According to media reports, Anglo-Dutch consumer goods company Unilever PLC has emerged as the top contender for the nutrition business of GlaxoSmithKline consisting of popular brands like Horlicks in India.
If the deal is sealed in favour of Unilever, it would further consolidate the position of its Indian subsidiary Hindustan Unilever, which is expanding its portfolio in the food & beverages segment, added report. CLICK HERE TO READ FULL REPORT
HUL is the largest FMCG company in India, operating across a host of categories in home care, personal care and foods. HUL’s continued proactive approach toward product innovation and distribution enhancement provides a more sustainable competitive edge over peers.
JP Morgan has ‘overweight’ rating on HUL as the brokerage firm believes a gradual recovery is underway as rural demand stabilises and benefits from lower GST rates (price reduction/grammage increase) start flowing through.
“Margin tailwinds remain, given mix improvement, manageable input cost inflation, judicious pricing, GST benefits, rational competitive spends and significant cost control measures,” the brokerage firm said in a report dated October 13, 2018. The stock was, however, trading above its target price of Rs 1,750.
“Rural acceleration (growing at 1.25x of urban), favorable GST rates and company’s own initiatives (new launches, distribution expansion, digital push) have been supporting HUL’s performance in the last 5 quarters. HUL registered 3x growth in the last 5 quarters i.e. 15% vs. 5% growth in FY14-17. Premiumisation, input cost softening and cost control initiatives resulted in robust EBITDA growth (2x growth in the last 5 years i.e. 22% vs. 10% in FY14-17,” analysts at HDFC Securities said Q2FY19 results review with ‘neutral’ rating on the stock.