Sharekhan's research report on Hindustan Unilever
Hindustan Unilever’s (HUL) revenues and adjusted PAT grew by 16% and 9% in Q2FY2023. Domestic volumes growth stood at 4% versus mid-single digit volume decline for the industry. Market share gains in over 75% of portfolio and consistent growth in premium portfolio helped in posting resilient volume growth ahead of industry. Pricing growth will stay ahead of volume growth for a while. Recovery in rural demand will help improve volume growth trajectory. Raw material inflation stood at 22% in Q2FY2023 (price increases stood at 12%). Recent correction in palm oil prices, would help moderate raw material inflation and will lead to sequential gross margin improvement. Stock trades at 64.2x/54.1x its FY2023E/24E earnings.
Outlook
We maintain our Buy on the stock with a revised price target of Rs. 3,005.
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