MOSL: HINDUSTAN UNILEVER (Buy)-In-line results; mix improvement on track
HINDUSTAN UNILEVER: In-line results; mix improvement on track
(HUVR IN, Mkt Cap USD79.4b, CMP INR2546, TP INR3200, 26% Upside, Buy)
- Hindustan Unilever (HUVR)’s 2QFY22 results were in line with our estimates. While domestic volume growth was weaker than expected at 4% for the quarter, strong realization growth actually led to a small beat on sales.
- While commodity costs remain elevated, we believe mix improvement would lead to continued sequential margin improvement. HUVR’s share of the Discretionary and Out-of-Home (OOH) portfolios (~15% of sales) is higher v/s peers. Moreover, these businesses have much higher margins than the rest of the portfolio. As a result, the earnings growth outlook from 2HFY22 is incrementally better v/s peers.
- We maintain our BUY rating on the stock.
Performance in line with estimates
- Reported net sales grew 11.2% YoY to INR127.2b in 2QFY22 (est. INR125.9b). EBITDA/PBT/PAT (bei) increased 9.2%/7.7%/7.5% YoY to INR31.3b/INR29.5b/INR21.9b (est. INR31.1b/INR29.5b/INR21.8b).
- Sales in the domestic Consumer business grew 11% YoY, with underlying volume growth of 4% (est. 6%).
- Segmental performance: Home Care (30% of total sales for 2QFY22) revenues were up 15.7% YoY. Personal Care sales (39% of total sales) were up 10.3% YoY. Foods & Refreshments business sales (28% of total sales) were up 7.2% YoY.
Hindustan Unilever is predominantly engaged in manufacturing and distributing consumer products mainly in India. Co. operates five main business segments: Soaps and Detergents include soaps, detergent bars, detergent powders, detergent liquids, scourers, etc.; Personal Products include products in the categories of Oral Care, Skin Care (excluding soaps), Hair Care, Deodorants,Talcum Powder, Colour Cosmetics, Ayush services; Beverages include tea and coffee; Package Foods include Branded Staples (Atta, Salt, Bread, etc.), Culinary Products (tomato based products, fruit based products, soups, etc.) and Frozen desserts; Others include Exports, Chemicals, Water business, Infant Care Products.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.