We hereby present you our investment idea for Equity Investment i.e “Pick of the Week”. A thorough analysis of company, industry and economy goes behind our stock ideas for you. With the “Pick of the Week”, you may earn superior returns in stock market over a time horizon of 6 – 9 months.

INVESTING RATIONALE

• Strong quarterly results: Dabur posted strong quarterly earnings led by 12.4% broad-based volume growth, while rupee impacted international business adversely. Segment wise hair care (up 23.8% YoY), digestives (up 22.5%) and skin care (up 19.3%) outperformed while OTC & Ethicals ( up 17.6%) also grew well. Home care , oral care and foods lagged behind growing by 9-11%.

• Management guidance: Management expects double digit volume growth for FY19. On margin front, while it expects pressure to ease out from Q4FY19 on lower RM prices, price hikes (~ at 3.6% at MRP level in current quarter) and better product mix. Operating leverage benefit is also expected to drive EBITDA margins going forward.

• New Product launches: The Company plans to launch various new products across categories like Juices, Home care, Toothpastes etc in FY20.Management remains optimistic of recovery in international business by H2FY20 and sustained growth in domestic business.

• We remain optimistic on managements vision of broad based growth , market share gains and recovery in international business.

• We maintain a BUY with a target of Rs. 495