MOSL: HINDUSTAN UNILEVER (Buy)-Purpose-led, future-fit, high multiples to remain
Hindustan Unilever: Purpose-led, future-fit, high multiples to remain
(HUVR IN, Mkt Cap USD57b, CMP INR1832, TP INR2070, 13% Upside, Buy)
We attended Hindustan Unilever's (HUVR) Annual Investor Meet 2019. Key highlights:
- 'Companies with a purpose last; brands with a purpose grow and people with purpose thrive' - Management summed up the key to its continued success.
- The decentralization of strategy to a customized level by regional teams (with guardrails provided by top management) is aiding flexibility (exemplified by the WIMI strategy), and also freeing up top management time to 'focus on longer-term goals, manage disruption, explore inorganic growth opportunities, and land bigger and faster innovation (speed-to-market up 40% in recent years).
- Management places primacy on data and analytics; it said, ‘Along with the traditional strengths of brands and people, data is now its third key strength’. Further updates were provided on the data-analytics-execution chain that was first discussed last year. Subsequent to recent improvements, this activity is not only superior to FMCG peers in India but also better than many Unilever businesses worldwide, even those in some developed markets.
Emphasis by management on recent inorganic acquisitions like Indulekha, Adityaa Ice Cream and Glaxo Consumer (and the initial success of the first two acquisitions), makes us believe that management's appetite for acquisitions as a growth medium is whetted and is likely to be a key component of growth.
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.
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