Accumulate Hindustan Unilever; target of Rs 2610: KR Choksey

Accumulate

KR Choksey's research report on Hindustan Unilever

For Q3FY25, the revenue increased 1.6% YoY (-0.7% QoQ) to INR 158,180 Mn, largely in line with our estimates +1.2%. EBITDA remained flat on YoY basis(+ 0.8% YoY,-2.6% QoQ) to INR 36,950 Mn, beat our estimates by 2.0%. Adj. Net profit decreased by 2.4% YoY (-5.0% QoQ) to INR 24,770 Mn, missing our estimates by 3.2% mainly due to higher than estimated depreciation and tax expense. We lower our FY26E/FY27E Adj. EPS estimates by 1.5%/ 2.0%, respectively, factor in Q3FY25 performance and anticipated pressure on margin due to subdued demand. We expect Revenue/EBITDA/Adj. PAT to grow by 5.6%/ 6.9%/ 7.2% CAGR over FY24-27E. HUVR's share price is currently trading at 47.5x/43.5x its FY26E/FY27E EPS.

Outlook

We rollover our valuation multiple to FY27E and assign a P/E multiple of 49x on FY27E EPS of INR 54, arriving at a target price of INR 2,610 (previously INR 2,796). However, we expect strategic acquisitions and premiumization efforts support long term growth recovery. Subsequently, we maintain our ‘ACCUMULATE’ rating on the shares of Hindustan Unilever Ltd.

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Hindustan Unilever - 24012025 - kr