Buy Hindustan Unilever; target of Rs 2840: Motilal Oswal

Motilal Oswal is bullish on Hindustan Unilever recommended buy rating on the stock with a target price of Rs 2840 in its research report dated dated July 22, 2021.

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

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Motilal Oswal’s research report on Hindustan Unilever

HUVR’s 1QFY22 result was better than our expectations led by topline growth. Sales in the month of Jun’21 were reportedly back to levels seen before the second COVID wave witnessed in Mar’21, and augurs well for Discretionary sales and margin going forward. Despite the higher incidence of COVID-19 cases in rural India compared to last year, the demand momentum remains resilient. The expectation of a good monsoon should sustain this momentum. Urban demand is expected to see a strong rebound. With Discretionary demand back on the recovery path, mix improvements will play a major role in driving a gradual margin improvement sequentially.

Outlook

We maintain our BUY rating, with a TP of INR2,840 (55x Sep’23E EPS).

For all recommendations report, click here

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