Dabur India: SEBI RA Rajneesh Sharma Sees 11% Potential Upside Despite Lackluster Q1 Earnings

Dabur India shares are up for a third straight session, trading 1.6% higher at ₹537.2 in afternoon trade.

The FMCG giant posted modest Q1 numbers, with consolidated net profit rising 2.8 % to ₹513.91 crore, while revenue from operations saw a 1.7% growth to ₹3,404.58 crore.

Q1 Highlights

Topline figures were impacted by a steep fall in seasonal beverages due to unseasonal rains, said SEBI-registered analyst Rajneesh Sharma. 

EBITDA margins held steady at 23.8%, showcasing disciplined cost control. Its international business continued to shine, growing 13.7% in constant currency, far outpacing domestic growth, Sharma added.

Dabur's power brands like Chyawanprash, Honey, and Honitus posted double-digit growth, while rural demand outpaced urban for the fifth straight quarter. The company also expanded its reach to 1.52 million outlets and gained market share across 95% of its portfolio. 

Dabur's valuation also remains balanced at around 54x P/E and 8.5x P/BV, both of which are below long-term averages, Sharma noted.

Technical Analysis

Dabur India's stock is trading near the top of a two-year falling wedge pattern on the weekly chart, with ₹536 emerging as a key breakout level, the analyst said. Multiple rejections at this trendline hint at built-up pressure. 

Trend indicators such as the relative strength index (RSI) are flashing bullish divergence and signaling a potential reversal. If price breaks out above ₹536 with volume confirmation, a sharp move toward ₹599 and higher cannot be ruled out, Sharma said.

Retail sentiment on Stocktwits remained 'bearish' amid 'high' message volumes. It was 'neutral' a week ago.

Year-to-date, the stock has gained around 6%.

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