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Hold Hindustan Unilever; target of Rs 1106: Edelweiss

May 20
00:45 2017

Edelweiss’ research report on Hindustan Unilever

Hindustan Unilever (HUL) reported in-line Q4FY17 revenue growth of 6.4% YoY, while EBITDA (12.2% YoY) and PAT (7.6% YoY) growth surpassed estimates. Volume growth of 4% YoY was a sharp recovery from the 4% YoY dip in Q3FY17 with domestic growth of 8% YoY aided by healthy pricing growth (recouped after many quarters).

Outlook

HUL is key beneficiary of share gains helped by GST. Increased launches in natural space will contain share loss and propel growth. However, success of new launches is key. Impact of cannibalisation on core portfolio is a monitorable. At CMP, the stock is trading at 36.5x FY19E. We maintain ‘HOLD/SP’ with target price of INR 1,106.

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