A leading FMCG player witnessed a 7.7% drop in stock price following a downgrade by major brokerage firms, citing a decline in revenue for Q2 FY25.
Share price variations:
With a market capitalization of Rs. 1,03,582.74 crores, Dabur India Limited opened the trading session at Rs. 580.35, below 6.24% from Tuesday’s close of Rs. 619. The stock reached an intraday low of Rs. 571.00, reflecting a 7.7% decrease from previous close and at 12:43 pm the stock was trading for Rs. 582.15 a piece.
Reason for the Fall:
Dabur India Limited’s stock declined after major brokerage houses, including CitiBank, Macquarie Group, and Emkay Global, downgraded the stock. These downgrades followed Dabur’s announcement that extreme weather events, such as floods and heavy rains, had adversely impacted consumption and consumer offtake, leading the management to anticipate a mid-single-digit decline in consolidated revenue for Q2 FY25.
CitiBank issued a sell call, lowering its price target to ₹570 per share, representing an 8% downside from Tuesday’s close. Macquarie also cut its target price to ₹560, a 9.5% downside from Tuesday’s close. Emkay Global downgraded its rating from ‘buy’ to ‘add,’ reducing its target price to ₹650 per share, down from ₹750 earlier.
Recent Updates
In August the company signed a MoU with the government of Tamil Nadu to set up a new manufacturing facility for Rs 400 crores over a period of 5 years.
Product Portfolio:
Ranked among the top four FMCG companies in India, Dabur operates 22 manufacturing facilities. The company derives 48.6% of its revenue from its Home and Personal Care segment, 31.4% from Healthcare products, and 20% from Food and Beverages. Of this, 69.8% of revenue comes from domestic markets, while 24.8% is generated through exports.
Their FMCG portfolio includes five flagship brands with distinct brand identities, ‘Dabur’ as the master brand for natural healthcare products, Vatika for premium personal care, Hajmola for digestives, Real for fruit juices and beverages and Fem for fairness bleaches and skin care products.
Financial Performance:
For Q1FY25 the company reported a net profit increase of 8.26% to Rs. 494.35 crores compared to net profit of Rs. 456.61 crores in Q1FY24, while revenue from operations also marked an increase by 6.98% to Rs. 3,349.11 crores from Rs. 3,130.47 crores in comparison to the same period. Company has a ROE of 19.23% and ROCE of 23.07% in FY24.
About the company:
Dabur India Ltd is one of the leading FMCG Companies in India and a global leader in Ayurveda with a portfolio of over 250 Herbal and Ayurvedic products. The Company operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods.
The company has a wide distribution network, covering 6 million retail outlets with a high penetration in both urban and rural markets. Their products also have a huge presence in overseas markets and are available in over 120 countries across the globe. Their brands are highly popular in the Middle East, SAARC countries, Africa, US, Europe and Russia.
Written By Joseph Pv
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