Hindustan Unilever Ltd. share price target

Revenue grew by 3.92% to Rs. 9356.0 Cr in Q1FY19 when compared to the previous quarter. Hindustan Unilever Ltd Q1FY19 results Comment

Hindustan Unilever (HUL) posted a strong set of numbers with comparable revenue growth of 11.2% YoY on the back of 12% volume growth. The strong volume growth has been mainly on account of double digit growth witnessed across all segments in addition to new launches gaining traction. In terms of comparable numbers, home care (34% of revenue), personal care (47% of revenue) and foods & refreshments segments (19% of revenue) grew 20%, 14% and 14%, respectively...

HUL announced the integration of food and refreshment categories in South Asia, effective from July 1, 2018. This integration will help HUL to increase organizational agility and better serve local consumers while harnessing the advantage of global scale. The integration of these two categories is also in alignment with the structure of Unilever globally....

We value HUL based on 45x P/E on Jun-20 EPS to arrive TP of Rs 1,709. We recently downgraded HUL to NEUTRAL owing to limited upside. HULs domestic revenue growth of 16% (like-like) driven by 12% volume growth was bang on with our estimates. Favorable base (5% revenue growth in 1QFY18), gradual improvement in demand drivers along with companys own initiatives (new launches, distribution expansion, digital push) aided growth. EBITDA/APAT grew by 21% each (in-line).

No massive positive surprise this time round HUL delivered another strong quarter but that is somewhat par for the course now, considering its recent results delivery plus the stock's heady valuation (59x NTM EPS). There was no massive surprise element this time round, though, to drive another leg of decisive upmove from an already elevated level, in our view. The stock had rallied 8-10% each after 2Q-3QFY18 results and up a massive 16% between 4QFY18 report and now - we expect reaction to be more lukewarm this time round, given that there was nothing in 1QFY19 report to prompt another round of earnings-upgrade. Key numbers: 12% volume growth...

Management highlighted rise in input inflation and competitive intensity. However, we believe margin expansion will continue, led by pricing actions, initiatives on supply chain restructuring and other cost-saving measures. Post the sharp appreciation, valuation at 50xFY20E EPS price in most positives and immediate upside looks unlikely. However, HUL still looks a good long-term bet as it offers faster growth v/s peers, high earnings visibility and has levers to provide more positive surprises in future. We maintain ACCUMULATE with revised TP of Rs1,750. Volume growth at 12% in line with expectations: HUL's underlying volume grew by 12%...

16 July 2018 to INR95b in 1QFY19. Domestic comparable consumer business sales rose 16% YoY, with underlying volume growth of 12% YoY (est. of +15%); base quarter volumes were flat. EBITDA grew 20.6% YoY to INR22.5b (est. of INR22.9b) and PAT (bei) rose 21.3% YoY to INR15.7b (est. led by a better mix, pricing action and cost savings. EBITDA margin expanded 180bp YoY to 23.7%, as higher adspend as % of sales (+150bp YoY to 12.2%) was offset by lower other operating expenses.

Net net, high valuations are justified, considering consistent market share gain, margin expansion and a hungry management not willing to lower its guard. Our TP rises to Rs 1,701 on 45x Jun-20E EPS (earlier Mar-20). Maintain BUY. We attended HULs annual investor meet. Our interaction with the companys senior management has further increased our confidence on its earnings trajectory over the next two to three years.

ICICI Securities Ltd | Retail Equity Research We attended the Annual Investor Meet of Hindustan Unilever (HUL) on June 6, 2018 where the company reiterated its positive outlook on the long term consumption story of India driven by urbanisation and premiumisation. The key thrusts for the company remain on a) strengthening the core portfolio, b) creating categories for future, c) premiumisation, d) market development both in terms of low penetrated products as well as creating need for future categories and e)...

This disruption is clearly visible in the sheer level of execution in the herbal portfolio not just limited to Lever Ayush (where the company has exhibited remarkable agility to move from conception to successful execution within a short period time in response to growing demand for Naturals) but also in the acquisition and highly successful scale-up of Indulekha, the launch of herbal variants in most of its key categories, and the launch of global products like Citra and St Ives. The huge importance given to analytics is another key disruption, which could provide the company with a long-term competitive advantage and enable it to overcome the difficulties posed by its relatively large size compared to peers. The high degree of independence given to teams looking into this region and the rapidly evolving local strategy across regional teams (CCBT Country Category Business Teams, 15 mini boards in action) have unlocked the latent potential for entrepreneurship within the company. Even other Asian markets like Indonesia, China and Philippines have 2x, 4x and 5x higher per capita consumption, respectively, than India, indicating huge room for growth.