Dabur has shown strong buying interest after reversing from ₹463 levels and is now sustaining above its 14-day EMA. The company is backed by strong fundamentals, with increasing market share across multiple FMCG categories.
Dabur India has entered a recovery phase following a correction, with the stock likely to test ₹515 - ₹520 levels over the next few weeks, according to SEBI-registered analyst Deepak Pal.
As seen on the weekly chart, Dabur has shown strong buying interest over the past week, Pal noted.
On June 23, the stock reached a low of ₹463.25, from which consistent buying activity began, signaling the start of a positive momentum phase. On June 25, it opened with a gap-up and began trading firmly above its 14-day exponential moving average (EMA), reinforcing the bullish sentiment.
On Monday, Dabur opened at ₹465.65, made a low of ₹463.25, a high of ₹488.30, and closed at ₹486.35, well above its 14-day EMA on the weekly timeframe. At the time of writing, the shares were trading 0.57% higher at ₹487.75.
For the last three weeks, the stock has respected the key ₹460 support zone, repeatedly bouncing back from lows around ₹463, Pal observed.
If Dabur continues to trade above the 14-day EMA, it could retest its 55-day EMA in the next three to four weeks, which lies around ₹515 – ₹520, the analyst said.
Given this setup, the analyst recommends a “buy on dip” strategy, with a stop-loss at ₹450. If the current momentum holds, Dabur has the potential to climb towards the ₹525 mark in the short to medium term, a near 8% upside from current levels.
Despite a mixed bag in its fourth quarter(Q4) results, Dabur has a strong fundamental foundation with low debt, margins of 15 - 16%, an ROE of 19%, and steady free cash flow.
Its diversified portfolio, international growth (+19% in Q4), and market share gains in over 90% of categories highlight its resilience despite macroeconomic headwinds. However, it faces challenges from sluggish urban demand, margin pressures, and concerns over high valuations.
Year-to-date (YTD), it has fallen 3.8%.
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