Add Hindustan Unilever, target price Rs 2782: Centrum Broking

Centrum Broking has add call on Hindustan Unilever with a target price of Rs 2782. The current market price of Hindustan Unilever is Rs 2513.65.

Hindustan Unilever Ltd., incorporated in the year 1933, is a Large Cap company (having a market cap of Rs 591180.66 Crore) operating in FMCG sector.

Hindustan Unilever Ltd. key Products/Revenue Segments include Personal Care and Other Operating Revenue for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 15253.00 Crore, up 3.36 % from last quarter Total Income of Rs 14757.00 Crore and up 16.44 % from last year same quarter Total Income of Rs 13099.00 Crore. Company reported net profit after tax of Rs 2670.00 Crore in latest quarter.


Investment Rationale
The brokerage expects gradual recovery in discretionary spends and inherent distribution strength to drive GSK-CH business. Though margins could remain in tight band, given inflationary cycle and high ad-spends. Company has declared dividend of Rs17/ share, it has marginally tweaked estimates and introduced FY25E earnings. It retains ADD rating, with a revised DCF-based TP of Rs2,782 (implying 55.1x avg. FY24E/FY25E EPS). Risks to call include significant acceleration in volume/price, decrease in ad-spends leading to margin expansion & lower competitive intensity.

Promoter/FII Holdings
Promoters held 61.9 per cent stake in the company as of 30-Jun-2022, while FIIs owned 15.69 per cent, DIIs 9.79 per cent.