Dabur India sees modest profit growth in Q3, but Street remains cautious

Analysts remain cautious on Dabur India, citing that while demand conditions are improving, the company is yet to demonstrate a sustained, execution-led growth cycle

Brokerages remain cautious on homegrown fast-moving consumer goods (FMCG) major Dabur India, citing improving demand trends but muted execution, following the company’s announcement of its financial results for the third quarter of FY26 (Q3FY26).

 

While Emkay Global, which has retained a Reduce rating on the stock, points to structural demand tailwinds and a gradual margin recovery, it says Dabur’s execution needs to materially improve to fully capitalise on these trends, warranting a discounted valuation multiple. ICICI Securities, which has maintained a Hold rating, meanwhile, flags narrow-based growth driven by select categories, weak performance in the healthcare segment, and a lack of meaningful market share gains, raising concerns over the sustainability of growth in an increasingly competitive environment.

 

 

This comes after Dabur India reported a 7.2 per cent year-on-year (Y-o-Y) rise in net profit to ₹560 crore in Q3FY26, compared with ₹524.4 crore in the year-ago period. Revenue grew 6.1 per cent Y-o-Y to ₹3,558.6 crore from ₹3,355.2 crore in Q3FY25. Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 8 per cent Y-o-Y to ₹874.8 crore from ₹809.9 crore.

Meanwhile, here is what brokerages said on Dabur India:

Emkay Global — Retains Reduce | Target price: ₹525

Brokerage firm Emkay Global has retained its Reduce rating on Dabur India with a Dec-26E target price of ₹525, based on 40x Dec-27E price-to-earnings (P/E), implying a 15 per cent discount to its past five-year average one-year forward P/E. While structural tailwinds remain positive for demand, the brokerage said execution aligning with the demand trend will be key for Dabur.

 

Emkay further pointed out that the management highlighted GST tailwinds aiding growth in December 2025 and noted improving growth in urban markets, with the gap to rural growth narrowing to 330 basis points from 600 basis points last year. Management commentary on Q4FY26 and FY27 was broadly in line with the brokerage’s expectations. Amid a muted raw material cost environment, Emkay expects the company’s margin profile to gradually improve.  ALSO READ | HDFC Securities starts coverage on LG Electronics India with 'Add'; check target 

“For Q4FY26, the company noted a low base aiding high single-digit revenue growth, which will hold for FY27 amid GST tailwinds. Growth will be volume-dependent, as the need for price hikes is limited given the current raw material setting. In a seasonally low-margin Q4, the management expects margin improvement on a Y-o-Y basis, aided by a better mix. We see an 8 per cent revenue CAGR over FY26–28E and an Ebitda CAGR of around 11 per cent, with annual 40–50 basis points of Ebitda margin expansion,” Emkay said in its report.

 

The management has undertaken portfolio actions which, Emkay believes, may aid growth, but the brokerage said it awaits a step-up in execution to benefit from the prevailing tailwinds.

ICICI Securities — Hold | Target price: ₹550

Analysts at ICICI Securities have retained their Hold rating on the FMCG stock with an unchanged DCF-based target price of ₹500. Dabur’s Q3FY26 performance, the analysts said, was largely driven by strong contributions from the hair care and oral care segments. However, growth breadth remains limited, with several categories showing muted momentum and lacking meaningful market share gains, constraining overall volume traction.

 

The brokerage also noted that healthcare, a margin-accretive segment, has lacked strong growth, restricting any material earnings improvement. Dabur’s three-year revenue CAGR of around 5 per cent remains underwhelming compared with peers, underscoring the absence of a durable, demand-led growth cycle.  ALSO READ | State Bank of India, HDFC Bank, ICICI Bank shares have more upside, finds study 

“With volume recovery still modest, growth increasingly appears dependent on price/mix and portfolio skew, which, in a competitive environment, raises questions on sustainability,” wrote Manoj Menon, Dhiraj Mistry, Ashutosh Joytiraditya, and Akshay Krishnan of ICICI Securities in a research note.

 

The analysts marginally tweaked their estimates for FY26–28 and now model revenue, Ebitda, and PAT CAGRs of 8 per cent, 9 per cent, and 10 per cent, respectively, over FY25–28E. Lower-than-expected competitive intensity remains a key upside risk, while sustained weakness in consumption demand and a slower-than-expected recovery in rural demand pose key downside risks.

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