Despite strong growth, Dabur stock may hit the valuation roadblock

The management is confident of double digit sales growth and steady margins in FY22

Dabur India delivered a strong beat in its June quarter performance. Its guidance for FY22 too was positive with double digit sales growth and scope for margin expansion. Despite these triggers, the stock corrected over 4 per cent in trade on account of high valuations and volatility in the growth trends. Prior to the fall today, the stock had gained 19 per cent from its lows in February outperforming its peers.

Says Ashit Desai of Emkay Global Research, “Dabur’s growth initiatives remain aggressive, offering an improved growth outlook. However, likely moderation in healthcare ahead and higher effective tax rate limit