Motilal Oswal Places Buy On Large Cap FMCG Stock, Sees Upside Potential, Trading Near 52-Week High

Motilal Oswal Financial Services maintains a Buy rating on Hindustan Unilever Ltd. (HUVR) with a Target Price of Rs. 3,100 apiece. The brokerage sees a potential upside of up to 16% from its current level, considering the given target price and the current market price of the stock. It is trading 2.46% away from its 52 week high. HUVR is a Large cap FMCG stock. It has a market capitalisation of Rs. 6,28,727 crore.

Valuation & Views

According to Motilal Oswal Financial Services, HUVR remains confident about its ability to achieve Consistent, Competitive, Profitable, and Responsible (4G) growth while maintaining double-digit EPS growth. The recent increase in royalty and central service fees has not affected its commitment to invest in business growth and its ability to deliver growth in revenue and profit.

HUVR has consistently reinforced the fundamental factors that have contributed to its success in India. They include (a) embracing technology to gather valuable data and enable informed decision-making, (b) adopting the 'Winning in Many Indias' (WiMI) strategy that emphasizes decentralization and tailored approaches, (c) identifying emerging trends and proactively investing in them, (d) reinvesting cost savings into the business, and (e) showcasing exceptional execution capabilities that have resulted in a consistent earnings growth.

The brokerage has said, "We also believe that HUVR is the best prepared among peers in terms of technology and e-commerce strategy to deal with potentially significant disruptions going forward. HUVR's performance has been even more impressive in the last 3/5 years, with an EBITDA CAGR of 12.4%/13.4% and a PAT CAGR of 14.1/13.6%."
It added, "With the expectation of a normal monsoon, a gradual recovery in rural areas, and a reduction in commodity costs, HUVR is expected to regain its mid-to-high teens earnings growth trajectory it exhibited for the four years before Covid. We maintain our BUY rating on the stock with a TP of INR3,100."

Stock Outlook

The stock last traded at Rs. 2,675.90/share, up 1.23% from its previous close of Rs. 2,643.45 apiece. The stock's 52 week high is Rs. 2,741.60 apiece and 52 week low is Rs. 2,100 apiece, respectively.

It has fallen 0.57% in 1 week. It jumped 2% in 1 month and 8.99% in 3 months, respectively. It gave 21.8% in 1 year. It gave 26.99% positive return in 3 years and 65.06% in 5 years, respectively.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.