Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessStocks

Reduce Hindustan Unilever; target of Rs 2400: HDFC Securities

HDFC Securities recommended reduce rating on Hindustan Unilever with a target price of Rs 2400 in its research report dated January 19, 2023.

January 20, 2023 / 02:51 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

HDFC Securities' research report on Hindustan Unilever

HUL reported marginally better revenue growth at 16% (HSIE 14%), with volume growth of 5% (HSIE 5%). Three-year revenue and volume CAGRs stand at 11% and 3.5%. Home care remained the showstopper, revenue/EBIT grew by 32/23% YoY. BPC clocked revenue/EBIT YoY growth of 10.5 %/flat and F&R reported 7/2% YoY growth. Consistent above-the-par delivery of home care has been helping the company register better than the industry show (reeling with a single-digit volume decline in the last nine months). GM and EBITDA margin improved sequentially (largely in-line) but tepid YoY, resulting in EBITDA growth of 8% (HSIE 7%). The company also announced an increase of 80bps in the royalty rate (to 3.45%) to be carried over the next three years (an increase of 45/25/10bps each year). With RM softening phase, the royalty increase will not pinch much but will limit the margin expansion.


Outlook

Our view remains the same: demand pick-up will be gradual while margin recovery will be faster. We cut EPS estimate for FY24/25 by 1/2%. We value the stock on 47x P/E on Dec-24E EPS to derive a TP of INR 2,400. Maintain REDUCE.

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.

Hindustan Unilever - 20 -01-2023 - hdfc

Broker Research
first published: Jan 20, 2023 02:51 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347