Emkay Global said that they foresee Dabur benefiting from consumption recovery, with the company positioned to gain from steady distribution expansion, comprehensive portfolio category coverage, sustained focus on innovation, and adequate liquidity for bolt-on acquisitions.
“Dabur has been our preferred consumption pick, given its relatively higher share of rural, diversified portfolios and its sustained thrust on NPDs,” said Nitin Gupta, Senior Research Analyst at Emkay Global.
Given Dabur’s diversified portfolio and better execution, the FMCG major remains Emkay’s top preference. The brokerage noted that the recent run-up in the stock partially factors in its potential demand recovery but they see Dabur well placed for any recovery in consumption.
Portfolio executions have not yielded any material outcome in the past due to subdued demand but are expected to benefit from demand recovery.Dabur has been expanding the total addressable market (TAM) across brands with category extensions, which are backed well by distribution and marketing. In the last couple of years, some innovations have not seen scale-up, given a correction in the marketing budget, but these are likely to be supported ahead with higher allocations.Further, with digitization in place, the company is also well-placed to leverage shelf space at the store.The shares of Dabur closed flat on BSE at Rs 609 as of Friday.
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