Looking ahead, Reliance Securities expects HUL to witness the fastest earnings growth among the major FMCG companies, notwithstanding the size and scale of operations
Hindustan Unilever shares gained a percent on March 12 after Reliance Securities initiated coverage with a buy call on the stock, citing premiumisation and improving operational performance.
The brokerage said premiumisation has always been HUL's long-term strategy, as mass-market products are impacted by vagaries of market-owing to lower pricing power.
The key premium brands like Surf, Dove and Lipton clocked 11 percent, 14 percent and 18 percent CAGR, respectively, over the last six years significantly outpacing their respective category growth.
HUL has lost market share in its mass-market brands like Wheel due to higher competitive pressure, while the stronger growth in premium brands has helped in sustaining revenue growth and market share.
Looking ahead, the research house expects HUL to witness the fastest earnings growth among the major FMCG companies, notwithstanding the size and scale of operations.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.