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MOSL: Morning India (19/March/18): 1. Hindustan Unilever; 2. Gujarat State Petronet; 3. EcoScope; 4. Cement; 5. Healthcare

MOrning India (19/March/18): 1. Hindustan Unilever; 2. Gujarat State Petronet; 3. EcoScope; 4. Cement; 5. Healthcare

Today’s top research idea
Hindustan Unilever: Gradual broad-based improvement in demand
Markets are seeing gradual broad based improvement in demand over the last few quarters. Central India continues to do better than the rest of the regions for the company. Rural has been doing much better but has still not reached buoyant historical levels were it was growing 1.5x-2x of urban demand. Wholesale and CSD channel which were lagging behind for many quarters are back to normalcy.
Tailwinds in terms of rural demand recovery, margin accretion due to further benefits of Zero Based Budgeting (ZBB) and medium term benefits of GST will also enable steepen earnings trajectory.
Consequently we expect 18.8% EPS growth between FY17-FY20 compared to 6.1%/10.6% and 10.7% CAGR respectively over the last 3/5/10 years.
We maintain our Buy rating with a revised target price of INR1,515.

Piping hot news
Only 16% of initial GST returns filed for July-Dec matched with final returns
With only 16 per cent of the summary sales returns under GST matching with the final returns, the revenue department has started to analyse major gaps with a view to check any possible tax evasion. According to the GST returns data, 34 per cent of businesses paid Rs 34,400 crore less tax between July-December while filing initial summary return (GSTR-3B).