Hindustan Unilever Ltd. share price target

Operating profit increased by 24% Y-O-Y to `2048crs in Q4FY18. EBITDA Margin stood at 22.5% as opposed to 20.1% in the corresponding quarter last year. The comparable EBIDTA margin expanded by 160 bps. FY18 EBIDTA stood at `7260 crs up 20% yoy....

We upgrade our multiple to 45x (43x earlier) P/E on Mar-20EPS to arrive at a TP of Rs 1,615. We re-iterate BUY. HULs revenue on a like-like basis grew by 16% to Rs 90.9bn (12% expectation). UVG was at 11% (4% in 4QFY17 and 11% in 3QFY18) vs. our expectation of 6.5%. There was a strong beat on EBITDA/APAT growth of 24/26% vs. our expectation of 16/13%.

Q4FY18 posted robust volume and operational performance abetted by (1) favorable rural base (2) normalisation of trade channels and (3) revamp of rural growth. We believe that the performance was encouraging considering HUL reported 8.5%/7.4%/18.0%/15.4% revenue/volume/EBITDA/APAT CAGR over Q4FY16-Q4FY18 compared to 0.6%/4%/11.7%/18.3% over Q4FY15-Q4FY16. In addition, HUL reported better volume performance compared to peers like Dabur, BCL, Marico, GCPL, etc. We expect that the volume growth would remain high in the coming quarters considering revival in the rural markets 6%+ volume growth over a medium-term can be taken sanguinely considering...

HUVR's 4QFY18 reported net sales grew 10.8% YoY to INR91b. Domestic comparable consumer business sales were up 16% YoY, with underlying volume growth of 11% YoY (est. of +7%). EBITDA grew 24% YoY to INR20.5b(est. of INR19.1b) and PAT (bei) rose 26% YoY to INR14.1b (est. of INR13b). Gross margin expanded 150bp YoY to 52.6%. Other operating expenses as % of sales were down 90bp YoY. Thus, EBITDA margin expanded 240bp YoY to22.5%. Comparable margin expanded 160bp YoY

Market demand has been improving gradually over the past few quarters.Encouragingly, growth has been broad-based across categories and regions. Central India continues to do better than the rest of the regions for HUL, in linewith the company's strategy . Although rural performance has improved, there is still no kicker to rural demand. Rural demand growth is yet to reach the buoyant historical levels, when it was 1.5-2x of urban demand growth. 3QFY18 had the benefit of a low base, which would be missing in 4QFY18

HUL topped estimates for the fourth consecutive quarter in Q3. Comparable domestic consumer revenue grew ~17% on ~11% volume growth (vs. consensus expectation of 8-9% volume growth). Benign input costs and benefits from cost saving initiatives absorbed effect of step-up in A&P; spends (+25% YoY)

Reported Profit after Tax (after accounting for exceptional items) grew by 27.7% Y-O-Y to `1326crs in Q3. PAT Margins stood at 15.4% as opposed to 13.5% in the same quarter in previous year. Exceptional Items, includes restructuring expenses and profit on...

We value HUL based on 43x P/E on Dec-19EPS to arrive at a TP of Rs 1,514. We maintain BUY. HULs net revenue grew by 10.8% to Rs 83bn. Like-to-like growth was at 17%, better than our expectation of 11%. Fiscal refunds contributed 2% to revenue. UVG was at 11% (4% in 2QFY18 and -4% in 3QFY17), vs. our expectation of 8.5%. EBITDA and APAT increased by stellar 24% and 30% respectively.

Stellar Performance on Lower Base & Demand Recovery On the back of lower base effect coupled with increased growth momentum, Hindustan Unilever (HUL) has reported strong set of numbers for 3QFY18. While net sales came in at Rs83.2bn (vs. our estimate of Rs83.7bn), EBITDA grew by 24% YoY to Rs16.8bn (vs. our estimate of Rs16.5bn) and net profit before exceptional items surged 30.2% YoY to Rs12bn (vs. our estimate of Rs11bn). Revenues on comparable base grew by a healthy 17% YoY. Growth in net profit was also aided by 83% YoY increase in other income to Rs1.5bn (Dividend from subsidiary). Volume growth for...