Reduce Hindustan Unilever; target of Rs 2315: HDFC Securities
HDFC Securities recommended reduce rating on Hindustan Unilever with a target price of Rs 2315 in its research report dated January 28, 2021.
January 28, 2021 / 03:48 PM IST
HDFC Securities' research report on Hindustan Unilever
HUL posted a mixed result, with revenue/EBITDA growth of 20/17% (HSIE 18/19%). Ex-GSK, revenue grew by 7% YoY with UVG of 4% YoY (in-line). The company saw a recovery in demand for discretionary as well as OOH categories and revenue pressure eased out. Health, Hygiene and Nutrition (80% mix) continued to deliver strong double-digit growth, supported by new launches and price hikes. Market share gains in e-comm (market share above pre-COVID level) and strong rural growth (2x YoY) drove revenue growth. Nutrition portfolio (GSK) posted double-digit growth, and supply issues are over. High commodity inflation impacted GM, despite an improved product mix. A&P expenses returned to growth as the company resumed investments.
We expect a sustained recovery in the discretionary portfolio along with growth acceleration in nutrition portfolio. We maintain our EPS estimates for FY21/FY22/FY23. We value HUL at 52x P/E on Mar-23E EPS to derive a TP of Rs 2,315. Maintain REDUCE, as there is limited scope for re-rating.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.