Accumulate Hindustan Unilever; target of Rs 1500: KRChoksey
KRChoksey recommended accumulate rating on Hindustan Unilever with a target price of Rs 1500 in its research report dated January 18, 2018.
January 24, 2018 / 11:52 AM IST
KRChoksey's research report on Hindustan Unilever
Hindustan Unilever Ltd (HUL) posted its Q3FY18 results which were marginally below our estimates on YoY basis. Net revenue for Q3FY18 reported at INR 85,900.0 Mn which grew by 3.3% YoY and 3.4% QoQ. The Home Care segment reported revenue of INR 27,410 Mn with a growth of 1.9% on YoY basis. The 9MFY18 numbers are also positive, during the period HUL reported revenue of INR 261,210 Mn with a growth of 4.8% on YoY basis. During the Q3FY18, the domestic consumer growth on comparable basis was 17% and volume growth was around 11%. EBIDTA for Q3FY18 stood at INR 16,800 Mn with margins at 19.6% which increased by 326 bps YoY and de-grew by 69 bps QoQ. EBITDA for 9MFY18 stood at INR 66,662 Mn which grew by 51.7% YoY. PAT after exceptional item for Q3FY18 stood at INR 13,260 Mn and PAT margin was at 15.4% which was an increase of 296 bps YoY 13 bps QoQ. PAT for 9MFY18 stood at INR 53,230 Mn which grew by 61% YoY.
We expect revenue growth of around 5% in FY18E & FY19E on back on improving demand scenario, premium products, brand recall, etc. Whereas we would see improvement in its EBIDTA and PAT margins due to its ongoing strategy of controlling cost, Its margins will be around 18.1% and 13.2% in FY19E. At CMP 1,372, HUL is trading at EPS of INR 24.4 its FY20E and we are revising the target price to INR 1,500 with “ACCUMULATE” rating on the stock and an upside of 9.3%.
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