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Techno-Funda Picks

Buying Range: | 106 109 Price target: | 122.80 Stop loss: | 100.80 Time Frame: 6 months

April 12, 2012 Dabur India Ltd. (DABIND) Technical Outlook A look at the long term price chart reveals that the share price of Dabur India Ltd remains in a healthy uptrend, consistently forming higher peaks and troughs on the weekly charts. Over the past couple of years, the stock has ranged between | 90 and | 120 providing ample entry and exit opportunities for medium term traders. This consolidation range has held steady despite the overall weakness in the broader indices during 2010-2011. Even the recent steady up move from the January 2012 lows of | 92-95 started from the lower band of the consolidation range. An important observation on the price charts is that the stock has recently witnessed a positive crossover in the medium term (50 DMA) and long term moving averages (200 DMA). In technical parlance, such an event is termed as a Golden Cross, indicating a shift in momentum in favour of bulls from a medium-term perspective. On Thursday, the stock price breached out of the past seven weeks consolidation range with volume spurt indicating positive momentum We expect prices to continue the northward journey and head towards the upper band of the consolidation range to re-test its all-time high of |123 over the medium term. We recommend accumulating the stock in the range of | 109-106 for a target of | 122.80 with a protective stop loss in place at | 100.80. Fundamental Outlook Currently, the stock is trading at 28.6x and 23.6x its FY12E and FY13E EPS of | 3.7 and | 4.5, respectively. With very strong growth in the international business (37.8% YoY in Q3FY12) and strengthening of its presence in the Middle East, we believe international business sales would continue to drive Dabur's topline growth significantly. Further, with the revival in slow growth categories like shampoos and sustainable growth in foods categories (especially juices), the company's performance is likely to remain robust in FY13E. Going ahead, we expect margins to improve by FY13E as raw material pressure will subside in two or three quarters. Hence, we maintain our BUY rating and target price of | 120. Exhibit 1: Dabur India Daily chart

Source: Spider software, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Techno-Funda Picks

Pankaj Pandey

Head Research ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai 400 093 research@icicidirect.com

pankaj.pandey@icicisecurities.com

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