KR Choksey's research report on Hindustan Unilever
Hindustan Unilever Ltd (HUL) posted its Q1FY19 results which were above our estimates on YoY basis. Net revenue for Q1FY19 stood at INR 94.8 Bn (+11.2 YoY), as against our estimate of INR 92.8 Bn. A revival in consumer sentiments and pick-up in consumer demand, especially in rural India has resulted in volume momentum during the quarter. The top line was mainly driven by Foods & Refreshments segment, which reported revenue of INR 17.8 Bn (+8% YoY). EBIDTA stood at INR 22.5 Bn (+20.6% YoY), with OPM at 23.7% (+185 bps YoY). Reduction in purchase of trade goods by 20% on YoY basis has resulted in higher EBITDA and OPM during the quarter. PAT for Q1FY19 stood at INR 15.3 Bn (+19.2% YoY), with NPM of 16.1% (+107 bps YoY). An increase in other income by 19.5% YoY has resulted in higher PAT and NPM during the quarter.
Outlook
At CMP of INR 1,640 HUL is trading at P/E of 54.5x for FY20E. We assign P/E multiple of 59.8x and revising the target price to INR 1,800 with ��ACCUMULATE�� rating on the stock representing an upside of 9.8%.
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Read More First Published on Jul 20, 2018 05:05 pm
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