Hold Hindustan Unilever; target of Rs 1518: Edelweiss
Edelweiss has recommended Hold rating on Hindustan Unilever with a target price of Rs 1518 in its research report dated March 01, 2018.
April 05, 2018 / 05:51 PM IST
Edelweiss' research report on Hindustan Unilever
We met Mr. Sanjiv Mehta, MD & CEO of Hindustan Unilever (HUL). Key takeaways were: i) Long term opportunity in India remains attractive; ii) HUL remains agile as the Indian consumer is changing, riding global consumer trends; iii) The company is focused on bigger and faster innovations like Lever Ayush (did well in most geographies); iv) Categories of the future are growing at 2.5x HUL’s growth rate; and v) The company is getting future-ready by inculcating a growth mind-set, enriching capabilities, high performance anatomy along with purpose and values. In our view, new launches, clinical validation of Indulekha and pan-India roll out of Ayush along with revival of rural demand are potential triggers. Maintain ‘HOLD’.
We envisage HUL to be key beneficiary of anticipated rural recovery and herbal push. We estimate better-than-expected volume growth (trend too indicates the same) and with rural revival in the offing, we retain our target multiple of 47x and arrive at TP of INR1,518 on FY20E EPS. Maintain ‘HOLD/SP’ since at CMP stock offers limited upside.
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