NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Hindustan Unilever Ltd.'s Q1 FY25 performance was in line with our estimates. Net sales rose 2% YoY, with 4% volume growth (estimate: 3%). Demand trends saw steady improvements with a gradual rural recovery.
The focus remains on volume-led growth through consistent new launches and aggressive spending on marketing.
Home Care segment maintained high-single-digit volume growth with 4% revenue growth. Fabric Wash remained the key growth driver. Beauty and Wellbeing segment clocked mid-single digit volume growth with 3% revenue growth. Hair Care portfolio reported double-digit volume growth.
Personal Care posted low-single digit volume growth with a 5% decline in revenue. Pricing actions in Skin Cleansing hurt growth. Food and Refreshment posted flat volume with 1% revenue growth. A severe summer affected the beverage portfolio. Nutrition drinks a saw weak performance.
Gross margin expanded by 150 basis points YoY to 52% (in line), out of which 100 bp was reinvested in advertising and promotion (up 12% YoY). Ebitda margin was flat YoY at 23.8% (in line). Ebitda margin is expected to improve moderately in the medium term. We model ~24-25% margin for FY25 and FY26.
We model volume growth acceleration in FY25, driven by own initiatives and improvement in demand trends. Revenue growth is expected to improve to high-single digits in H2 FY25, driven by growth in volume and prices. With an improving earnings trajectory, we continue to expect valuation re-rating.
We reiterate Buy rating with a target price of Rs 3,250 (60 times on Jun'26E earnings per share, close to five-year average P/E).
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.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.