Emkay Global said it believes Dabur will benefit from improving consumption, while also benefiting from steady distribution expansion, broad portfolio category coverage, continued focus on innovation and ample liquidity for bolt-on acquisitions.
“Dabur has been our preferred consumption company given its relatively higher share in rural, diversified portfolio and its continued emphasis on NPD,” said Nitin Gupta, senior research analyst at Emkay Global.
Given Dabur’s diversified portfolio and good execution, the FMCG major remains Emkay’s top priority. The brokerage said the recent rally in the stock partly reflects its potential demand recovery, but they see Dabur well-positioned for any recovery in consumption.
Portfolio execution has not delivered significant results in the past due to weak demand, but benefits are expected to flow in as demand improves.
Dabur is expanding the total addressable market (TAM) with category extensions across brands, well supported by distribution and marketing. In the past few years, some innovations have not received scale-up due to improved marketing budgets, but these are likely to be supported going forward with higher allocations.
Moreover, with digitisation, the company is also well positioned to leverage shelf space in stores.
Dabur shares closed stable at Rs 609 on BSE on Friday.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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