Sharekhan is bullish on Hindustan Unilever has recommended buy rating on the stock with a target price of Rs 2550 in its research report dated July 21, 2020.
Sharekhan's research report on Hindustan Unilever
Q1FY2021 performance was better than our as well as the street’s expectation with revenue and PAT growing by ~4% and ~8%, respectively. Core business performed well with just a 7% decline compared to ours as well as street’s assumption of 12-13% decline. OPM was affected by unfavourable mix and higher COVID-19-related expenses. However, the same is expected to recover in coming quarters as business normalises (skin care and personal care regaining momentum). Recovery in rural demand, strong demand for hygiene and nutritional products and market share gains in key categories will be key revenue drivers in the near term. The company paid special dividend of Rs. 9.5 per share. We have raised earnings estimates by ~5% and ~4% for FY2021 and FY2022.
Outlook
We retain our Buy recommendation on the stock with a revised PT of Rs. 2,550.
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