Buy Hindustan Unilever: target of Rs 2790: Sharekhan
Sharekhan is bullish on Hindustan Unilever has recommended buy rating on the stock with a target price of Rs 2790 in its research report dated July 22, 2021.
July 26, 2021 / 09:21 PM IST
Sharekhan's research report on Hindustan Unilever
Hindustan Unilever’s (HUL) Q1FY2022 performance was mix, with revenue rising by 13% driven by a 9% domestic volume growth; raw material inflation hit OPM that was tad lower than our expectation, at 23.9%. After a disrupted May 21, demand recovered in June 21 to March 21 levels. Rural growth outpaced urban growth. HUL saw penetration improve for 80% of product portfolio and market share rise for two-thirds of portfolio. HUL aims to clock competitive volume growth by having customer-relevant portfolio assortment and ensuring strong back-end support. Likely correction in the raw material inflation, better product mix and synergies from GSK acquisition would drive up OPM in the medium term.
Stock has underperformed broader indices in the past year and currently trades at 48x FY2023E EPS. We maintain a Buy on the stock with a PT of Rs. 2,790.
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