll estimate of Rs 330 crore.
Revenue during the quarter declined 12.9 percent to Rs 1,980 crore from Rs 2,273.3 crore, YoY. Revenue too was higher than estimates of Rs 1,975 crore.
Dabur's domestic volume in Q1FY21 fell at 9.7 percent versus expectations of 14-15 percent decline.
Among products, Dabur Chyawanprash reported a growth of over 694 percent during the quarter, while Dabur Honitus grew by over 80 percent. Dabur Honey ended Q1 2020-21 with a growth of over 60 percent.
According to CLSA, Dabur has shown agility and dynamism not only in recovering operations but also in aligning the portfolio to the current theme. This has aided share gains across categories and extracted an extra 6 percent of growth, it said.
The quarter saw the new products' record sales of over Rs 100 crore.
CLSA believes a surge in new product development (NPD) was the result of an accelerated execution plan in healthcare and addressing hygiene needs. With 40-50 percent success expectation, NPDs should aid 3-4 percent YoY growth, it said.
The brokerage maintained a 'Buy' rating on the stock and raised the target to Rs 590 from Rs 565 earlier. It also increased its EPS estimates by 4 percent.
During the quarter ended June, Dabur introduced a record number of new products and variants anchored on the consumer need for health, immunity and hygiene.
Brokerage firm Citi believes tailwinds in the healthcare portfolio could sustain for the foreseeable future and sees pick-up in categories like juices and certain HPC segments.
Citi has maintained a 'Buy' rating with a target price of Rs 495 per share. In the pecking order, Citi puts Dabur below names like Britannia, Godrej Consumer Products, and Marico.
Credit Suisse is positive on Dabur’s transformation journey into a more innovation-focused company and expects major changes in the distribution system of the company.
Credit Suisse maintained 'Outperform' call and raised the target to Rs 520 from Rs 475 per share earlier.