Prabhudas Lilladher recommended accumulate rating on Hindustan Unilever with a target price of Rs 1816 in its research report dated July 23, 2019.
Prabhudas Lilladher's research report on Hindustan Unilever
We upgrade HUVR from HOLD to Accumulate given that HUVR should emerge as one of the biggest gainers from Govt's social push aimed at bottom end of pyramid and increase in rural purchasing power on improved monsoons and food inflation. Although 2Q outlook remains uncertain, We remain structurally positive on HUVR led by 1) expansion in categories of future by launching liquid detergent in Sunlight 2) increased thrust on naturals with launch of Lux botanicals and Pears Naturale, two variants in Sunsilk and FAL Ayurveda facewash and facial kits 3) sustained Premiumisation in Home Care 4) synergy gains from acquisition of Glaxo Consumer healthcare and 5) sustained gains (70bps in 1QFy20) from cost efficiencies in supply chain, data analytics and inventory management.
Outlook
We estimate FY21 pro-forma EPS including GSK acquisition of Rs38.3 and value the stock at 46xJune21 arriving at target price of Rs1816. We strongly advise Accumulating HUL in uncertain markets.
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