Buy Hindustan Unilever; target of Rs 3100: Motilal Oswal

Motilal Oswal is bullish on Hindustan Unilever recommended buy rating on the stock with a target price of Rs 3100 in its research report dated July 21, 2023.

Broker Research

July 22, 2023 / 12:47 IST

Buy

26 Aug, 2025 12:21

Volume

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Motilal Oswal's research report on Hindustan Unilever

Hindustan Unilever (HUVR)’s 1QFY24 performance fell slightly short of our expectations. During the quarter, volumes grew 3% YoY vs. expectation of 7% growth, as higher inflation is adversely impacting consumer spending. In 1QFY24, rural market delivered volume growth. While we expect this momentum to continue; however weather patterns remain a critical factor to monitor. The company is normalizing A&P spends to revive volume and bring it back to pre-COVID levels, which represents 9.8% of sales. Management mentioned about funnelling the gross margin expansion towards adspends to drive volume growth. However, the 120bp YoY increase in ‘other expenses’ is due to a step-up in investments, the impact of new royalty incentives, and favorable benefits in the base quarter.

Outlook

The outlook for HUVR remains balanced with lower commodity costs and gradual recovery in rural demand offset by reduced leverage on pricing and increased competition from smaller players in some categories. We reiterate our BUY rating with a TP of INR 3,100.

For all recommendations report, click here