Result Update: Hindustan Unilever Ltd - ACCUMULATE - TP Rs.1520 - Kotak

HUL has reported strong 3QFY18 results. Although profits are broadly in line with estimates, volume growth (+11% y/y, on a weak base), and comparable sales growth (+17% y/y) provide strong indications that demand is recovering, and HUL is able to register benefits. Further, we note that the company's 24% y/y growth in EBITDA has come in despite aggressive expansion in advertising spends, indicating higher quality of earnings (greater sustainability). As we roll forward our valuation to FY20, we believe that the market is likely to be generous with HUL valuations, and we accordingly value the stock at 43X FY20E PER. We raise our price target to Rs 1520, and raise our recommendation to ACCUMULATE (REDUCE earlier).

Shares of HINDUSTAN UNILEVER LTD. was last trading in BSE at Rs.1370 as compared to the previous close of Rs. 1366. The total number of shares traded during the day was 36157 in over 972 trades.

The stock hit an intraday high of Rs. 1376 and intraday low of 1356.1. The net turnover during the day was Rs. 49429902.

Source : Equity Bulls

Keywords