Neutral Dabur; target of Rs 425: Motilal Oswal

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Core brand energization: Dabur plans to increase A&P spends by 150bp to support its core brands, including Real, Honey, Amla, Chyawanprash, Red, and Odonil.
  • High-growth platforms: The company will focus on scaling its high-growth platforms in OTC & digestives, skin care, home care, and foods.
  • Operational efficiencies: Dabur aims to improve its operational efficiencies through programs like Saksham, Samriddhi, and IRIS, targeting savings of 1.5x the first half of Vision VII.
  • Premiumization: The company targets a premium portfolio contribution of 23% by FY28, up from 20% in 1HFY27, with a focus on health and wellness products.

Thesis Validation Checklist

  • Volume growth: Monitor Dabur's volume growth, which is expected to be in the mid-to-high single digits over FY26-29.
  • Premium mix: Track the company's premium portfolio contribution, which is expected to rise to 23% by FY28.
  • Operating margins: Watch for improvements in operating margins, which are expected to recover gradually through calibrated pricing, premiumization, and productivity gains.
  • GTM 2.0: Monitor the progress of Dabur's GTM 2.0 initiative, which aims to improve the quality of distribution and reduce costs.