Buy Hindustan Unilever Ltd. For Target Rs.3,100 - Motilal Oswal Financial Services
* Demand trends remain consistent QoQ, showing muted growth with rural outperforming urban. We expect 3% revenue growth in 3QFY25.
* We model 1% volume growth, impacted by the price increase in soaps and tea. The company has taken low single-digit price hike at the portfolio level.
* HUL’s growth has been impacted by multiple factors, including adverse mix dynamics, input cost inflation, and subdued seasonal demand, collectively moderating the overall growth trajectory.
* There would be some pressure on GP margins (-80bp YoY) due to rise in palm oil and other agri commodity prices. However, EBITDA margins (+40bp YoY) expected to be stable due to cost initiatives taken by the company.
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