HINDUSTAN UNILEVER LIMITED

COMPANY PROFILE

Incorporated in the year 1933, Hindustan Unilever Limited (HUL) is a Fast Moving Consumer Goods (FMCG) company. Hindustan Unilever Limited (HUL) has a diversified presence in the FMCG sector with more than 35 brands spanning 20 distinct categories including soaps and detergents, shampoos, skin care, toothpastes, and packaged foods. British-Dutch company Unilever PLC and its Affiliates are the promoters of HUL and own 52.5 % shares in the Company (On 30 April 2013, Unilever PLC announced plans to increase its stake in the Company to 75 % by way of an open offer).

Over the years, Hindustan Unilever Limited (HUL) has grown substantially by acquiring landmark brands and has managed to maintain its dominant market position in various categories. Hindustan Unilever Limited (HUL) portfolio in- cludes leading household brands including Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, and Lakme.

STOCK INFORMATION

STOCK PRICE

758.95

TARGET PRICE

780-790

SECTOR

PERSONAL CARE

SYMBOL (AT NSE)

HINDUNILVR

ISIN

INE030A01027

FACE VALUE (IN RS.)

1.00

BSE CODE

500696

STOCK FUNDAMENTALS

MARKET CAP

163,945.15

BOOK VALUE

15.15

EPS - (TTM) (IN RS. CR.)

18.05

P/E

41.99

INDUSTRY P/E

40.74

INVESTMENT RATIONALE

Being the country’s largest FMCG player, Hindustan Unilever Limited (HUL) volume growth has decelerated in line with the economic downturn. Volume growth has declined from ~13% (FY11) and ~9% (FY12) to ~4% in FY14. The slowdown is largely on the back of a slowdown in urban discretionary demand with rural growth remaining healthy. Going ahead, we believe volume growth would remain muted until FY15E led by the slower revival in GDP growth and persistently high food inflation. However, we believe that as the economy revives and growth gains traction Hindustan Unilever Limited (HUL) strong portfolio of brands across segments would aide the company’s volume growth back to 6-7% annually.

Hindustan Unilever Limited (HUL) PP (~29% of revenues, ~46% of PBIT in FY14) growth at 14.8% CAGR (FY09-13) has been largely led by volumes fol- lowing lower penetration of oral, hair & skin care products in India and HUL’s strengthening presence across these seg- ments led by its strong brands, Fair & Lovely, Ponds, Lakme, Clinic Plus, Close-Up, etc.However, following the slowdown in discretionary demand, increasing competition in PP seg- ment and rejig in Hindustan Unilever Limited (HUL) largest PP brand (Fair & Lovely)

SHAREHOLDING PATTERN

HUL IMG

OUTLOOK&VALUTION

Axis Bank We expect the near term slowdown to keep Hindustan Unilever Limited (HUL) growth moderate until H1FY15. However, with a revival in urban demand and strong brands in growing aspirational segments, we believe HUL is strongly placed to capture the booming consumer demand. We value the stock at 35x FY16E EPS of 21.6 arriving at a target price of 780-790 levels.

RESULTS (Quarterly )(Rs CR.)

 

Jun 14

Mar' 14

Dec’13

Sep' 13

Jun’ 13

Sales

7,716.34

7,094.10

7,223.35

6,892.64

6,809.04

Operating profit

1,316.54

1,077.55

1,226.80

1,085.31

1,085.60

Interest

6.25

5.33

18.20

6.28

1,256.13

Gross profit

1,512.40

1,222.85

1,351.26

1,230.02

1,256.13

EPS (Rs)

4.89

4.03

4.91

4.23

4.71

TECHNICAL VIEW

Hindustan Unilever Limited (HUL) is looking strong on charts. We advise to buy around 750-760 with stoploss of 730 for the targets of 780- 790 levels. RSI is also showing upside momentum in it on weekly charts.

SYMBOL

VALUE

ACTION

RSI(14)

65.817

BUY

STOCH(9,6)

83.489

OVERBOUGHT

STOCHRSI(14)

55.221

BUY

MACD(12,26)

-9.910

SELL

ADX(14)

30.260

BUY

WILLIAMS %R

-5.977

OVERBOUGHT

CCI(14)

129.3379

BUY

ATR(14)

4.3250

LESS VOLATILITY

HIGH/LOWS(14)

3.7964

BUY

ULTIMATE OSCILLATOR

70.783

OVERBOUGHT

ROC

2.790

BUY

BULL/BEAR POWER()13

10.5760

BUY

BUY: 07 SELL:1 NEUTRAL: 3

SUMMARY : STRONG BUY

Our Other Recommendation for Next Week

SCRIP

ACTION

CMP

ENTRY

SL

TGT

TIME FRAME

TATA MOTORS

BUY

514.60

510-510

500

525-540

ONE WEEK

HDFC

BUY

1033.00

1020-1040

1000

1065-1085

ONE WEEK

BAJAJ AUTO

BUY

2539.65

2520-2540

2480

2580-2620

ONE WEEK

EXIDE IND

BUY

158.50

155-158

152

162-164

ONE WEEK

JINDAL STEEL

BUY

165.95

162-165

157

172-178

ONE WEEK

Performance of Previous Week

SCRIP

LOT

ACTION

ENTRY

SL

TGT

P&L

REMARK

CLOSE/LOW/HIGH

AXIS BANK

1250

BUY

400-405

392

412-424

0.00

NOT OPEN

424.50 / 410.70

IDEA

2000

BUY

152-154

146

158-162

0.00

NOT OPEN

160.70 / 155.65

ZEE ENT

1000

BUY

320-322

315

326-332

12000.00

BOTH TGT HIT

338.50 / 345.45

BANK BARODA

500

BUY

870-875

860

885-895

12500.00

BOTH TGT HIT

885.10 / 899.00

ORIENT BANK

2000

BUY

245-248

240

254-260

0.00

NOT OPEN

263.85 / 252.25

ICICI BANK

250

BUY

1500-1510

1480

1535-1550

0.00

NOT OPEN

1572.80 / 1525.05

NET PROFIT

 

 

 

 

 

24500.00

 

 

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DISCLAIMER

This report is only for the information of our customers. Recommendations, opinions, or suggestions are given with the understanding that readers acting on this information assume all risks involved. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. ATS and/or its group companies do not as assume any responsibility or liability resulting from the use of such information.

 

 

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