DABUR - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.5

📊 Core Financials

• Revenue & Profitability: PAT declined to 349 Cr. from 407 Cr., showing pressure on earnings despite stable operations.
• Margins: Strong ROE at 19.6% and ROCE at 24.6% indicate efficient capital utilization.
• Debt Ratios: Debt-to-equity at 0.07 — very low leverage, financially stable.
• Cash Flows: Dividend yield of 1.62% provides consistent shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 61.5 vs Industry PE of 49.7 — overvalued compared to peers.
• P/B Ratio: Current Price 494 ₹ / Book Value 41 ₹ ≈ 12.0, premium valuation.
• PEG Ratio: -90.5 — negative due to weak growth outlook, caution warranted.
• Intrinsic Value: Valuation stretched; fundamentals do not fully justify current premium pricing.

🏢 Business Model & Competitive Advantage

• Operates in FMCG sector with diversified portfolio across healthcare, personal care, and food products.
• Competitive advantage lies in strong brand equity, distribution reach, and consumer trust.
• DII holdings increased (+1.13%), showing domestic institutional support, though FII reduced (-0.97%).

📈 Technical & Entry Zone

• DMA 50: 508 ₹ | DMA 200: 512 ₹ — stock trading below averages, indicating weakness.
• RSI: 33.8 — oversold territory, potential rebound zone.
• MACD: -5.02 — bearish momentum persists.
• Entry Zone: Attractive near 440–460 ₹ for accumulation.
• Long-Term Holding: Suitable for long-term investors given strong brand and efficiency, but valuations remain stretched.

✅ Positive

• Strong ROE (19.6%) and ROCE (24.6%) highlight efficient capital use.
• Low debt-to-equity ratio (0.07) ensures financial stability.
• DII holdings increased (+1.13%), reflecting domestic institutional confidence.

⚠️ Limitation

• High P/E ratio (61.5) compared to industry average.
• P/B ratio of 12.0 indicates premium valuation.
• Negative PEG ratio (-90.5) reflects weak growth outlook.

📉 Company Negative News

• Quarterly PAT declined from 407 Cr. to 349 Cr.
• FII holdings reduced (-0.97%), showing weaker foreign investor sentiment.

📈 Company Positive News

• DII holdings increased (+1.13%), reflecting strong domestic institutional support.
• Strong operational efficiency with high ROCE and ROE despite earnings pressure.

🏭 Industry

• Industry PE at 49.7 — sector trades at premium valuations.
• FMCG industry benefits from steady demand, brand loyalty, and defensive characteristics.

🔎 Conclusion

DABUR remains a fundamentally strong FMCG player with excellent return ratios and low debt, but valuations are stretched and earnings growth is under pressure. Entry is attractive near 440–460 ₹, with cautious long-term holding recommended. Sustained earnings recovery and improved growth outlook will be key for stronger upside potential.