MOSL: Morning India (18/January/18): 1. Hindustan Unilever 2. Larsen & Toubro 3. Bharti Infratel 4. Zee Entertainment 5. Jubilant Life 6. Mindtree 7. Delta Corp 8. Jyothy Labs 9. DCB Bank 10. S H Kelkar 11. Hea
MOrning India (18/January/18): 1. Hindustan Unilever; 2. Larsen & Toubro; 3. Bharti Infratel; 4. Zee Entertainment; 5. Jubilant Life; 6. Mindtree; 7. Delta Corp; 8. Jyothy Labs; 9. DCB Bank; 10. S H Kelkar; 11. Healthcare
Today’s top research idea
Hindustan Unilever: Impressive volumes; Strong margin expansion despite high adspend
- HUVR’s 3QFY18 net sales rose 11.5% YoY to INR85.9b. Domestic consumer business grew 17% YoY, with 11% underlying volume growth. EBITDA increased by 23.9% YoY to INR16.8b (est. of INR16b) and PAT (bei) by 30.2% YoY to INR12b (est. of INR10.9b).
- We believe that four key trends are particularly relevant for HUL, which should lead to an elevation in its earnings growth trajectory compared to the past – (i) rapidly improving adaptability to market requirements, (ii) recognition of Naturals as a key sub-segment across categories, (iii) continuing strong trend toward premiumization and (iv) extensive plans to employ technology.
- On a target multiple of 50x Dec’19 EPS (well-deserved 15% premium to three-year average due to significantly improved business fundamentals), we get a revised target price of INR1,585. Maintain Buy.
Piping hot news
India to auction 55 oil and gas exploration blocks
- India will begin the auction of 55 oil and gas exploration blocks from Thursday under new rules, the country's first licensing round after eight years, as it seeks to unlock its vast hydrocarbon resources, the upstream regulator said. The world's third biggest oil importer last year eased rules and allowed companies to carve out areas where they want to drill to attract greater interest and quickly monetise as much as 220 billion barrels of oil and gas resources.
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