Hindustan Unilever Ltd. share price target

Hindustan Unilver (HUVR) 2QFY21 result was better with our estimates. Overall business recovers sharply from -7%YoY revenue growth in 1QFY21 to +3% YoY in 2QFY21. Outperformance of health, hygiene and nutrition portfolio (c.80% revenue share, +10%YoY) helped offset c. 25%YoY decline in revenue from discretionary and out-of-home portfolio. Inflationary raw material cost lead to the decline in gross margins however rationalization of advertisement spending helped EBITDA margin to expand marginally. Rural growth remains resilient while urban continues to face COVID headwinds. Management expects raw material inflation to keep gross margin under...

16 September 2020 Detergents, Tea, Oral Care, etc. Of the remaining 20% portfolio, 15% declined by 45% while the rest 5% declined by 69% during the quarter. Skin Care the largest segment of the remaining 20% portfolio performed poorly in 1QFY21, but has started to recover consistently since June (although it is yet to turn positive YoY). With the Ice-Cream business being a washout in 1QFY21, it contributed significantly to business decline in the quarter. However, the Ice-Cream business is much less salient in the base quarter of 2QFY21 (2QFY20) v/s 1QFY21. Therefore, 2QFY21 is not expected to be as drastically impacted by the Ice-Cream business as 1QFY21. The GSK business was affected by temporary plant shutdowns due to COVID- led disruption and some labor issues. The temporary shutdown at HUVRs Haridwar plant due to COVID issues did not affect operations owing to adequate inventory buffers.

Company rebuilt supply chain, launched 50 products; rationalised of SKUs to supply relevant products and enhanced capacity of sanitisers (by 120x) and handwash (by 6x) to capture growing demand. HUL focuses on improving profitability through cost-savings; synergistic...

Amid the pandemic induced global chaos, one thing is at least clear: a few powerful and quality companies are set to gain more clout and HUL is one such name. With key brands in its bucket, solid quarter( Q1FY21) along with...

operations of the company. But with operating profit margin (OPM) contract by 120 bps to 25.1%, the operating profit was down by 1% to Rs 2695 crore. Other income was up by 6% to Rs 154 crore and thus the PBIDT was down by 1% to Rs 2849 crore. After accounting for higher interest cost (up 15% to Rs 31 crore) and higher depreciation (up12% to Rs 257 crore), the PBT was down by 2% to Rs 2561 crore. The EO expense was Rs 119 crore, a swing of RS 126 crore. Thus the PBT after EO was down by 7% to Rs 2442 crore. However with taxation stand lower by...

Q1FY21 standalone revenue rose 4.4% YoY primarily on account of acquisition of GSK-CH and higher sales of foods & refreshment. EBITDA margin shrank 110bps YoY to 25.0% due to negative impact of COVID-19 lockdown costs, partially offset by savings and synergies of...

Demand outlook: On a MoM basis HUL has witnessed recovery in business which in April was at 70% further improving in May and in June the company reported 5% revenue growth on YoY basis including 6% distributor inventory re-stocking. However, whether this demand sustains is too early to call out

HUVR has successfully integrated GSK which reinforces our confidence in long-term growth story led by 1) Increased Market penetration by leveraging HUVR's distribution capabilities (increase in reach by 1.75x initially and then 2.25x), 2) Launch of sachets and pouch packs at aggressive price points (20% discount), 3) Low rural penetration of HFD in South and East India, 4) Savings in media costs and material procurement, 5) Reduction in number of depots and 6) Savings of 3% in Royalty costs as it now owns Horlicks brand. Synergy benefit of 250-300bps has been realized already, the HUL expects 550-700bps...