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 January 06, 2020.
January 07, 2021 / 03:31 PM IST
Sharekhan's research report on Hindustan Unilever
A strong product portfolio, wide distribution reach and sturdy balance sheet make HUL an evergreen pick in the FMCG space. For Q3FY2021, we expect HUL’s core business volumes to grow by 6-7% as against 1% in Q2FY2021 driven by strong demand for winter products and sustained higher sales of personal wash products. Gross margins to remain under pressure led by higher input prices. However, judicious price hikes in key SKUs (soaps and tea) and a better revenue mix would ease pressure on gross margins in the coming quarters. Rural demand outpacing urban demand, improving growth prospects of health food drinks segment and expected recovery in discretionary demand remain key growth drivers in the near term.
We retain a Buy on HUL with a revised PT of Rs. 2790 (rolling it over to FY23E estimates).
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