Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

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Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/hindustan-unilever-ltd" target="_blank" data-smartkarma-citation="entities:13828:1" rel="noopener">Hindustan Unilever (HUVR IN)</a> is focusing on protecting its business model and market share, which is the key in such an operating environment. </li>
<li>Presence across multiple price points and playing a targeted game in target geographies will aid in maintaining steady-state growth. </li>
<li>Current valuations, lack of trigger for driving exponential volume growth and expected slowing pace of premiumisation warrant caution. </li>
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Hindustan Unilever (HUVR IN) is focusing on protecting its business model and market share, which is the key in such an operating environment. 
Presence across multiple price points and playing a targeted game in target geographies will aid in maintaining steady-state growth. 
Current valuations, lack of trigger for driving exponential volume growth and expected slowing pace of premiumisation warrant caution. 


Hindustan Unilever (HUVR IN) | The Right Priorities, but Ain't Enough

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<div><div><div><div><ul><li>While4QFY22resultswereaboveexpectations, management did highlight the likely sequential margin pressures over the next 2-3 quarters.</li><li>Two factors that constrained HUVR’s earnings growth (ex-GSK) over the past two years were escalating material costs and lower-than-expected premiumization.</li><li>Nevertheless, positive factors can emerge from rural recovery fueled by: a) good Rabi crop, b) good monsoon, and c) sustained agri commodity inflation, unless offset by input cost pressures for farmers. </li></ul><ul style="list-style-type: none;"><li> </li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

While4QFY22resultswereaboveexpectations, management did highlight the likely sequential margin pressures over the next 2-3 quarters.Two factors that constrained HUVR’s earnings growth (ex-GSK) over the past two years were escalating material costs and lower-than-expected premiumization.Nevertheless, positive factors can emerge from rural recovery fueled by: a) good Rabi crop, b) good monsoon, and c) sustained agri commodity inflation, unless offset by input cost pressures for farmers.  Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hindustan Unilever - Near-Term Headwinds Temper Earnings Expectations

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

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Nirmal Bang, one of the leading stock broking companies in India, caters to retail and institutional clients by offering them a range of financial products and services, including equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS.

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<div><div><div><div><ul><li>4QFY22 headline performance: HUVR’s standalone turnover (including other operating income - OOI) grew by 11% YoY to Rs134.6bn (vs our est. of Rs129.9bn).</li></ul><div><div><div><div><ul><li>4QFY22 segmental performance: Home Care surprised us, growing at 23.7% YoY; segment EBIT margin was down 140bps YoY at 19.8%. Beauty &amp; Personal Care grew by 3.6% YoY; segment EBIT margin was down 130bps YoY at 26.2%.</li></ul><div><div><div><div><ul><li>Operating margins in line: While gross margin was lower than our expectation at 49.5% (vs est. of 51%), down ~300bps YoY at 49.5%.</li></ul></div></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

4QFY22 headline performance: HUVR’s standalone turnover (including other operating income - OOI) grew by 11% YoY to Rs134.6bn (vs our est. of Rs129.9bn).4QFY22 segmental performance: Home Care surprised us, growing at 23.7% YoY; segment EBIT margin was down 140bps YoY at 19.8%. Beauty &amp; Personal Care grew by 3.6% YoY; segment EBIT margin was down 130bps YoY at 26.2%.Operating margins in line: While gross margin was lower than our expectation at 49.5% (vs est. of 51%), down ~300bps YoY at 49.5%.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hindustan Unilever - Volumes Surprises; Expect Further Sequential Inflationary Pressure

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

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<li>Beat on volume: Revenue grew 11% YoY (35% in Q4FY21 and 10% in Q3FY22), with home care/BPC/F&amp;R growing 24/4/5% (11/2/11% three-year CAGR).</li>
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<li>In-line EBITDA margin: Gross margin contracted by 301bps YoY (-117bps in Q4FY21 and -186bps in Q3FY22) due to high commodity inflation.</li>
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<li>Call takeaways: (1) HUL continued to gain volume and value market share in more than 75% of its portfolio.</li>
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<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>





Beat on volume: Revenue grew 11% YoY (35% in Q4FY21 and 10% in Q3FY22), with home care/BPC/F&amp;R growing 24/4/5% (11/2/11% three-year CAGR).



In-line EBITDA margin: Gross margin contracted by 301bps YoY (-117bps in Q4FY21 and -186bps in Q3FY22) due to high commodity inflation.





Call takeaways: (1) HUL continued to gain volume and value market share in more than 75% of its portfolio.








Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hindustan Unilever - Home Care Saves the Day; Margin Pressure Continues

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

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An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over nearly 4 years and implemented in its current state for nearly 2 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


India

Hindustan Unilever Limited manufactures and distributes consumer products. The Company offers soap, detergent, personal care products and processed food, ice creams, cooking oils, and other related products. Hindustan Unilever serves customers worldwide.

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Hindustan Unilever (HUVR IN)