Hindustan UnileverBusiness

Investing Ideas: Complete Analysis for Hindustan Unilever

Whatsapp

Headquartered in Mumbai, Hindustan Unilever (HUL) is the Indian Subsidiary of the British-Dutch MNC Unilever PTC. HUL is one of the leading MNC in the Fast Moving Consumer Goods (FMCG) sector and rightly holds a place in the NIFTY 50.

Also Read: Nifty 50: Things you didn’t know about the world’s most traded index contract

Hindustan Unilever is the market leader in Indian consumer products with a presence in over 20 consumer categories such as soaps, tea, detergents, and shampoos amongst others with over 700 million Indian consumers using its products. Here’s a complete list of the same:

1. Food:

  • Annapurna Salt and Flour (Atta)
  • Boost
  • Bru Coffee
  • Brooke Bond (Red label, Taj)
  • Horlicks
  • Kissan Jams and Squash
  • Lipton Tea
  • Kwality Walls Frozen products
  • Knorr soups
  • Magnum (Ice creams)

2. Homecare Products:

  • Wheel Detergent
  • Comfort Fabric Cleaner
  • Love and care fabric wash
  • Domex disinfectant
  • Rin detergent
  • Surf excel
  • Sunlight detergent
  • Vim Dishwashing soap
  • Magic water saver

3.Personal Care:

  • Axe deodrants
  • Brylcream hair gel
  • Clean & clear Facewash
  • Clinic Plus Shampoo
  • Close Up Toothpaste
  • Dove Soap
  • Denim Shaving products
  • Fair & lovely (Now Glow & Lovely)
  • Hamam Soap
  • Indulekha Oil
  • Lakme
  • Lifebuoy
  • Lux
  • Pears
  • Pepsodent
  • Ponds
  • Rexona
  • Sunsilk
  • TREsemme
  • Vaseline

Wow!! You never knew that Hindustan UnileverHUL has nearly a monopoly business and it is competing with none other than itself. Interesting business. Also, this portfolio of products is mostly daily use, no pandemic will stop people from using them. That’s the reason for the surge in the FMCG sector during the COVID market crash.

Now, let’s have a deep check on Hindustan Unilever fundamentals.

To begin with; we have a massive market cap of half a million crore rupees. Hindustan Unilever has a good track record of giving dividends (meaning it makes regular profits). Last year it gave a 2500% dividend on the face value of its share. That’s very positive as per my views.

Let’s check into the company’s financials:

AnnualMAR 2020MAR 2019MAR 2018MAR 2017MAR 2016
Sales39,783.0039,310.0035,545.0033,162.0032,186.00
Other Income632.00550.00384.00369.00423.00
Total Income40,415.0039,860.0035,929.0033,531.0032,609.00
Total Expenditure31,124.0031,223.0028,599.0027,017.0026,550.00
EBIT9,283.008,637.007,330.006,514.006,059.00
Interest118.0033.0026.0035.0017.00
Tax2,409.002,544.002,079.001,977.001,875.00
Net Profit6,756.006,060.005,225.004,502.004,167.00
(all fig. In Crore)

We can see in the table that Sales is increasing Year on Year (YoY) basis. Meanwhile Expenditure is also increasing but not as significant as Income and sales. Overall, the company is growing in terms of profits.

Let’s check the Shareholding Pattern:

StandaloneApril 2020March 2020December 2019September 2019
Promoters61.967.1867.1867.18
Pledged0000
FII/FPI12.0412.112.3212.4
Total DII15.039.769.439.34
Fin.Insts0.40.370.360.36
Insurance Co3.283.393.714.08
MF2.582.872.582.21
Others DIIs8.773.132.782.69
Others11.0210.9711.0711.08
Total99.99100.01100100

Red Flag. We can see that promoters (owners) have sold a large share of stocks in between March and April. But Due to global crisis we can negotiate with that. Still the owners have more than 60% stake in the company, so leadership is not an issue here.

Technical Analysis:

Hindustan Unilever

Since 2017, this stock is continuous moving Upwards and has given more than 200% return to its investors.

Hindustan Unilever

At this movement, Hindustan Unilever is at a crucial resistance level 2291. It recently broke the 2190 resistance levels and was quick to move further. We can expect HUL to break 2300 levels by the end of the week and move towards 2500 marks by the end of this month.  That’s a very short-term call, keep a healthy stop loss at 2200 considering the volatility.

For long term investors, it is suggested to buy this stock at every possible dip and hold it. Hedge the stock and invest further. We can expect this stock to give more 200- 300% return within next 3-5 years. Keep a target of 4000 levels and stay invested.

Also Read: Can Investing in Cryptocurrency in this Pandemic help you with extra income?

Disclaimer: The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. The Author is not a registered Advisor or a legal entity.

There are risks associated with investing in securities. Investing in stocks, bonds, exchange traded funds, mutual funds, and money market funds involve risk of loss.  Loss of principal is possible. Some high-risk investments may use leverage, which will accentuate gains & losses.

Foreign investing involves special risks, including greater volatility and political, economic, and currency risks and differences in accounting methods.  A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.

Leave a comment