(Rating: REDUCE, TP: Rs2,539, Upside: 6.8%)
Growth performance disappoints, margin headwinds ahead; reiterate REDUCE
- View - We build in a 11%/14% revenue/PAT CAGR over FY21-24E. We roll over our valuations to FY24 and given a limited upside, reiterate our REDUCE rating on the stock with a PT of 2,539 based on 50x FY24 earnings.
- Result highlights - 9% volume growth and consumer revenue growth of 12%, margins down 110bps to 23.9% due to input inflation and higher A&P spends, adj. PAT growth of 4.4%, other income lower due to lower yields, premium portfolio grew 2x, 80% business continues to gain penetration vs FY20.
- Segmental growth - Home care growth of 12% led by fabric wash and personal care, BPC growth of 13% led by hair care and skin care, foods growth of 12% led by continued momentum in in-home portfolio; health, hygiene and nutrition portfolio (85% of business) grew 8%, discretionary portfolio (12% of business) grew 39% and OOH portfolio (3% of business) grew 91%.
Shares of HINDUSTAN UNILEVER LTD. was last trading in BSE at Rs. 2359.25 as compared to the previous close of Rs. 2378.65. The total number of shares traded during the day was 66151 in over 9949 trades.
The stock hit an intraday high of Rs. 2391.25 and intraday low of 2355.9. The net turnover during the day was Rs. 156738713.