The FMCG major‘s Win in Many Indias (WIMI)strategy has helped it to increase its focus on local markets and has been a big gain for categories such as detergents, soaps and tea.
HUL is targeting to become 'Wikipedia of personal care' in India betting high on the business unit. Shares of the company rose 1 percent intraday on Monday when the market is struggling under Greece crisis. Credit Suisse seems to be impressed and convinced that HUL is in the midst of a virtuous cycle of growth and way ahead of peers in its thought leadership and execution. The brokerage has an outperform rating on the stock.
“HUL has a vision of becoming the ‘Wikipedia of personal care’ in India by not leaving any consumer need or positioning in this category. Key successes in FY15 have been the recovery of Fair & Lovely and the launch of Tressemme,” the report says.
The FMCG major’s Win in Many Indias (WIMI)strategy has helped it to increase its focus on local markets and has been a big gain for categories such as detergents, soaps and tea.
However, CLSA holds sell rating with an increased target of Rs 810 from Rs 775 per share as it finds valuation expensive, though it believes HUL is several steps ahead of peers and has solid fundamentals.
After single-digit earnings per share (EPS) growth in FY14-15, partially due to fiscal headwinds (rise in excise duty and tax rates), CLSA expects earnings to accelerate to a 16 percent Cagr over FY15-18.
"There is a high focus across distribution channels, including rural, chemist, modern trade and even e-commerce. Cost saving is also an important focus and several projects are underway to drive this. The company reduced 31 percent of its stock-keeping units (SKUs) which had an insignificant impact on revenue, but meaningful benefits on cost," it explains in a report.
At 13:22 hrs Hindustan Unilever was at Rs 892.20, up Rs 5.80, or 0.65 percent on the BSE.
Posted by Nasrin Sultana