Edelweiss has a hold call on Hindustan Unilever Ltd.
with a target price of Rs 1887.
The current market price of Hindustan Unilever Ltd.
is Rs 1643.8.
Time period given by the brokerage is a year when Hindustan Unilever Ltd.
price can reach the defined target.
Hindustan Unilever Ltd., incorporated in 1933, is a largecap company with a market cap of Rs 364470.22 crore.Investment rationale by EdelweissHindustan Unilevers (HUL) Q1FY19 revenue, EBITDA and adjusted PAT growth of 11.2%, 20.6% and 22.5%, respectively, came in line with our estimates.
The 12% YoY volume growth also came in line with our estimate.
Whats even more encouraging is that the growth was broad based aided by gradual improvement in demand.
Gross margin expanded ~197bps on account of favourable mix and judicious pricing.
EBITDA margin also rose 185bps YoY despite ad spends jumping 27.4% YoY (up 155bps YoY)the right strategy in our view.
New launches, performance of Indulekha Ayush and revival of rural demand are potential triggers.
Maintain HOLD as from current level (52.7x FY20E EPS), the stock offers limited upside.