Hindustan Unilever reported a growth of 9% (year-on-year) in its net profit for the December quarter. The profit for third quarter has come in at Rs 1,444 crore against last year’s Rs 1,326 crore.
Hindustan Unilever’s Q3 performance was largely in line with estimates, but volume growth has been commendable, analysts at multiple brokerages said in their research notes.
Jefferies, in fact, has hiked its target price on the stock from Rs 1,650 to Rs 1,770.
Hindustan Unilever (HUL) reported a growth of 9 percent (year-on-year) in its net profit for the December quarter. The profit for third quarter has come in at Rs 1,444 crore against last year’s Rs 1,326 crore.
The company posted revenue of Rs 9,558 crore during the quarter under review. It rose 11 percent compared to its previous year’s revenue of Rs 8,590 crore.
The FMCG major reported a volume growth of 10 percent, which exceeded Street expectations
Brokerage: CLSA | Rating: Maintain Outperform | Target: Rs 2,010
CLSA believes that for the company’s size, to grow volumes at 10% is commendable. Further, it observed that the commentary was positive as demand conditions were stable. Execution remains the company’s key advantage, it said. Strong execution should help the company grow earnings at 15%+ going forward.
Brokerage: Macquarie | Rating: Outperform | Target: Rs 2,059
Macquarie said that it likes the company’s focus on driving penetration, leading to volume growth. Q3FY19 adjusted PAT was broadly in-line with our estimates, analysts at the firm wrote in their report.
Consensus continues to upgrade, we are 4-7% ahead for FY18-21, they further noted.
The company remains a top pick in the sector and a high conviction marquee idea.
Brokerage: Credit Suisse | Rating: Maintain neutral | Target: Rs 1,900
Credit Suisse said that the quarter was a steady one, but growth could slow down in the future. Volume growth was healthy at 10% & revenue growth at 13%, it observed.
It’s the last quarter of YoY tailwinds from November 2017 GST rate cuts. Steep valuations & high earnings expectations leave no room for upside, it observed.
Brokerage: Morgan Stanley
The global research firm said that strong volume growth trajectory continues and the underlying operating margin as in line with estimates. Key negative was flat margin in the home care business.
Brokerage: Jefferies | Rating: Hold | Target: Raised to Rs 1,770 from Rs 1,650
Jefferies said that Q3 results came largely in-line with estimates and that lower pricing led to 12.4% YoY net sales growth. It also said that sales and margin estimates have left no room for upgrades, it added. Valuation makes risk-reward unattractive.
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