Anand Rathi has given Buy recommendation for Hindustan Unilever with a target price of Rs. 2524 in its research report issued on Feb 17, 2021
Anand Rathi’s research report on Hindustan Unilever
Hindustan Unilever Limited (HUVR) has reported a growth of 20.6% in its revenues at ₹1,21,820 million in Q3-FY21 as against ₹1,01,030 million in Q3-FY20. The domestic consumer growth during the quarter was 7% with underlying volume growth at 4%. The company has seen a strong sequential pickup in the quarter and expects this to continue. Seven of its categories namely, household care, skin cleansing, hair, oral, tea, nutrition and packaged foods have grown in double digits. The company’s EBITDA margins for the latest quarter stood at 24.3% at ₹29,630 million as against 25% at ₹25,290 million in Q3-FY20. The profit after tax (PAT) margins for the company stood at 16% at ₹19,540 million as against 16.1% at ₹16,260 million. The operating margins declined marginally due to increase in raw material costs due to inflation which was largely mitigated by improved mix, leverage in operating costs and price hikes. In terms of business segments, Home Care segment reported a decline in growth at 1.4% on back of unfavourable category consumption mix due to covid-19.
We have updated our estimates factoring in latest numbers, we continue to remain positive on the company in the long run and maintain our BUY rating on Hindustan Unilever Limted (HUVR) with a revised target price of ₹2,524 per share.