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Last Updated : Jan 14, 2019 11:12 AM IST | Source: Moneycontrol.com

Hindustan Unilever may touch Rs 2,250: Anand Rathi

We estimate the company to report revenues of Rs 401,280million in FY-19E and Rs 457,561 million in FY-20.

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Anand Rathi

Hindustan Unilever (HUL) is India’s largest fast-moving consumer goods (FMCG) company with a heritage of over 80 years.

Each of its categories – Home Care, Personal Care, Foods and Refreshments – includes a portfolio of brands that serves consumers across the length and breadth of India. With over 40 brands spanning 20 distinct categories including soaps, detergents, shampoos, skincare, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, frozen desserts, water and air purifiers.

Its portfolio includes leading brands such as Lux, Lifebuoy, Surf excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakme, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, BRU, Knorr, Kissan, Kwality Wall’s and Pureit. The products are available in over seven million outlets across India.

With HUL being largest FMCG company with one of the largest footprint in terms of products and distribution network and its strategy to target volume growth primarily should drive health growth in medium term. The company has also entered into health drinks segment with proposed amalgamation of GSK Consumer business which we believe is value neutral while earnings accretive for HUL at current ratio.

In terms of per capita FMCG consumption India stands lowest within its developing country peers at just around US$29 as against Indonesia which amounts to almost double while China at four times India’s consumption.

We expect HUL to grow at a CAGR of 13.5% in next two years. We estimate the company to report revenues of Rs 401,280million in FY-19E and Rs 457,561 million in FY-20.

The operating margins for the company should continue to improve with our estimate of around 120 basis points over two years. We expect company’s EBITDA margins to be around 21.8% in FY-19E and 22.3% in FY-20E.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jan 14, 2019 11:11 am
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