Prabhudas Lilladher's research report on Hindustan Unilever
We remain constructive on HUL post 3Q Concall given improving growth outlook led by 1) Robust growth across Health, Nutrition and Personal care, 2) Increasing distribution reach, 3) Strong portfolio of new products in Hygiene, Nutrition and Personal care 4) restoration of supply chain 5) higher share in distribution platforms of future (MT and e-com) and 6) Synergy benefits from GSK merger. We expect steady built up in growth momentum led by increase in demand for discretionary, out of home and Nutrition. Although HUL has undertaken 5% price increase in Personal wash and upto 15% price increase in Tea, its strategy of share gain with aggressive pricing will pay off in coming years.
Outlook
We expect near term margin pressure in select categories of Tea and P wash, however worst seems over given F&R margins in 3Q (ex GSK) at just 8-9% (Est). We estimate CAGR of 11.6/15.7/18.2% in Sales, EBIDTA and EPS over FY21-23. Retain Buy with DCF based target price of Rs2502.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.