MAKING
SUSTAINABLE
LIVING
COMMONPLACE
CFA RESEARCH
CHALLENGE
Equity Research Report : HUL
Team:
Paresh Nagore
Abhishek Dubey
Mayukh Mukhopadhyay
Prasad Saindane
Sameer Kumar
TARGET PRICE
CURRENT MARKET PRICE 23%
₹ 1848
CMP
(As on September 4th, 2019)
₹ 1419.9
Stock Recommendation
SELL
Hindustan Unilever Ltd.
Contents
Macroeconomic Outlook
FMCG Industry Analysis
Overview of HUL
Valuation & Recommendations
Strategy & Financial Analysis
Risks
01
02
03
04
05
06
Macroeconomic Outlook
01
FMCG is fourth largest
sector in Indian economy
GST led to reduction in
taxes on products like
hair oil & soaps reduced
from 22–24%to 18%
6.4
7.4 88.2
7.2 6.8 7.1
0
1
2
3
4
5
6
7
8
9
13-14 14-15 15-16 16-17 17-18 18-19 19-20
Percentage
Financial Year
GDP Growth Rate
Indian Economy is growing at a
healthy rate of 6.8% & is expected
to grow at nearly same rates
FMCG industry size of ~$ 82 bn &is
expected to grow at 12–13% CAGR
Macroeconomic Outlook
Source: IBEF, ADB, ET
HIGHER INVESTMENTS
➢Expansion into new geographies.
➢Capacity expansions & increase in number
of M&As
POLICY SUPPORT
➢Approval of 100% foreign equity in single
brand retail & 51% in multi-brand retail.
➢Food security bill & direct cash subsidies
ATTRACTIVE OPPORTUNITIES
➢Low penetration in rural markets & increase in disposable
income
➢Increasing penetration of FMCG in eCommerce.
GROWING DEMAND
➢Rising income & youth population,
increased brand consciousness.
➢Rural India witnessing increased demand
driven by increased distribution network of
FMCG companies.
1 2 34
1
2
4
3
Advantage India
Source: IBEF
Macroeconomic Outlook
01
