Motilal Oswal is bullish on Hindustan Unilever has recommended buy rating on the stock with a target price of Rs 2125 in its research report dated March 15, 2019.
Motilal Oswal's research report on Hindustan Unilever
We spoke to the management of Hindustan Unilever (HUL) for an update on the overall market conditions. Key takeaways: A small short-term blip was seen in 4QFY19 demand. But, we had already built in 8% volume growth for 4QFY19 v/s double-digit growth of the preceding five quarters. Measures announced in the budget are expected to benefit demand from 1QFY20 onwards. We see no immediate threat to our FY20 forecast of 7.5% volume growth. We believe HUVR will continue to outperform peers over the medium term. Material cost outlook remains benign, ad spends & promotion intensity have not picked up erratically and cost savings continue at the targeted pace.
We maintain BUY rating on the stock with a target price of INR2,125, target multiple of 52x FY2021 EPS (which is ~15% premium to 3-year average due to significantly improving business fundamentals).
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