Buy Hindustan Unilever; target of Rs 2910: Sharekhan

Buy

Sharekhan's research report on Hindustan Unilever

HUL’s Q2FY24 numbers were mixed with revenues and PAT (excluding one-offs) growing by 3% and 7%, y-o-y respectively. OPM improved by 91 bps to 23.8% driving better PAT growth. Volume growth at 2% was a slight miss on expectation. Moderation in inflation, stability in price cuts in key product categories and festive season will help in gradual pick in volume growth. Urban demand remains steady while rural demand is witnessing a slow recovery. Lower input prices would keep gross margin healthy. A large part of savings will be invested in higher ad spends given increased competitive intensity. Impact of global uncertainly needs to be monitored in the near term.

Outlook

Stock has underperformed for the past one year and trades at 55x/48x its FY2024E/FY2025E earnings. We retain Buy with a revised price target of Rs. 2,910.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Hindustan Unilever - 20 - 10-2023 - khan