Add Hindustan Unilever, target price Rs 2850: ICICI Securities

ICICI Securities has add call on Hindustan Unilever with a target price of Rs 2850. The current market price of Hindustan Unilever is Rs 2584.


Hindustan Unilever, incorporated in the year 1933, is a Large Cap company (having a market cap of Rs 622582.94 Crore) operating in FMCG sector.

Hindustan Unilever key Products/Revenue Segments include Personal Care and Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 15707.00 Crore, up 2.98 % from last quarter Total Income of Rs 15253.00 Crore and up 16.36 % from last year same quarter Total Income of Rs 13499.00 Crore. Company has reported net profit after tax of Rs 2481.00 Crore in latest quarter.

The company’s top management includes Mr.Nitin Paranjpe, Ms.Kalpana Morparia, Dr.Sanjiv Misra, Mr.O P Bhatt, Mr.Leo Puri, Dr.Ashish Gupta, Mr.Wilhelmus Uijen, Mr.Dev Bajpai, Mr.Ritesh Tiwari, Mr.Sanjiv Mehta, Ms.Ashu Suyash. Company has BSR & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 235 Crore shares outstanding.

Investment Rationale
HUL’s 3Q results met consensus expectations, however, increase in royalty and central service fees (by 80bps) has been a dampener. However, overall impact on operating margins shall be offset with mix-improvement (premiumisation) and scale-benefits.

The brokerage upgrades its earnings estimates by ~3% for FY24E; modelling revenue / EBITDA / PAT CAGR of 13 / 14 / 15 (%) over FY22-24E. Key downside risks are delayed recovery in demand, sustained raw material inflation and irrational competition.

Promoter/FII Holdings
Promoters held 61.9 per cent stake in the company as of December 31, 2022, while FIIs owned 14.32 per cent, DIIs 11.44 per cent.