Buy Hindustan Unilever; target of Rs 2240: Sharekhan
Sharekhan’s research report on Hindustan Unilever
In Q2FY2020, HUL’s revenue grew by 6.7% y-o-y, with volume growth sustaining at 5% (in-line with Q1FY2020 volume growth of 5%). Gross margin improved by 251 BPS, while operating profit margin (OPM) improved by 191 BPS on a comparable basis to 23.8%; operating profit grew by 16% on a comparable basis. Domestic business volume growth will stand at 5-7% in the near term; margin expansion would sustain due to benign input prices and better revenue mix.
We have broadly maintained our earnings estimates for FY2020/FY2021; maintain Buy with an unchanged PT of Rs. 2,240.
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