Buy Hindustan Unilever, target price Rs 2840: Motilal Oswal

Motilal Oswal has buy call on Ltd. with a target price of Rs 2840. The current market price of Hindustan Unilever Ltd. is Rs 2388.7. Time period given by analyst is one year when Hindustan Unilever Ltd. price can reach defined target.

Hindustan Unilever Ltd., incorporated in the year 1933, is a Large Cap company (having a market cap of Rs 558767.47 Crore) operating in FMCG sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 12260.00 Crore, down -2.25 % from last quarter Total Income of Rs 12542.00 Crore and up 12.63 % from last year same quarter Total Income of Rs 10885.00 Crore. Company reported net profit after tax of Rs 2100.00 Crore in latest quarter.

Investment Rationale
After premiumization in Detergents led to strong growth in detergent sales and margin in the last decade, the Personal Wash and Dishwashing segments show considerable promise going forward. The high margin Discretionary portfolio was under pressure in FY21, resulting in lower than the usual 12% adjusted EPS growth. While the Jun’21 quarter was affected on this front due to lockdowns, the management commentary suggests substantial improvement in mix in subsequent quarters. Synergies from the GSKCH business (tracking ahead of earlier expectations) would play a bigger role in resumption of strong earnings growth going forward.

Promoter/FII Holdings
Promoters held 61.9 per cent stake in the company as of June 30, 2021, while FIIs held 15.1 per cent, DIIs 10.8 per cent and public and others 12.2 per cent.