Hindustan Unilever Ltd. share price target

ICICI Securities Ltd | Retail Equity Research HUL reported a healthy set of numbers with revenue growth of 11.1% YoY on the back of 10% volume growth. The strong volume growth was mainly on account of double digit growth seen across all segments in addition to new launches gaining traction. Home care (34% of revenue), personal care (47% of revenue) and foods &...

HUL has delivered another strong quarterly performance, with double digit sales YoY growth across all three divisions of home, personal care and food. Overall domestic volume growth was in line with estimates at 10% for Q2FY19 versus 12% sequentially and 4% YoY. Net sales grew 11.1% YoY to Rs 92.3 bn indicating a YoY price increase of meagre 1.1% because of intense competition. However, the company is growing ahead of the industry on the back of WIMI strategy, as also innovations and activations. The company also continues to make margin gains through cost management and favorable...

The double-digit volume growth delivered by Hindustan Unilever (HUL) in Q2FY19 is impressive and marginally ahead of expectations, indicating continued improvement in consumer demand driven by rural recovery. Despite rising input cost pressures, management is confident of delivering a modest operating margin expansion, driven by pricing actions and cost efficiencies. EBITDA...

We value HUL based on 45x P/E on Sep-20 EPS to arrive at TP of Rs 1,691. HUL was our top pick, but considering rich valuation and limited upside, we downgraded the stock in 1QFY19 to NEUTRAL. HUL reported another quarter of broad-based growth with revenues growing by 12.5% (exp. 13%) with adjustment of 1% fiscal refunds. Volume growth was healthy at 10% (exp. 9%) driven by rural recovery, favorable base (4% in 2QFY18) and market share gain. Robust margin expansion resulted in EBITDA/APAT growth of 20/23% (exp. 18/18%).

12 October 2018 to INR92.3b in 2QFY19. Domestic comparable consumer business sales increased 12% YoY, with underlying volume growth of 10% YoY (in-line). EBITDA grew 20% YoY to INR20.2b (our led by RM inflation. However, EBITDA margin expanded 160bp YoY to 21.9%, driven by cost efficiencies and operating leverage. PAT grew 11.2%, 20.3% and 22.2%, respectively. Demand sustained in 2QFY19; expected to be stable in near term. (2) Rural growth continues exceeding urban growth.

Another best-in-class delivery but largely in the price now HUL's 2QFY19 key operating metrics comprising volume growth of 10%, revenue growth of 12% and 160bps expansion in operating margin were undoubtedly strong and commendable but were all bang on expected lines and no more a massive positive surprise as such. We expect the stock to be more range-bound hereonwards. Focus would be more on what the volume delivery for 3QFY19 and thereafter would be, since double-digit volume growth' would be in the base from 3Q onwards. Management remains quite confident and upbeat; key commentaries: 1) Demand outlook is stable. 2) Rural growing ahead of urban....

HUL's volume performance was in line with our estimate (+10%) while the operational performance was a beat. Volume growth was led by (1) improvement in rural growth (1.2-1.25x urban) (2) and increase in sales reach. We believe that the performance was encouraging as in the fourth consecutive quarter the company has delivered double digit volume growth and margin expansion. We expect that the volume growth would reduce to single digit due to unfavorable base; 6%+ volume growth over a medium-term can be taken sanguinely considering the size of the...

the quarter, revenue of the home care category grew by 12%, with sustained double-digit volume-led growth across key categories. PBIT margin of the home care category improved by ~200 BPS y-o-y to 16% in Q2FY2019. The personal care category registered revenue growth of 10.4%, with skin care, hair care and personal wash segments registering doubledigit growth. PBIT margin of the personal care...

Rural continues to grow ahead of urban (but has still not accelerated to the pace seen a few years ago vis--vis urban growth). Rural volumes are now growing at 1.5x of urban while value is at 1.3x of urban. Management stated that two-year CAGR on volumes should be in the range of 6-8%, going forward, which augurs well for growth in subsequent quarters. Crude and currency are playing an active role in driving up inflation in the home care product portfolio. In the personal care portfolio, oil costs have remained benign. HUL has taken a price hike of 3-4% across products and stock keeping unit (SKUs) in the home care, household care and laundry portfolio, and some hike in the personal care portfolio as well, during the quarter. Some of the price hikes taken may be reflected in the subsequent quarter. Company believes the inflation level is not alarming and should get mitigated by pricing action and cost savings.