DABUR - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.5

🌿 Fundamental Analysis: Dabur India Ltd.

Dabur is a legacy FMCG player with strong brand equity, low debt, and consistent profitability. While its fundamentals remain solid, current valuations and recent earnings contraction suggest caution for fresh long-term entry.

Metric Value Implication

P/E Ratio 53.0 Slightly undervalued vs. industry PE of 59.2, but still expensive

PEG Ratio -40.5 Negative PEG due to declining earnings — red flag

ROCE / ROE 20.2% / 16.8% Strong — efficient use of capital

Dividend Yield 1.54% Decent — attractive for conservative investors

Debt-to-Equity 0.09 Very low — excellent financial health

EPS ₹9.97 Stable earnings base

Qtr Profit Var -8.35% Earnings contraction — short-term concern

FII/DII Holding Change -0.83% / +0.54% Mixed sentiment; DII accumulation is a positive

📉 Technical Analysis

Current Price: ₹518

DMA 50 / DMA 200: ₹501 / ₹512 → Trading above both; mild bullish signal

RSI: 59.2 → Neutral zone; no strong momentum

MACD: +7.31 → Bullish crossover; short-term strength

Volume: In line with average; steady interest

💰 Ideal Entry Price Zone

₹480–₹500

This range offers a better margin of safety and aligns with DMA support

Avoid entry above ₹550 unless earnings stabilize and PEG improves

📈 Long-Term Investment Outlook

Strengths

Strong ROCE and ROE — efficient capital deployment

Low debt — robust balance sheet

Stable brand with diversified product portfolio

Decent dividend yield — suitable for conservative investors

Risks

PEG < 0 — earnings contraction or volatility

P/E > 50 — priced for stability, not growth

Recent profit decline — needs monitoring

FII selling — sentiment drag

Dabur is a defensive FMCG stock, ideal for capital preservation and modest compounding. It’s best suited for conservative investors seeking stability over aggressive growth.

🏁 Exit Strategy / Holding Period

If you already hold Dabur

Holding Period: 3–5 years for steady compounding and dividend income

Exit Strategy

Consider trimming near ₹650–₹670 (recent high) if valuation stretches

Reassess if ROCE drops below 15% or earnings continue to decline

Hold if quarterly profits stabilize and PEG normalizes

Would you like a comparison with peers like HUL, Marico, or Emami to explore better growth or valuation dynamics within the FMCG space?

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