​​​
  1. Edelweiss puts ‘Hold’ rating on Hindustan Unilever shares; target price Rs 935

Edelweiss puts ‘Hold’ rating on Hindustan Unilever shares; target price Rs 935

Hindustan Unilever’s (HUL) Q3FY17 revenue (down 1.2% year-on-year) surpassed estimate as volumes (4% year-on-year dip versus 7% forecast) were better despite demonetisation and calibrated price hikes.

By: | New Delhi | Published: January 26, 2017 4:28 AM
Demonetisation impact was prevalent across categories, though it varied depending upon the channel & geography mix and product category. Home care segment grew 1% year-on-year with Surf clocking double digit growth. (Reuters) Demonetisation impact was prevalent across categories, though it varied depending upon the channel & geography mix and product category. Home care segment grew 1% year-on-year with Surf clocking double digit growth. (Reuters)

Hindustan Unilever’s (HUL) Q3FY17 revenue (down 1.2% year-on-year) surpassed estimate as volumes (4% year-on-year dip versus 7% forecast) were better despite demonetisation and calibrated price hikes. Overall, underlying price growth of 4% year-on-year was led by price hikes in personal wash. Amidst rising input prices, overall gross margin fell 64bps year-on-year and 163bps q-o-q and 76bps year-on-year margin dip was largely due to lower operating leverage (ad spends remain competitive and fell mere 32bps year-on-year).

Though premiumisation trend has sustained, recovery will be gradual with easing in liquidity situation, particularly in the mass end. Success of new Ayush range is a key monitorable. Maintain ‘Hold’.

You May Also Want To Watch:

Demonetisation impact was prevalent across categories, though it varied depending upon the channel & geography mix and product category. Home care segment grew 1% year-on-year with Surf clocking double digit growth. Personal care sales dipped 2.7% year-on-year impacted further by price hikes in the personal wash segment.

We estimate 15% y-o-y EPS CAGR over FY17-19. We remain positive on long-term prospects led by volume recovery. Key risks are rising competition and increasing input prices. Hence, we maintain ‘Hold/SP’ with target price of Rs 935. At CMP the stock is trading at 33.2x FY19E.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Go to Top