Buy Hindustan Unilever; target of Rs 3109: KR Choksey

KR Choksey's research report on Hindustan Unilever

HUVR reported revenue from operations of INR 1,54,960 mn in Q1FY24, delivering a 6.0% YoY/ 1.8% QoQ growth. Revenue from the Home Care segment grew by 10.0% YoY but declined by 3.8% sequentially. Beauty & Personal care segment revenue grew by 4.8% YoY/ 7.8% QoQ. Food & Refreshment segment revenue grew by 4.7% YoY and was flat QoQ. EBITDA for the quarter was at INR 36,650 mn, a growth of 7.7% YoY/ 2.5% QoQ. EBITDA margin expanded by 39 bps YoY/ 16 bps QoQ to 23.7%. Net profit was at INR 25,540 mn, a growth of 7.3% YoY but a decline of 1.8% QoQ. Adj. Net Profit grew by 8.3% YoY/ 2.8% QoQ to INR 25,910 mn.

Outlook

We expect Revenue/EBITDA/Adj. PAT to grow by 9.2%/ 12.9%/ 13.6% CAGR over FY23-25E. We assign a P/E multiple of 57x to the FY25E EPS of INR 54.5 to arrive at a target price of INR 3,109 per share (unchanged) with an upside of 19.4%. We maintain our rating ‘BUY’ rating on the stock.

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