Dabur India Receives 'Sell' Rating from MarketsMOJO, Poor Long-Term Growth and Negative Financial Results Raise Concerns

Dabur India, a leading FMCG company in India, has recently received a 'Sell' rating from MarketsMOJO on November 8, 2024. This downgrade is based on poor long-term growth as the company's net sales have only grown at an annual rate of 7.15% and operating profit at 4.95% over the last 5 years.

In addition, the company's recent financial results for September 2024 have also been negative, with its ROCE (HY) at its lowest at 20.26%, operating profit to interest (Q) at its lowest at 11.66 times, and PBT less OI (Q) falling by -17.2%.

Technically, the stock is currently in a mildly bearish range, with the technical trend deteriorating from sideways on November 6, 2024, and generating -1.48% returns since then. Multiple factors, such as MACD, Bollinger Band, and KST, also indicate a bearish trend for the stock.

Moreover, with a ROE of 17.3, the stock is currently trading at an expensive valuation with a price to book value of 9.1. However, it is still trading at a fair value compared to its average historical valuations. In the past year, while the stock has generated a return of -1.43%, its profits have only risen by 1.9%, resulting in a high PEG ratio of 28.1.

Furthermore, Dabur India has consistently underperformed against the benchmark over the last 3 years, with -1.43% returns in the last 1 year and underperformance against BSE 500 in each of the last 3 annual periods.

On the other hand, the company has shown high management efficiency with a ROE of 22.54% and a low debt to equity ratio (avg) of 0 times. Additionally, Dabur India has a high institutional holding of 28.71%, indicating that these investors have better capability and resources to analyze the fundamentals of the company compared to most retail investors.

In conclusion, while Dabur India has shown high management efficiency and a low debt to equity ratio, its recent financial performance and technical trends suggest a bearish outlook for the stock. Investors should carefully consider these factors before making any investment decisions.