Published on 29/06/2019 9:36:58 AM | Source: Emkay Global Financial Services Ltd

Hold Dabur India Ltd For Target Rs.415 - Emkay Global

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Betting on new initiatives

* We interacted with Dabur's CEO, Mohit Malhotra, who highlighted the company's new initiatives to improve growth including more focused spends behind core brands to scale them, consistency in new launches, greater focus on volume shares and cost savings.

* It also plans to widen direct reach more aggressively, which currently stands at 1.2mn outlets; will go deeper in rural, while will consolidate distributors in urban. Also aims to broaden presence in e-com and modern trade (MT) with specific new launches.

* Growth in its organic international business has been affected by lower crude prices, but it now expects to recover to single digits on lower comparables. Turkish currency is now stabilizing and Namaste Africa growing healthy on lower pricing from local manufacturing.

* Management's new initiatives to accelerate growth appears positive. However, we believe earnings pick up may take some time, given the near-term rural slowdown and a slower recovery international. Maintain Hold and EW stance in sector EAP.


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