Hindustan Unilever Ltd (HUL) is India's largest FMCG player having ~44 brands spanning 14 distinct categories largely grouped into home care, beauty & personal care, food & refreshments & others.

Gaining market share: HUVR now has 14 brands with over INR10b in annual sales (v/s 12 brands last year). In FY21, it gained market share in 84% of its portfolio and launched more than 150 SKUs. Rapid technology adoption: A significant leap has been observed in technology adoption among small retailers, which are convinced that this is, indeed, the need of the hour. HUVR's eB2B app, Shikhar', has enabled its retailer partners to place contactless orders conveniently, with over 500k retailers ordering through the app. We reckon that while this accounts for ~20% of HUVR's direct...

Continued strong demand in Rural areas supported by decent urban demand recovery improves the outlook of the business in near-term. Despite uncertainty arising due to increase in COVID cases, we believe the company is well-placed in terms of demand planning & supply chain management. Therefore, we maintain our BUY rating on the stock with a target price of Rs. 2,710 based on 58x FY23E adj. EPS. Strong recovery in BPC, HC drives revenue growth HUVR's revenue grew by 34.6% YoY (+2.3% QoQ) to Rs. 12,132cr, supported by...

(accounting for 30.87% of total sales). Sales of Beauty & Personal Care segment has gone up GSKCH business, which was amalgamated with the company effective April 1, 2020. Sales of Others segment has gone up 112% to Rs 507.00 crore (accounting for 4.08% of total sales). Profit before interest, tax and other unallocable items (PBIT) has jumped 52% to Rs 2,777.00...

Though HUL saw strong growth momentum till the second week of April, second wave of Covid-19 started to impact discretionary categories again after localised lockdowns. We believe soaps, sanitisers & foods categories would continue to see robust growth in FY22E also with heightened hygiene preferences & increase in at-home consumption. Detergent, cosmetics &...

UTI Asset Management Company: While UTIAM's market share and equity performance improved in FY21, high staff costs continue to pose a significant challenge to core profitability. AUM growth along with cost rationalisation is expected to drive near-term performance; we expect the company to deliver an FY21-23E revenue/NOPLAT CAGR of 13/29%. We retain a BUY with a DCF-derived target price of INR750 (10% execution discount to DCF), valuing the stock at 19.7x Mar-23E NOPLAT + Mar-22E cash and investments. The stock is currently trading at FY22E/23E EV/NOPLAT of 18/14.4 and P/E of 20.7/17.4x. Mastek: Mastek delivered strong revenue growth (+7.5% QoQ CC) in the quarter and an increase in order bookings by 19.3% QoQ was encouraging. The growth visibility has improved significantly, based on the three large deals that the company has bagged from the UK government. These include a ~GBP30mn+ deal from NHS, ~GBP25mn deal from UK Home Office, and a GBP10mn contract from HMRC. The UK government's business along with Evosys (+8.9% QoQ) will drive growth. Mastek is making continuous investments to revive the UK private and the US retail business, which have been impacted by the pandemic. Revival in these businesses can further add to growth. The EBIT margin, which expanded ~620bps in FY21, is expected to decline by ~90bps in FY22E due to increased investment in sales and capabilities. We increase our target multiple to 18x (earlier 15x) and revenue/EPS estimates by +6/5% for FY23E, based on acceleration in organic growth and the company's ability to win large deals. Our TP of INR...

We believe, over the medium to long term HUL is poised to deliver a consistent and profitable volume led growth given execution, distribution and digital capabilities.

Hindustan Unilever (HUVR) reported a good set of numbers on all fronts in 4QFY21, led by a recovery in its Discretionary portfolio and Detergents. Two-year average like-to-like sales growth has now improved to 5.8% in 4QFY21 from minor decline in 1QFY21. Ongoing lockdowns would result in a temporary impact on high-margin discretionary product sales, leading to a 4.3% EPS reduction in FY22E; we have retained our FY23E forecasts. We continue to monitor the situation as it unfurls. HUVR is likely to resume the strong earnings growth path from the preCOVID era (~18% CAGR in the four years ended FY20), led by the same...

HUL is India's largest fast-moving consumer goods company with well-renowned household products.Maintain buy with a TP of Rs 2,550.

On a consolidated basis, the FMCG major's net profit rose 18.8% to Rs 1938 crore on 20.57% rise in revenue from operations to Rs 12,181 crore in Q3 FY21 over Q3 FY20. The FMCG major's profit before tax rose 16.46% year-on-year to Rs 2,596 crore in Q3 FY21. EBITDA grew by...

HUL reported moderate 4% volume growth in Q3FY21 due to muted demand in the detergent category. Revenue grew by 21% YoY (7% organic) to `11,682 cr led by the consolidation of new brands (Horlicks and Boost)....

Nippon Life India Asset Management: NAM has been able to stabilise its equity market share over the past two quarters to 7.0%. We expect it to focus on improving performance and continue to recoup its lost market share. Additionally, we expect the company to benefit from increased credibility to raise HNI/institutional capital. Driven by cost optimization, we increase our estimates and now expect the company to deliver an FY21-23E revenue/NOPLAT CAGR of 12.6/16.9%. We upgrade the stock one notch to ADD with a target price of Rs 335, valuing the stock at 36x Sep-22E NOPLAT + cash and investments. The stock is currently trading at FY22E/23E EV/NOPLAT of 37.1/30.1 and P/E of 32.6/26.9x. Navin Fluorine International: We retain our ADD rating on NFIL with a TP of INR 2,720 on the back of (1) earnings visibility, given long-term contracts, and (2) tilt in sales mix towards high-margin high-value business. EBITDA/APAT were 14/9% below our estimates, owing to a 12% lower revenue, offset by lower-than-anticipated tax outgo. PSP Projects: PSP's 3QFY21 performance was mostly in line. While execution is back on track, order book ramp up remains key from revenue visibility standpoint. Private players are deferring Capex plans due to steep rise in cement and steel prices. Coupled with conservative bidding to maintain margins, this has led to PSP missing out on a few large projects, and hence, resulting in just Rs 2.2bn inflows in 9MFY21. Having said that, PSP expects order inflows for 4QFY21 to be at Rs 10bn, which is now a key monitorable. Long-term...

Hindustan Unilever (HUVR) reported in-line operating performance for 3QFY21. Like-to-like sales growth of 7% YoY (20.9% YoY reported growth, including GSK) was in-line. On the other hand, underlying like-to-like volume growth of 4% was below expectations with realizations (led by...

Nutrition business to drive food segment growth Cost inflation, media spends to restrict margin expansion Palm Oil & Tea prices have been up 40% compared to last year. Though, crude prices have been 30% lower, it is slowly inching up. The company has taken only partial price hikes in last six months. Further, media spends have increased by 175 bps sequentially due to aggressive new launches. We believe these cost increase would restrict operating margin expansion. We...

Retain BUY with revised TP of Rs. 2,636 (earlier Rs. 2,455) as we raise our target PE to 55x FY23E EPS (53x earlier) given strategy to invest for growth and deliver a consistent and profitable volume led growth.

L&T Infotech: We maintain ADD on L&T Infotech (LTI), following a strong operational 2Q and continuity in its growth leadership ahead. A positive outlook on LTI is premised on (1) stronger NN large deal wins (USD 40mn in 2Q vs. USD 20mn in 1Q), broad-based wins, and strong large deal pipeline; (2) growth leadership in BFS vertical (~90% of incremental revenue in 2Q); (3) acceleration of cloud migration (9% QoQ in IMS and 5.9% QoQ in digital); (4) new logo addition reverting to pre-COVID level and recovery in Hi-tech vertical ahead; and (5) SaaS partnerships (Snowflake, ServiceNow). LTI's valuation premium to peers reflects its growth/margin/return metrics outperformance vs. peers. Our target price of Rs 3,065 is based on 22x Sep-22E EPS (DCF-implied at 22x), supported by industry-leading 20% EPS CAGR over FY20-23E, >45% RoIC. Hindustan Unilever : HUL posted a mixed result, with a marginal beat in revenue (3% vs 1% HSIE), but a slight miss in margins. UVG was at +1% (HSIE -2%). Home Care remained weak at 2% YoY decline as demand for fabric wash was sluggish (also impacted by price cuts). BPC recovered well but was flat after a sharp 12% YoY decline in 1QFY21. F&R; clocked strong growth of 19% (ex-GSK), aided by in-home consumption. The company clocked double-digit growth in 80% of its portfolio, which indicates a strong recovery. GM contracted by 145bps YoY due to commodity inflation and adverse product mix. ASP saw a sequential increase as the company resumed investments. We expect a gradual recovery in core categories in...

We upgrade our FY21/22E Revenue estimates by 2%/5% and introduce FY23 estimates. Revise rating to BUY from HOLD earlier with change in TP to Rs. 2,455 (earlier Rs. 2,200) as we continue to value the stock at 53x FY23E EPS.