Prabhudas Lilladher recommended accumulate rating on Hindustan Unilever with a target price of Rs 2798 in its research report dated December 08, 2022.
December 09, 2022 / 02:49 PM IST
Prabhudas Lilladher’s research report on Hindustan Unilever
HUL has announced twin acquisition of OZiva & Wellbeing Nutrition which are present in the premium segment of Health & Wellness with presence in Vitamin, Minerals and Supplements space with potential market size of Rs300bn over the next 5 years. This movie is in line with HUL’s attempt to increase presence in Wellness segment post acquisition of Horlicks. We believe HUL will use its vast distribution network, technology & expertise of Unilever and its strong presence in MT/E-comm to grow the business further. HUL is currently present at the mass end in supplement and wellness space through Horlicks (GSK acquisition), these acquisitions will help grow presence in the premium segment (8x realization in OZiva vs base variant of Horlicks). Although these businesses won’t turn the needle for company with size & scale of HUL, However, the move shows HUL’s intent to grow into emerging growth segments in Health, Wellness and Nutrition.
We estimate 16.6% PAT CAGR over FY22-25 and arrive at DCF based target price of Rs2798 (unchanged). Maintain Accumulate.
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