HUL Q3 Results Review - No Signs Of Volume Recovery; Downgrade To 'Reduce': Dolat Capital

Dolat Capital Report

Hindustan Unilever Ltd.’s core results came below our estimate. Despite 2% volume growth, revenues declined by 0.3% due to price pass on. Going ahead, volume growth would lead the value growth due to less opportunity for price hikes.

Gross margin expanded by 400 basis points YoY due to softening in commodity prices. However, 260/150 bps increase in advertising and promotion spends/other expense restricted the Ebitda margin expansion at 10 bps – came marginally below estimate.

As performance was below our estimates, we have downward revised our FY24/25/26E earnings per share estimates by 5.4/5.1/5.0% at Rs 44.1/48.8/54.5.

Valuing the stock at 49 times FY26E EPS, arrive at target price of Rs 2,668. Downgrade to 'Reduce'.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.