Buy Hindustan Unilever; target of Rs 1525: Axis Direct
Axis Direct is bullish on Hindustan Unilever has recommended buy rating on the stock with a target price of Rs 1525 in its research report dated January 23, 2018.
February 07, 2018 / 04:37 PM IST
Axis Direct's research report on Hindustan Unilever
HUL topped estimates for the fourth consecutive quarter in Q3. Comparable^ domestic consumer revenue grew ~17% on ~11% volume growth (vs. consensus expectation of 8-9% volume growth). Benign input costs and benefits from cost saving initiatives absorbed effect of step-up in A&P spends (+25% YoY), leading to 24% EBITDA growth (comparable^ OPM expanded 110 bps YoY). Post GST rate cuts in mid- Nov, effective price reduced by 7-9% for relevant portfolio.
We expect OPM to increase by 350-400 bps over FY17-20 on multiple margin tailwinds. We expect 11% revenue and 19% EPS CAGR over FY17-20E. Maintain BUY with revised TP of Rs 1,525 based on forward P/E of 46x.
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