Edelweiss recommended hold rating on Hindustan Unilever with a target price of Rs 1106 in its research report dated May 17, 2017.
Edelweiss' research report on Hindustan Unilever
Hindustan Unilever (HUL) reported in-line Q4FY17 revenue growth of 6.4% YoY, while EBITDA (12.2% YoY) and PAT (7.6% YoY) growth surpassed estimates. Volume growth of 4% YoY was a sharp recovery from the 4% YoY dip in Q3FY17 with domestic growth of 8% YoY aided by healthy pricing growth (recouped after many quarters).
HUL is key beneficiary of share gains helped by GST. Increased launches in natural space will contain share loss and propel growth. However, success of new launches is key. Impact of cannibalisation on core portfolio is a monitorable. At CMP, the stock is trading at 36.5x FY19E. We maintain ‘HOLD/SP’ with target price of INR 1,106.
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