Axis Capital has reiterated an Add rating on Hindustan Unilever Ltd. (HUL), maintaining its target price at ₹2,850, suggesting a potential upside of 14.8%. The brokerage highlights the company’s stable demand and margin outlook alongside strong growth potential across categories.
Key takeaways from Axis Capital’s report:
- Distribution reach: HUL now covers 9 million stores, including 3 million direct outlets, 35 distribution centers, and over 3,500 redistributors.
- Weighted distribution growth: Currently at 65% (versus 56% in FY22), with a target of reaching 70% by FY27.
- Portfolio strength: 19 brands with an annual turnover exceeding ₹10 billion; over 85% of the business holds category leadership.
- Long-term outlook: Focuses on double-digit EPS growth through business expansion and operational efficiency.
- Ice cream business: Management anticipates double-digit growth in the ice cream segment, citing significant premiumization opportunities due to low per capita penetration.
Axis Capital believes HUL’s strong distribution network, brand leadership, and focus on premiumization provide long-term growth visibility, making it an attractive addition to portfolios.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.