By Malvika Gurung
Investing.com -- The global research giant Morgan Stanley (NYSE: MS ) has upgraded its rating on the FMCG giant Dabur India (NS: DABU ) from equal-weight to overweight stance. The target price of the FMCG major has been revised from Rs 578/share to Rs 660.
Shares of the mega-cap FMCG giant Dabur India were trading 2% higher at Rs 604.35 apiece at the time of writing. Given the newly-set target price, Morgan Stanley sees an upside of 9.2% on the consumer goods stock.
As a result, the Chyawanprash-producer’s shares hit a new 52-week high of Rs 610.75 apiece on Wednesday.
The global brokerage expects rural recovery and an improvement in portfolio mix to drive Dabur’s revenue growth, as over 45% of the company’s revenue is linked to the rural economy.
"While demand trends are yet to reflect a recovery in rural demand, we see accelerating signals that the rural weakness recorded over the last four quarters could be turning a corner. All of this together suggests higher income levels in rural India over the coming months,” stated MS.
Further, the brokerage sees a deceleration in the FMCG major’s healthcare portfolio slowing down as the base effect sets in. It expects the company’s food & beverage portfolio to witness strong growth going ahead.
MS pegs Dabur’s top-line growth and margins to improve in H2FY23 and FY24 on the backs of easing inflation and rural recovery.
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