Sharekhan has given Buy recommendation for Hindustan Unilever with a target price of Rs. 3185 in its research report issued on Sep 09, 2021
Sharekhan’s research report on Hindustan Unilever
The company is focusing on winning the next decade by achieving double-digit earnings growth by achieving sustained volume growth in core categories of home care and personal care, scaling up the foods and refreshment business coupled with gradual improvement in OPM. Growing the core through premiumisation, market development through new launches, cluster based approach through WIMI strategy, and distribution expansion remain key growth drivers in the medium to long run. Resilient demand in rural India would lead to better volume growth in the coming quarters. Raw-material pressure is under control with raw tea prices correcting from its high and price hikes undertaken across the portfolio in Q2FY2022. OPM likely to be at 24-25%.
We maintain Buy on Hindustan Unilever Limited (HUL) with a revised PT of Rs. 3,185. Leadership position in 80% portfolio, strong earnings visibility with well-defined strategies, and a healthy balance sheet with sturdy cash flows make it the best pick in the FMCG space.