Hindustan Unilever Ltd. share price target

Most consumer categories have seen uptick in demand in the ongoing festive season. We believe volume growth trajectory has bottomed out. However, we don't expect HUL's volume growth to accelerate meaningfully (high single digit territory) in 2HFY20 given its higher base on a 3 year CAGR basis (9% vs. 6% in 1HFY20). GSK's acquisition is running behind schedule and is expected to be integrated by Feb-20 (vs. Dec-19 earlier). We maintain our NEUTRAL rating as we don't see any near-term triggers for re-rating in the stock. HULs 2QFY20 show was respectable amidst concerns of slowdown worsening. Co maintains a cautious outlook and hopes for a recovery in rural demand. We maintain our estimates and NEUTRAL rating. We value HUL at 45x on Sep-21 EPS with TP of Rs 2,017.

ff Upside Risks: (1) Higher consumption leading better-than-expected demand; (2) significant better pricing growth despite benign raw material prices; (3) higher-than-expected synergy benefit of from GSK integration....

Premiumisation trend to help drive higher revenues/margins Driven by premiumisation trend across segments, HUL's revenue has grown 9% in the last 10 years. On the back of premiumisation, the FMCG major has gained market share in most of its key categories like laundry, personal wash, hair care and beverages. Over the years, HUL has launched premium products across its key categories. Its most successful premium products (Surf, Dove, Lipton) have been growing significantly, ahead of market growth. As a result, HUL's operating margins has seen consistent expansion...

Hindustan Unilever Limited's (HUL) Q2FY2020 performance was largely in-line with our expectations. Revenue grew by 6.7% and adjusted PAT grew by ~21.5% (operating profit margin [OPM] expanded by 191 BPS on a comparable basis to 23.8%). Strong growth in PAT was mainly on account of reduction in corporate tax rate, while profit before tax grew by ~8% during the quarter. Volume growth of the domestic consumer business stood at 5% on a q-o-q basis, despite moderation in rural demand in July and August 2019....

We cut HUVR's FY20 and FY21 EPS by 1.1% and 2.6% despite 5% volume Change in Estimates | Target | Reco despite good monsoons 2) limited scope to increase margins from current...

14 October 2019 EBITDA rose 21% YoY to INR24.4b (16% on a comparable basis after adjusting the company has started utilizing the corporate tax benefits from 2QFY20 itself, leading to a sharp PAT beat. Domestic consumer business sales were up 7% stood at 54.5%, while the EBITDA margin expanded 290bp YoY to 24.8% up 210bp YoY adjusted for Ind-AS 116 and 50bp adjusted for the impact of government grants. Notably, HUVR delivered a margin improvement despite a 20bp YoY/70bp QoQ increase in ad spend. Revenue was up 9.4% YoY at Home Care (34% of sales) and 5.3% YoY at Personal Care. Food & Refreshments (19% of sales) sales were up 8.4% YoY. Margin expanded 150bp YoY in Home Care and 260bp YoY in Personal Care, but shrank 140bp YoY in F&R.; Rural growth was 0.5x urban for the sector in 2QFY20.

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We retain our HOLD rating on the stock, with a revised target price of Rs 1,790, based on 48x FY21E adj. EPS. Topline boosted by volume growth HUL reported 6.6% YoY growth in topline to Rs. 10,114cr, with product sales revenue contributing Rs. 9,984cr (+6.7% YoY). The revenue growth was led by improvements in the rural and urban consumer business (+7%) with underlying volume growth of 5%. By segment, revenue growth was led by home care division (+10.1% YoY to Rs. 3,465cr; volume driven growth) followed by food & refreshment business (+9.2% to...

Hindustan Uniliver Limited (HUL) Q1FY20 profit rises 15% YoY to Rs 1,755 crore; in line with Street estimates. Revenue of Hindustan Unilever Limited (HUL) grew by 7% y-o-y at Rs. 10114 crore in June 19 quarter. Volume growth of 5% can be attributed to strong traction to new launches. OPM improved by 250 bps to 26.2% due to better leverage, lower ad spends and other cost initiatives. 100 bps improvements is due to Ind AS 116 on leases. Operating profit grew by 18% y-o-y to Rs. 2647 crore. Interest cost was up by 243% to Rs 24 crore and depreciation was up by 69% to Rs 214 crore. Thus PBT...

Reported Profit after Tax (after accounting for exceptional items) grew by 14.8% Y-o-Y to `1755 crs led by improvement in EBIDTA and other income in Q1FY20. PAT Margin stood at 17.4% as opposed to 16.1% in the same quarter in the previous year. Exceptional Items includes profit from the sale of surplus properties, provision towards...