Buy Hindustan Unilever; target of Rs 2268: Prabhudas Lilladher

Moneycontrol • 3 days ago

Original source

Key Investment Pillars

  • Demand remains resilient across rural and urban markets, with a focus on premiumization and emerging channels expected to drive growth and margin expansion.
  • HUL's EBITDA margin guidance of 22-24% is expected to be achieved in FY28, driven by a correction in input costs and operating leverage.
  • The company's strategy to focus on emerging channels, premium products, innovation, and profitable growth is expected to provide superior growth over the next few years.
  • HUL's valuation at 30.8x FY29 earnings and 2.5% dividend yield leaves little room for incremental de-rating.

Thesis Validation Checklist

  • Investors should watch for sustained demand growth, margin expansion, and successful execution of HUL's premiumization and emerging channels strategy over the next 12 months.
  • Key signals to monitor include volume growth, gross margin expansion, and EBITDA margin improvement, as well as the company's ability to navigate inflationary pressures and maintain its market leadership position.