DABUR Research Report

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Dabur India – BUY
CMP Rs102, Target Rs115
December 16, 2010



Sector: FMCG
After a long consolidation, Dabur India has broken out from a falling
channel. This has brought to an end the short-term downtrend in the
Sensex: 19,648
FMCG counter. The price has sustained above the falling channel and
CMP (Rs):
102
has formed a convex structure on the daily chart, indicating a steady
Reco type:
Technical
accumulation in the counter. A move past Rs100 should provide a
Target 1 (Rs):
115
decent upside opportunity of 10-15% in the near term.
Target 2 (Rs):
120

Stop Loss (Rs):
95
The neck line of inverted head and shoulder corresponds at Rs99,
which should act as a solid base for building up of momentum. The
Upside (%):
12.9
52 Week h/l (Rs):
112 / 73
stock has also managed to trade above the short-term and the
medium-term moving averages, which initially acted as stiff
Market cap (Rscr) :
17,738
resistance. Hence, the stage is set for the stock to rally to Rs115 in
6m Avg vol (‘000Nos):
2,160
the near term.
No of o/s shares (mn):
1,741

FV (Re):
1
Being a defensive counter, the Dabur India has held well above the
Bloomberg code:
DABUR IS
long-term support levels despite volatility in the broader markets.
Reuters code:
DABU.BO

BSE code:
500096
On the weekly chart, the RSI has given a positive crossover after a
NSE code:
DABUR
long time. This also provides better risk reward ratio from the
Prices as on 15 Dec, 2010
current levels.
Shareholding pattern

Daily chart

September '10
(%)
Promoters 68.7
Institutions 24.3
Non promoter corp hold
0.7
Public & others
6.2

Performance rel. to sensex
(%) 1m
3m
1yr
DABUR 10.2

(7.8)
8.5

HUL
1.2
7.2
(1.9)
ITC (0.6)
(1.6)
20.9





Share price trend
DABUR
Sensex
150
130
110
90
70
Source: India Infoline Research, Metastock
50

Dec-09
May-10
Oct-10
Derivatives check
Dabur India has seen good delivery based buying of around 3mn

shares in the last three trading sessions, with an average delivery of

around 60%. The stock has experienced good long build-up in

current month futures of around 74,000 in total open interest of

3.8mn. This long build-up was preceded by some short covering. The

stock has been maintaining an average volatility of around 36%

despite of some shorts seen a fortnight before. Dabur India is also

Technical Analyst
trading with low VAR (Value at Risk) of around 8.84%. The outlook
Hadrien Mendonca
on the stock appears to be positive from the current level of Rs100
[email protected]
for a target of Rs115 in the short term.



Recommendation parameters for fundamental reports:

Buy
– Absolute return of over +10%
Market Performer – Absolute return between -10% to +10%
Sell – Absolute return below -10%


Published in 2010. © India Infoline Ltd 2010


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