Accumulate Hindustan Unilever; target of Rs 2956: KR Choksey

KR Choksey recommended accumulate rating on Hindustan Unilever with a target price of Rs 2956 in its research report dated July 26, 2024.

Broker Research

July 26, 2024 / 12:25 IST

Accumulate

KR Choksey's research report on Hindustan Unilever

For Q1FY25 HUVR reported revenue from operations of INR 157,070 Mn (+1.5% YoY) / (+3.3% QoQ), due to the impact of price reductions taken during the year as the company passed on the benefits of lower commodity prices to consumers. HUVR’s performance in Q1FY25 in line with our estimates. HUVR's Q1FY25 robust performance was primarily due to gradual rural demand, stronger gross margins, and a focus on premiumization across all categories, which contributed significantly to its overall revenue growth and profitability. Adj. PAT stood at INR 26,580 Mn, increased by 2.6% YoY (+7.2% QoQ), missed our estimates by 2.2% due to slightly lower than expected operating performance. We revise our FY25E/ FY26E Adj. EPS estimates by +2.6%/ +1.3%, respectively, leading to better-than-expected volume growth reported in Q1FY25 and improving product mix.

Outlook

We assign a raised P/E multiple of 56.0x on FY26E EPS of INR 52.8 to arrive at a target price of INR 2,956 per share, and we maintain ACCUMULATE rating on the shares of Hindustan Unilever Ltd.

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