12 June 2019
Hindustan Unilever
BSE SENSEX
39,757
S&P CNX
11,906
Annual Report
Update
| Sector: Consumer
CMP: INR1,845
More of the same
TP: INR2,070 (+12%)
Buy
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Adaptation to and recognition of key trends keeping it ahead in the game
Enthused with the interesting business perspectives provided by Hindustan
Unilever (HUVR) in its
analyst meet
last week, we now take a close look at its
FY19 annual report to get a comprehensive record of its efforts to stay ahead of
peers in terms of technology, nimbleness and sustainability.
‘Detergents’ maintains the shine
With a contribution of 44%/47%/38% of incremental sales in FY17/18/19,
Detergents continues playing a key role in driving HUVR’s overall growth (based on
Form No. MGT-9 in the annual report). However, we highlight that it is crucial to
keep a close eye on competitive actions (especially from P&G) in this segment
(more details in our
report
published in Feb’19). Separately, Soaps performance
has been tepid over the past four years, although some bounce back was seen in
FY19. Its third largest segment Cosmetics & Toiletries (C&T) has again started
contributing significantly to overall sales in FY19 after a muted show in the
HUVR IN
preceding two years.
2,165
3993.4 / 57.6
1871 / 1478
1/-11/1
2718
32.8
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
Increasing confidence on inorganic growth
HUVR’s annual report enumerates the success that it has witnessed in the
acquisitions of
Indulekha, Adityaa
Ice-cream and GSKCH and also the ambitious
plans it has charted to take these businesses to the next level. Moreover, we take
cognizance of the company’s access to impressive cash flows, ability to leverage on
its best-of-breed distribution reach, unmatched understanding of usage of lower
unit packs and new-found nimbleness in all aspects of decision making. All this
reaffirms our conviction that inorganic growth will continue to be a key part of the
company’s incremental growth.
Financials Snapshot (INR b)
Y/E Mar
2019 2020E 2021E
Net Sales
382.2 429.0 488.7
EBITDA
86.4
99.3 117.6
Net Profit
62.6
71.6
85.4
EPS
28.9
33.1
39.4
EPS gr. (%)
18.2
14.4
19.2
BV/Sh. (INR)
35.4
36.7
37.7
P/E (x)
63.8
55.8
46.8
P/BV (x)
52.1
50.3
48.9
RoE (%)
85.0
91.8 106.1
RoCE (%)
119.1 130.6 150.8
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-19 Dec-18 Mar-18
67.2
7.0
11.8
14.0
67.2
7.4
12.0
13.4
67.2
6.9
12.6
13.4
Valuation view
We believe that HUVR is likely to continue outperforming smaller players on the
volumes front. We note of the emergence of four key trends that have the
potential to drive an elevated earnings growth trajectory: (1) rapidly improving
adaptability to market requirements, (2) recognition and strong execution on
Naturals and other evolving categories, (3) continuous strong premiumization
trend and (4) extensive use of technology, creating further entry barriers. Notably,
if we incorporate the GSKCH merger (no clarity on the date yet) in our estimates,
then it will result in 8-9% addition to EPS in FY21, which means that the stock is
trading closer to 43x FY21E EPS (v/s over 46x as it appears currently). In our view,
this valuation premium should sustain, given the company’s best earnings growth
visibility in the large-cap Indian consumer space and by far the highest return
ratios. On a target multiple of 50x Jun'21E EPS, we maintain our Buy rating and
target price of INR2,070.
FII Includes depository receipts
Krishnan Sambamoorthy – Research Analyst
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 6129 1545
Vishal Punmiya – Research Analyst
(Vishal.Punmiya@MotilalOswal.com); +91 22 6129 1547
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Hindustan Unilever
Highlights from the Annual Report
More nimbleness, seeking continuous improvement
Transformation programs such as ‘Winning In Many Indias’ (WiMi) and
Connected 4 Growth (C4G) are helping in faster decision making,
localized/swifter innovation delivery, and increased speed to market.
The focus is on driving quality, customer service and cost effectiveness across
the value chain. In FY19, HUVR’s on-shelf-quality improved by 30% over the
previous year, enhancing customer experience.
Continuing its journey of segmentation, HUVR delivered Customer-Case-Filled-
on-Time (CCFOT) upwards of 95%. The key thrust in customer service is on
ensuring continued availability of products at the retailer level with shorter lead
times, improving on-shelf-availability.
M&A – a key growth area going forward?
Adityaa Ice Cream:
In FY19, HUVR entered into an agreement with Vijaykant
Dairy and Food Products Limited (VDFPL) and its group companies to acquire the
latter’s ice cream and frozen desserts business consisting of its flagship brand
‘Adityaa Milk’ and front-end distribution network across geographies. The
acquisition was in line with the company’s strategic intent to strengthen its
position in the rapidly growing ice cream and frozen desserts market in India.
Glaxo Consumer:
During the year, the company’s board approved a scheme of
amalgamation between itself and GlaxoSmithKline Consumer Healthcare
Limited (GSKCH India) to acquire the business of GSKCH India, subject to
obtaining requisite approvals from statutory authorities and shareholders. The
proposed transaction is an all-equity merger, under which 4.39 shares of the
company will be allotted for every share of GSKCH India once the scheme
becomes effective.
We note that the company has access to impressive cash flows, ability to
leverage on its best-of-breed distribution reach, unmatched understanding of
usage of lower unit packs and new-found nimbleness in all aspects of decision
making. Moreover, in the analyst meet last week, the company appeared
particularly pleased with the performance of its recent acquisitions and had
ambitious plans for those. This leads us to believe that, unlike the past,
inorganic growth will be an important component of top-line growth for HUVR.
Key highlights from Form No MGT-9
In this segment of the annual report, companies share data on sales of key
categories beyond the usual broad segmental details. Following are our
observations on HUVR’s top three categories – Soaps, Detergents and Cosmetics
& Toiletries.
Soaps:
The contribution of this sub-segment to the company’s total
revenues has come down steadily from 32% of sales in FY15 to 28.4% of
sales in FY19. We attribute this to single-digit sales growth in this category
over these years (although FY19 was still better with 8.8% sales growth).
High penetration and less premiumization relative to Detergents has been
the problem for this segment. Despite being such a large category, its
2
12 June 2019

Hindustan Unilever
contribution to the company’s incremental turnover has been less at only 8-
10% over the past two years.
Exhibit 1: Over the past four years share of soaps to HUVR’s total revenues has been steadily coming down
Y/E March
Soaps sales (INR m)
Contribution of soaps to total HUL sales (%)
Soaps sales growth (%)
Incremental soaps sales (INR m)
Contribution of soaps to HUL's incremental sales (%)
FY15
96,516
32.0
FY16
95,553
30.4
(1.0)
(963)
(7.5)
FY17
1,03,278
30.5
8.1
7,725
31.6
FY18
1,03,857
30.0
0.6
579
8.0
FY19
1,06,954
28.4
3.0
3,097
10.2
Source: Company, MOFSL
Detergents:
This category has delivered a stellar performance despite its
huge size. Not only was sales growth in the segment extremely strong at
17.1% in FY19, but also its contribution to incremental sales growth was
significant (37.6% in FY19, 47.4% in FY18 and 44.1% in FY17). Key factors
contributing to Detergents sales growth have been discussed later in the
report. Nevertheless, because it is such an important part of incremental
sales in recent years, we need to keep a close eye on the competition front,
especially from P&G.
Exhibit 2: Detergents has been the stellar performer despite its huge size
Y/E March
Detergent sales (INR m)
Contribution of detergent to total HUL sales (%)
Detergent sales growth (%)
Incremental detergent sales (INR m)
Contribution of detergent to HUL's incremental sales (%)
FY15
49,872
16.5
FY16
52,683
16.8
5.6
2,811
21.9
FY17
63,451
18.7
20.4
10,768
44.1
FY18
66,884
19.3
5.4
3,432
47.4
FY19
78,333
20.8
17.1
11,449
37.6
Source: Company, MOFSL
Cosmetics & Toiletries:
After a couple of tepid years, sales growth in this
category bounced back into double digits in FY19. As a result, C&T
contributed a strong 23.5% of HUVR’s incremental sales in the year.
Exhibit 3: After a couple of tepid years, sales growth in C&T has bounced back
Y/E March
Cosmetics & Toiletries sales (INR m)
Contribution of Cosmetics & Toiletries to total HUL sales (%)
Cosmetics & Toiletries sales growth (%)
Incremental Cosmetics & Toiletries sales (INR m)
Contribution of Cosmetics & Toiletries to HUL's incremental sales (%)
FY15
49,601
16.4
FY16
53,595
17.0
8.1
3,995
31.2
FY17
55,588
16.4
3.7
1,992
8.2
FY18
56,117
16.2
1.0
530
7.3
FY19
63,269
16.8
12.7
7,151
23.5
Source: Company, MOFSL
12 June 2019
3

Hindustan Unilever
Additional highlights in key segments
A. Beauty & Personal Care:
In Beauty & Personal Care, growth in FY19 was driven by
a) Focus on strengthening core brands,
b) Accelerating premiumization of the portfolio,
c) Entry into new segments and
d) Scaling up naturals play.
Exhibit 4: Beauty & Personal care performance
Particulars (INR m)
Beauty & Personal Care revenue
YoY growth (%)
Contribution to total turnover (%)
Beauty & Personal Care EBIT
YoY growth (%)
Margins (%)
Beauty & Personal Care contribution to total EBIT (%)
FY16
1,60,110
77.8
47.9
38,020
56.8
23.7
67.2
FY17
1,63,040
1.8
47.3
38,480
1.2
23.6
64.9
FY18
1,64,640
1.0
46.8
42,070
9.3
25.6
61.1
FY19
1,76,550
7.2
46.2
47,270
12.4
26.8
58.3
Source: Company, MOFSL
1) Skin Care
Growth accelerated across segments, including face care, face cleansing and
hand & body.
Core portfolio growth was driven by good momentum in
Fair & Lovely,
and
strong growth in
Pond’s
and the premium part of the portfolio.
All value packs launched under the moisturizer range in
Pond’s,
Vaseline/Vaseline
Petroleum Jelly,
Lakmé
Aloe range and
Lakmé
Lip Love did
well during the year.
The talc business grew strongly with the launch of
Pond’s
Starlight Talc variant.
The facial cleansing business too witnessed robust growth.
2) Skin Cleansing
A good performance was seen in:
Premium part of the portfolio –
Dove, Pears
and
Hamam.
Freshness variants within
Lifebuoy, Lux
and
Liril.
3) Haircare
The segment sustained its strong growth momentum, led by:
New launches and activations throughout the year.
The performance was further boosted by robust growth in
TRESemmé, Dove
and
Indulekha. TRESemmé,
on its fifth anniversary in India, was relaunched with new
packaging and a more fragrant formulation.
During the year,
Dove
became India’s No.1 hair care brand. Dove shampoo and
conditioner range was relaunched.
Indulekha
entered the shampoo category and led the charge in the naturals
segment in Haircare.
Brylcreem
launched an exclusive range of men’s grooming products for hair and
beard – a first for the company (a range co-created with Amazon).
12 June 2019
4

Hindustan Unilever
4) Oral care
The performance was moderate, but the business finally gathered some momentum
after a few years.
CloseUp
and
Pepsodent
were relaunched with refreshed proposition and
communication.
With the launch of
LEVER Ayush
and natural variants in
CloseUp,
HUVR has an
offering in the naturals segment which has emerged as strong part of the oral
care category in recent years.
5) Deodorants
The segment performed well led by:
Innovations and market development.
Axe Ticket
– a pocket-sized perfume pack.
Rexona,
HUVR’s leading anti-perspirant brand, delivered great results in select
geographies; it has now been rolled out nationally.
6) Overall Naturals portfolio in Beauty and Personal care was strengthened with
its three-pronged approach:
The master brand
LEVER ayush
– launched across multiple categories like oral
care, haircare, skin care and skin cleansing – continued performing well in south
India.
The second leg of the strategy is building specialist brands like
Indulekha.
This
brand has delivered an impressive performance in both oil and shampoos with
unique product formulation and distinctive packaging.
The third leg of the ‘naturals’ strategy involves supporting various natural
variants within its existing portfolio of products like
Lakmé
aloe vera range,
Lifebouy
neem and turmeric,
Fair & Lovely
Ayurveda, etc.
Exhibit 5: Strategy for Natural across portfolio
Source: Company, MOFSL
12 June 2019
5

Hindustan Unilever
B. Home Care business
The Home Care business continued its strong volume-driven profitable growth
during the year.
Exhibit 6: Home care performance
Particulars (INR m)
Home care revenue
YoY growth (%)
Contribution to total turnover (%)
Home care EBIT
YoY growth (%)
Margins (%)
Home care contribution to total EBIT (%)
FY16
1,08,130
(27.3)
32.3
10,530
(48.2)
9.7
18.6
FY17
1,13,460
4.9
32.9
12,590
19.6
11.1
21.2
FY18
1,16,290
2.5
33.0
17,020
35.2
14.6
24.7
FY19
1,28,760
10.7
33.7
21,560
26.7
16.7
26.6
Source: Company, MOFSL
1) Fabric Wash
The performance was exceptional, driven by:
Continuing premiumization with
Surf excel
and
Rin;
revival in the mass segment
led by Wheel.
Introduction of flexible packs in detergent liquids and fabric conditioners to
make them more affordable for consumers and further drive
consumption/penetration.
Sustained growth in
Surf excel
matic liquid and Comfort fabric conditioner in the
market development segments of machines and fabric conditioning.
2) In Household Care,
Vim
led the market development for dishwash by (a) driving category adoption
of
Vim
bar in rural India and (b) upgrading existing bar consumers to the liquid
format in urban India.
Vim
liquid performed well by increasing penetration through introduction of
access packs.
Domex
Toilet cleaner was relaunched with a long-lasting freshness proposition
and new user friendly packaging.
Low-cost
Domex
powder, designed for squat toilets, was extended to selected
geographies in India.
C. Foods & Refreshment business
During the year, the company integrated Foods and Refreshments categories
with an objective of making the business simpler, more focused and agile. The
Foods & Refreshment division delivered strong growth across categories.
a) In Foods, HUVR continued to grow steadily in the core portfolio of Jams and
Ketchups while investing in market development to drive penetration in
nascent categories.
b) In Refreshment, the company delivered strong and broad-based volume-led
growth across Tea, Coffee, Ice Creams and Frozen Desserts backed by
successful innovations.
c) It acquired
Adityaa
Milk to expand its ice creams business. This acquisition
will also enable them to pilot low-cost business models and enhance its ice
cream supply chain and ‘go to market’ capabilities.
6
12 June 2019

Hindustan Unilever
d) Proposed merger of GlaxoSmithKline Consumer Healthcare (GSK CH) into
HUVR, subject to obtaining requisite approvals, is in line with the company’s
ambition to build one of the largest Foods & Refreshment businesses in the
country. Management believes that the amalgamation of the two
companies (with combined knowledge and strong portfolio) will provide
them with a competitive edge.
Exhibit 7: Food & Refreshments performance
Particulars (INR m)
Foods & Refreshment revenue
YoY growth (%)
Contribution to total turnover (%)
Foods & Refreshment EBIT
YoY growth (%)
Margins (%)
Foods & Refreshment contribution to total EBIT (%)
FY16
55,780
1.0
16.7
7,900
13.2
14.2
14.0
FY17
59,720
7.1
17.3
8,400
6.3
14.1
14.2
FY18
64,870
8.6
18.4
9,880
17.6
15.2
14.4
FY19
71,330
10.0
18.7
12,300
24.5
17.2
15.2
Source: Company, MOFSL
Brand and sub-segment details
During the year, Kissan launched a range of international sauces – Schezwan,
Manchurian, Pizza Pasta and Mexican Salsa.
The Refreshment business, comprising brands like
Taj Mahal, Brooke Bond Red
Label, Lipton, BRU
and
Kwality Wall’s,
continued driving reach by increasing
direct distribution and leveraging its WiMi strategy.
Tea continued delivering robust, volume-led growth, as all the key brands –
Brooke Bond Red Label, 3 Roses, Taaza
and
Taj Mahal
– continued growing and
delighting consumers as superior products at the right price. The relaunched
Brooke Bond Taj Mahal
continued to strengthen its franchise.
Taaza
continued
to upgrade consumers along the quality pyramid by offering superior value.
Brooke Bond Red Label
and
3 Roses
Natural Care Tea, with its differentiated
immunity benefit from ayurvedic ingredients, continued to delight consumers.
During the year, HUVR launched a new variant of
BRU
Coffee in select
geographies. Notably the company did not mention strong or double-digit
growth in coffee unlike tea and ice creams.
During the year, the Ice Cream and Frozen Desserts business delivered strong,
volume-led growth on the back of innovations and geography expansion. HUVR
rolled out globally successful innovations –
UniCornetto,
Sandwich and
Magnum
Hazelnut – as well as local innovations – Cloud Bite with twin flavors and access
packs in Choco Cone, Orange Bar and Rajwadi Bite. HUVR also launched several
co-branded innovations –
Cornetto
Oreo,
Gems
Cup and
Oreo
Tubs.
12 June 2019
7

Hindustan Unilever
Exhibit 8: Exciting range of innovations launched for season
Source: Company, MOFSL
Sharpening its technological edge
The company is embedding technology across its processes to build a business
that is future-fit.
It is constantly innovating across the portfolio to meet evolving consumer
needs.
HUVR believes that it is well placed to capture the opportunities from
technological revolution and explosion of data. As part of the ‘Re-imagining’ HUL
agenda, an organization-wide digital transformation program has been
accelerated. Newer digital and data expert roles have been introduced and
embedded in the business. Several digital experiments have now been scaled up
across its business, transforming both how the company services its consumers
and customers, and how they run their internal operations.
Management believes that a connected organization can reap the benefits of an
ecosystem made up of connected consumers and continues to invest
significantly in this area.
Vernacular, Video and Voice are now critical for winning in the market and the
company is stepping up its content strategy around these areas.
The company is pre-empting the imminent disruption through a holistic
intervention across its value chain by experimenting with different technologies
that will change the way it works in future. Collectively, these initiatives will give
the company a competitive edge. Some examples of these interventions include:
a) ‘Live
Wire’
– provides the company with granular data analysis and also
democratizes enterprise data across cross-functional teams to drive faster
and more responsive decision making.
12 June 2019
8

Hindustan Unilever
b) ‘People
Data Centre (PDC)’
– enables real time listening that involves using
data to unearth underlying currents that shape the changing consumer
behavior and deciphering the impact of these trends on HUVR’s brands.
These investments in digital in all aspects of the business are helping HUVR in its
journey from mass marketing to mass customization
The company is also focusing on building the e-commerce channel that is
growing fast and driving profitability for the business.
The company is well placed to deliver long-term value through its strategy and
the Unilever Sustainable Living Plan (USLP).
Sustainability
Exhibit 9: Improving health and well-being
By 2020, Unilever will help more than a billion people take action to improve their health and well-being.
Health and hygiene
Target
By 2020, Unilever will help more than a billion people
globally to improve their health and hygiene. This will
help reduce the incidence of life-threatening diseases
like diarrhea.
In India, over 150 million people were reached by
December 2018 through programs on hand washing,
safe drinking water and sanitation.
Nutrition
By 2020, Unilever will double the proportion of its
portfolio across the globe that meets the highest
nutritional standards, based on globally recognized
dietary guidelines. This will help hundreds of millions of
people achieve a healthier diet.
46% of HUL’s Foods and Refreshment portfolio met the
highest nutritional standards in 2018, based on globally
recognized dietary guidelines.
Source: Company, MOFSL
Performance
Exhibit 10: Enhancing livelihoods
By 2020, Unilever will enhance the livelihoods of millions of people as it grows its business
Target
Fairness in the workplace
Opportunities for women
Inclusive business
By 2020, Unilever will advance
By 2020, Unilever will empower five
By 2020, Unilever will enhance the
human rights across global
million women.
livelihoods of millions of people.
operations and extended supply
chain.
HUL continued to embed human
HUL’s Shakti program has empowered
HUL has positively impacted over 2.9
rights with a focus on eight salient
1,09,100 Shakti Entrepreneurs as of
million people through Project
Prabhat initiatives across 30 locations.
human rights issues identified by
March 2019.
Unilever globally.
These initiatives focus on enhancing
livelihoods, water conservation,
health and hygiene.
Source: Company, MOFSL
Performance
Exhibit 11:
Reducing environmental impact
By 2030, Unilever’s goal is to halve the environmental footprint of the making and use of its products as it grows its business.
Target
Greenhouse gases
Halve the greenhouse gas
impact of Unilever’s
products across the
lifecycle by 2030.
CO₂ emissions (kg / tonne
of production) in HUL’s
manufacturing operations
reduced by 59% compared
to 2008 baseline.
Water
By 2020, water abstraction
by Unilever’s global
factory network will be at
or below 2008 baseline
despite significantly higher
volumes.
Water consumption ( n m3
/ tonne of production) in
HUL’s manufacturing
operations reduced by
55% compared to 2008
baseline.
Waste
By 2020, total waste sent
for disposal globally, will
be at or below 2008
baseline despite
significantly higher
volumes.
Total waste ge erated (kg /
tonne of production) from
HUL’s factories reduced by
58% over 2008 baseline.
Sustainable sourcing
By 2020, Unilever will
source 100% of its
agricultural raw materials
sustainably.
In India, a total of 65% of
tea sourced for Unilever’s
brands is from sustainable
sources. 100% of
tomatoes used in Kissan
ketchup were sourced
sustainably.
Source: Company, MOFSL
Performance
12 June 2019
9

Hindustan Unilever
During the year, the company took significant steps to further reduce waste,
water consumption, energy usage and CO2 emissions in its factories and offices.
Renewable Energy:
HUVR increased the renewable energy share in its
manufacturing to 43%. This was achieved by converting agricultural process
waste from its operations into fuel, besides increasing the utilization of bio-fuels
like agri-waste.
Energy savings:
HUVR continues expanding installation of specialized burners to
utilize heavy vegetable oil residue from operations as fuel, substituting furnace
oil.
Carbon dioxide reduction:
This increase in renewable energy usage and the
reduction in specific energy consumption have also contributed to CO
2
reduction
in HUVR’s operations per ton by 59% compared to the 2008 baseline.
Plastic Waste:
During the year, HUVR, along with its partner, has been able to
process approximately 15,000 tonnes of plastic waste and convert it into
electricity. In addition to this, approximately 5,000 tonnes of post-consumer use
plastic waste was collected with the help of NGOs and disposed safely.
Non-hazardous waste to landfills:
All factories and warehouses continue to
maintain ‘zero non-hazardous waste to landfill sites’ status.
Reuse of waste generated:
HUVR’s focus on maximizing reuse of waste
generated in the manufacturing units, reduction at source, waste segregation
and pre-processing facilities provided at all locations for improving recyclability
has resulted in total waste reduction by 58% compared to the 2008 baseline.
Plastic waste management:
HUVR has made clear commitments to make 100%
of its plastic packaging reusable, recyclable or compostable by 2025. Further,
25% of all the plastic the company uses is expected to come from recycled
sources by 2025.
Water conservation:
To address the challenges of depleting water resources,
Hindustan Unilever Foundation, along with its partners, has created cumulative
water conservation potential of over 700 billion liters. Till FY19, HUF’s water
conservation capacity stood at 900 billion liters cumulatively. To put things in
perspective on the importance of the water potential created by HUF, one
billion liters of water can meet the drinking water needs of over 800,000 adults
for an entire year.
Reduction in water usage:
Captive rainwater harvesting and its utilization in
processes, reuse of treated effluent water, reduction of water losses in utilities
and operations, process water requirement optimizations, improving
efficiencies and maximizing use of RO plants have contributed to reduction of
water usage (cubic meter per tonne of production) in manufacturing by 55%
compared to the 2008 baseline.
Sustainable sourcing:
HUVR has a clear roadmap to achieve the bold
commitment to source 100% of agricultural raw materials sustainably by 2020.
In 2018, 100% of tomatoes used in
Kissan
ketchup continued to be sourced
sustainably. In 2018, over 65% of tea in India procured for Unilever brands was
sourced from sustainable sources.
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Hindustan Unilever
Exhibit 12: HUVR’s delivery on its sustainability plan
Particulars
Reduction in CO2 emissions (kg/tonne of production) in our manufacturing operations compared to 2008 baseline
Reduction in water consumption (m3/tonne of production) in our manufacturing ops. compared to 2008 baseline
Reduction in total waste (kg/tonne of production) generated from factories compared to 2008 baseline
Better livelihoods - Shakti entrepreneurs empowered (in m)*
Sustainable sourcing - Tea sourced from sustainable sources for Unilever brands
Health and well-being - People reached through our Water, Sanitation and Hygiene (wash) initiatives
2017
54%
55%
54%
0.08
52%
>140m
2018
59%
55%
58%
0.11
65%
>150m
Source: Company, MOFSL
Remarkable capability building programs
HUL continues its title of ‘No. 1 Employer of Choice’ in the industry for the past
10 years. The ‘Unilever Diaries’ social media presence on Facebook and
Instagram has over 0.5m followers and helps HUVR deepen its engagement
with students, as well strengthens its brand image amongst them.
Apart from physical and mental health, HUVR focuses on continuous learning
and building organizational capabilities of its people:
a)
Sparkle:
It is a technology tool designed for capability management of shop-
floor Blue collar employees.
b)
Unilever Future Leaders Programme (UFLP):
Enables to identify talent early
and invests to build capability through this flagship programme.
c)
70:20:10 Capability Building:
HUVR follows the 70:20:10 capability building
approach with 70% capability built on the job through live assignments, 20%
through coaching, short-term projects and exposures and 10% through
classroom, virtual and e-learning.
d)
People Planning Processes:
Leaders at each level review and assess talent
on both, the ‘What’ and the ‘How’ of performance through an objective
process. Capability building and career plans for talent form an integral part
of this process.
e)
Growth through Diversity of Experience:
Job rotation and diversity of
experiences are integrated at all stages of the individual’s career.
f)
Gender Balance:
In 2018, women comprised more than 40% of HUVR’s
managers. The progress continues on account of enablers such as focusing
on hiring top women talent through both UFLP and mid-career recruits,
providing career development and mentorship opportunities, agile working
and parental support arrangements, etc.
g)
Fair Labor Practices:
HUVR drives fairness in the workplace by advancing
human rights across its operations and extended supply chain. Since 2015, it
has maintained a record of near-zero loss of man-days due to industrial
unrest. HUVR currently has 5,645 employees (excluding workmen). Also,
over 5,000 employees are employed on contractual/temporary basis as on
31
st
Mar’19.
12 June 2019
11

Hindustan Unilever
Project Shakti update
Project Shakti is HUVR’s initiative which aims to financially empower and
provide livelihood opportunities to women in rural India. The Shakti
Entrepreneurs are given training for familiarization with HUVR’s products and
basic tenets of distribution management.
HUVR has a team of Rural Sales Promoters (RSPs) who coach and help Shakti
Entrepreneurs in managing their business. Across 18 States, Project Shakti has
109,100 Shakti Entrepreneurs who are called ‘Shakti Ammas’.
This program has helped Shakti Entrepreneurs gain selling skills, become self-
confident, improve their self-esteem, learn negotiating and communication
skills. Most importantly, HUVR’s interventions have helped in building and
fostering entrepreneurial mindset amongst Shakti Entrepreneurs.
12 June 2019
12

Hindustan Unilever
Key tables and charts
Exhibit 13: Gross salary of Mr. Sanjiv Mehta slightly down in FY19
Particulars of Remuneration (INR m)
Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary under Section 17(3) Income-Tax Act, 1961
Stock Option
Sweat Equity
Commission
Others (Contribution to PF, Superannuation and Consultancy fees)
Total
Remuneration as % of staff cost
Remuneration as % of EBITDA
Remuneration as % of PAT
64
10
29
34
0
0
3
139
0.9
0.2
0.3
75
10
23
31
0
0
3
142
0.9
0.2
0.3
70
10
56
54
0
0
4
194
1.1
0.3
0.4
88
11
27
58
0
0
4
189
1.1
0.2
0.3
Sanjiv Mehta (Chairman and MD)
FY16
FY17
FY18
FY19
Source: Company, MOFSL
Exhibit 14: Total remuneration of CFO stood at INR49m
Particulars of Remuneration (INR m)
Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary under Section 17(3) Income-Tax Act, 1961
Stock Option
Sweat Equity
Commission
Others (Contribution to PF, Superannuation and Consultancy fees)
Total
Remuneration as % of staff cost
Remuneration as % of EBITDA
Remuneration as % of PAT
*incl. remuneration paid to Mr. P. B. Balaji
# remuneration paid to Mr. P. B. Balaji
47
2
13
5
0
0
2
68
0.4
0.1
0.2
61
0
9
9
0
0
4
83
0.5
0.1
0.2
37
0
2
0
0
0
3
42
0.2
0.1
0.1
22
0
19
4
0
0
4
49
0.3
0.1
0.1
Srinivas Phatak/ P. B. Balaji (ED, Finance and IT & CFO)
FY16
FY17#
FY18*
FY19
Source: Company, MOFSL
12 June 2019
13

Hindustan Unilever
Exhibit 15: Total remuneration of Mr. Pradeep Banerjee grew by 6.8% in FY19
Particulars of Remuneration (INR m)
Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary under Section 17(3) Income-Tax Act, 1961
Stock Option
Sweat Equity
Commission
Others (Contribution to PF, Superannuation and Consultancy fees)
Total
Remuneration as % of Staff Cost
Remuneration as % of EBITDA
Remuneration as % of PAT
22
2
7
12
0
0
2
45
0.3
0.1
0.1
19
0
8
17
0
0
4
48
0.3
0.1
0.1
20
0
20
10
0
0
4
55
0.3
0.1
0.1
24
0
3
17
0
0
15
59
0.3
0.1
0.1
Pradeep Banerjee (ED,Supply Chain)
FY16
FY17
FY18
FY19
Source: Company, MOFSL
Exhibit 16: Total remuneration of Mr. Dev Bajpai grew by 12.3% in FY19
Particulars of Remuneration (INR m)
Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary under Section 17(3) Income-Tax Act, 1961
Stock Option
Sweat Equity
Commission
Others (Contribution to PF, Superannuation and Consultancy fees)
Total
Remuneration as % of staff cost
Remuneration as % of EBITDA
Remuneration as % of PAT
18
0
8
18
0
0
3
47
0.3
0.1
0.1
21
0
15
21
0
0
4
60
0.3
0.1
0.1
22
0
16
25
0
0
4
68
0.4
0.1
0.1
Dev Bajpai (ED, Legal and Corporate Affairs & CS)
FY17
FY18
FY19
Source: Company, MOFSL
12 June 2019
14

Hindustan Unilever
Exhibit 17: Economic value add continues to be healthy
Particulars (INR m)
FY10
A. Cost of Capital Employed (COCE)
Average Debt
Average Equity
Average Capital Employed
Cost of Debt. Post tax %
Cost of Equity %
WACC %
COCE
B. Economic Value Added (EVA)
PAT (bei)
Add: Interest after taxes
Net Operating Profits After Taxes
(NOPAT)
COCE, as per above
EVA
21,030
50
21,080
3,171
17,909
21,530
-
21,530
4,031
17,499
25,990
10
26,000
3,497
22,503
33,140
170
33,310
4,046
29,264
35,550
240
35,790
4,317
31,473
38,430
110
38,540
4,740
33,800
41,160
-
41,160
6,785
34,375
42,470
-
42,470
7,493
34,977
51,350
-
51,350
8,771
42,579
60,800
-
60,800
7,894
52,906
1,190
24,970
26,160
4.0
12.5
12.1
3,171
20
31,180
31,200
5.4
12.9
12.9
4,031
-
34,620
34,620
6.2
10.1
10.1
3,497
-
40,180
40,180
6.0
10.1
10.1
4,046
-
37,150
37,150
6.4
11.6
11.6
4,317
-
43,380
43,380
5.6
10.9
10.9
4,740
-
56,640
56,640
5.4
12.0
12.0
6,785
-
58,310
58,310
4.9
12.9
12.9
7,493
-
61,810
61,810
5.2
14.2
14.2
8,771
-
66,670
66,670
5.8
11.8
11.8
7,894
FY11
I-GAAP
FY12
FY13
FY14
FY15
FY16
IND AS
FY17
FY18
FY19
Source: Company, MOFSL
Exhibit 18: CSR spend targets for the year were met
Details of CSR spend
Average Net Profit of the Company for last 3 financial years:
Prescribed CSR Expenditure
Details of CSR spends during the financial year 2018-19:
Total amount to be spent for the financial year (2% of Average Net Profit for the last 3 financial years)
Total amount spent during the financial year
Amount unspent, if any
INR m
62,097
1,242
-
1,242
1,265
-
Source: Company, MOFSL
Exhibit 19: Other operating income remains a healthy component of sales across the years
Particulars (INR m)
Sale of products (including excise duty)
as % of net revenue
Other operating revenue
Income from services rendered
Others (including government grant, scrap sales, etc.)
Other operating revenue as % of net revenue
FY16
3,29,290
98.3
5,620
4,900
720
1.7
FY17
3,38,950
98.3
5,920
5,130
790
1.7
FY18
3,46,190
98.3
5,990
3,600
2,390
1.7
FY19
3,76,600
98.5
5,640
3,000
2,640
1.5
Source: Company, MOFSL
12 June 2019
15

Hindustan Unilever
Exhibit 20: Company shared the below data on trade discounts in FY19 annual report for the first time
Particulars (INR m)
Contracted price
Less: Trade discounts, volume rebates, etc.
Sale of Products
Trade discounts as % of contracted price
Trade discounts as % of sale of products
FY18
3,95,360
49,170
3,46,190
12.4
14.2
FY19
4,29,030
52,430
3,76,600
12.2
13.9
Source: Company, MOFSL
Exhibit 21: Other non-operating income
Particulars (INR m)
Interest income on
Bank deposits
Current investments
Others (including interest on Income tax refunds)
Dividend income from
Subsidiaries
Current investments
Non-current investments
Fair value gain/ (loss)
Investments measured at fair value through profit or loss*
Investments measured at fair value through other comprehensive income
Net gain on sale of investments
Total
690
(30)
-
5,640
860
-
-
5,260
1,130
-
-
5,690
1,640
-
-
6,640
1,360
300
10
1,670
110
-
1,880
-
20
1,020
-
10
2,050
1,080
180
1,730
740
150
1,300
1,220
140
2,320
700
950
FY16
FY17
FY18
FY19
Source: Company, MOFSL
Exhibit 22: Breakdown of current investments
Particulars (INR m)
Current investments
Other instruments
Fair value through other comprehensive income
Quoted
Investments in treasury bills
Fair value through profit and loss
Quoted
Investments in mutual funds
Total
11,960
11,960
24,610
20,600
20,600
35,190
18,300
18,300
28,550
18,130
18,130
26,930
12,650
12,650
14,590
14,590
10,250
10,250
8,800
8,800
FY16
FY17
FY18
FY19
Source: Company, MOFSL
12 June 2019
16

Hindustan Unilever
Exhibit 23: Cash conversion cycle
Cash conversion cycle
Days (on avg basis)
Inventory days
Debtor days
Creditor days
Cash conversion cycle
Days (on year end basis)
Inventory days
Debtor days
Creditor days
Cash conversion cycle
FY11
46
15
95
-34
52
17
93
-23
FY12
44
13
79
-22
42
11
76
-24
FY13
36
11
69
-23
36
12
73
-26
FY14
34
11
71
-26
36
11
75
-29
FY15
32
9
66
-24
31
9
63
-23
FY16
30
11
65
-24
30
13
69
-26
FY17
28
11
68
-28
27
11
69
-31
FY18
25
11
69
-33
25
12
74
-37
FY19
23
13
67
-31
23
16
68
-28
FY20E
22
13
69
-34
24
11
77
-42
FY21E
24
12
72
-36
28
14
76
-35
Source: Company, MOFSL
Exhibit 24: Inventory days component-wise breakdown
Particulars (Days)
On average basis
Raw material
Packing material
Work-in-progress
Finished goods
Stores and spares
Inventory
On year end basis
Raw material
Packing material
Work-in-progress
Finished goods
Stores and spares
Inventory
9
1
4
14
1
30
9
1
2
14
1
27
8
1
3
13
1
25
8
0
2
12
1
23
9
1
4
15
1
30
9
1
3
14
1
28
8
1
2
13
1
25
8
0
2
12
1
23
FY16
FY17
FY18
FY19
Source: Company, MOFSL
12 June 2019
17

Hindustan Unilever
Valuation and view
We believe that HUVR is likely to continue outperforming smaller players on the
volumes front. We note of the emergence of four key trends that have the
potential to drive an elevated earnings growth trajectory: (1) rapidly improving
adaptability to market requirements, (2) recognition and strong execution on
Naturals and other evolving categories, (3) continuous strong premiumization
trend and (4) extensive use of technology, creating further entry barriers.
Notably, if we incorporate the GSKCH merger (no clarity on the date yet) in our
estimates, then it will result in 8-9% addition to EPS in FY21, which means that
the stock is trading closer to 43x FY21E EPS (v/s over 46x as it appears currently).
In our view, this valuation premium should sustain, given the company’s best
earnings growth visibility in the large-cap Indian consumer space and by far the
highest return ratios.
On a target multiple of 50x Jun'21E EPS, we maintain our
Buy
rating and target
price of INR2,070.
Exhibit 26: Consumer sector P/E (x)
Exhibit 25: HUVR P/E (x)
75.0
60.0
45.0
30.0
15.0
0.0
P/E (x)
Min (x)
Avg (x)
+1SD
46.7
23.5
37.2
27.6
52.4
Max (x)
-1SD
58.1
P/E (x)
55.0
47.0
39.0
31.0
23.0
15.0
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
47.4
39.9
33.3
26.6
18.2
40.3
Source: Bloomberg, Company, MOFSL
Source: Bloomberg, Company, MOFSL
12 June 2019
18

Hindustan Unilever
Story in charts
Exhibit 27: Volumes grew 9.8% in FY19
Doemstic volume growth (%)
9.3
6.8
4.0
4.8
5.8
6.5
9.8
12.1
8.6
Exhibit 28: Expect revenue CAGR of 13.1% over FY19-21…
Total Revenue (INR b)
16.7
9.9
0.8
0.8
221
258
280
308
311
2.7
319
345
382
429
489
8.3
10.7
12.2
Revenue growth (%)
13.9
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 29: ...with gross margin expansion of 90bp over
FY19-21
Gross margin (%)
53.9
53.0 53.0 53.3
47.7
48.8 49.3
50.7 50.8
Exhibit 30: …leading to operating margins expanding by
150bp over the same period
EBITDA Margin (%)
21.1
16.0
14.9 15.5
16.9
18.5 19.0
22.6 23.2
24.1
46.9
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 31: Expect EBITDA CAGR of 16.7% over FY19-21
EBITDA (INR b)
22.9 21.6
16.4
11.8
10.4
5.2
33
40
45
52
57
60
73
86
99
118
EBITDA growth (%)
20.3
18.7
15.0
18.4
Exhibit 32: Expect adj. PAT CAGR of 16.8% over FY19-21
PAT (INR b)
22.6 23.9
11.5
2.7
26
32
36
37
42
14.2
1.9
42
53
63
72
85
PAT growth (%)
24.7
18.2
19.2
14.4
Source: Company, MOFSL
Source: Company, MOFSL
12 June 2019
19

Hindustan Unilever
Financials and valuations
Income Statement
Y/E March
Net Sales
Other Oper. Income
Total Revenue
Change (%)
COGS
Gross Profit
Gross Margin (%)
Operating Exp
% of sales
EBIDTA
Change (%)
Margin (%)
Depreciation
Int. and Fin. Charges
Other Income - Recurring
Profit before Taxes
Change (%)
Margin (%)
Tax
Deferred Tax
Tax Rate (%)
Profit after Taxes
Change (%)
Margin (%)
Non-rec. (Exp)/Income
Reported PAT
FY15
301,705
6,351
308,056
9.9
156,236
151,821
49.3
99,738
32.4
52,082
16.4
16.9
2,867
168
6,184
55,231
15.1
18.3
19,060
-338
33.9
36,510
2.7
12.1
6,643
43,153
FY16
304,990
5,619
310,609
0.8
153,053
157,556
50.7
100,070
32.2
57,486
10.4
18.5
3,208
150
5,640
59,769
8.2
19.6
18,160
-70
30.3
41,679
14.2
13.7
-310
41,369
FY17
312,980
5,920
318,900
2.7
156,850
162,050
50.8
101,580
31.9
60,470
5.2
19.0
3,960
220
5,260
61,550
3.0
19.7
18,650
410
31.0
42,490
1.9
13.6
2,410
44,900
FY18
339,260
5,990
345,250
8.3
162,320
182,930
53.0
110,170
31.9
72,760
20.3
21.1
4,780
200
5,690
73,470
19.4
21.7
21,480
-1,000
27.9
52,990
24.7
15.6
-620
52,370
FY19
376,600
5,640
382,240
10.7
179,600
202,640
53.0
116,270
30.4
86,370
18.7
22.6
5,240
280
6,640
87,490
19.1
23.2
25,650
-790
28.4
62,630
18.2
16.6
-2,270
60,360
FY20E
423,056
5,922
428,978
12.2
200,185
228,793
53.3
129,444
30.2
99,349
15.0
23.2
5,545
288
8,072
101,589
16.1
24.0
29,969
0
29.5
71,620
14.4
16.9
0
71,620
(INR M)
FY21E
482,443
6,218
488,661
13.9
225,230
263,431
53.9
145,816
29.8
117,615
18.4
24.1
5,885
297
9,673
121,107
19.2
25.1
35,727
0
29.5
85,381
19.2
17.7
0
85,381
Balance Sheet
Y/E March
Share Capital
Reserves
Capital Employed
Net Fixed Assets
Capital WIP
Investment in Subsidiaries
Current Investments
Deferred Charges
Curr. Assets, L&A
Inventory
Account Receivables
Cash and Bank Balance
Others
Curr. Liab. and Prov.
Account Payables
Other Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOSL Estimates
FY15
2,164
35,084
37,248
24,575
4,790
6,541
26,238
1,960
72,236
26,027
7,829
25,376
13,005
99,093
48,515
29,828
20,749
-26,857
37,248
0
(INR M)
FY16
2,164
60,630
62,794
29,147
3,860
3,130
24,670
1,680
76,509
25,284
10,645
27,590
12,990
76,202
54,980
12,382
8,840
307
62,794
0
FY17
2,164
62,740
64,904
40,240
2,030
2,540
35,250
1,600
65,850
23,620
9,280
16,710
16,240
82,606
60,060
13,826
8,720
-16,756
64,904
0
FY18
2,164
68,590
70,754
41,420
4,300
2,540
28,570
2,550
92,110
23,590
11,470
33,730
23,320
100,736
70,130
16,376
14,230
-8,626
70,754
0
FY19
2,165
74,430
76,595
43,430
3,730
2,540
26,950
3,390
98,615
24,220
16,730
36,880
20,785
102,060
70,700
15,860
15,500
-3,445
76,595
0
FY20E
2,165
77,213
79,377
42,885
3,730
2,540
27,950
3,390
122,529
28,204
12,750
58,891
22,685
123,648
90,495
16,653
16,500
-1,118
79,377
0
FY21E
2,165
79,469
81,633
42,001
3,730
2,540
28,950
3,390
138,106
37,111
18,505
57,724
24,766
137,084
102,098
17,486
17,500
1,022
81,633
0
12 June 2019
20

Hindustan Unilever
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout %
Valuation (x)
P/E
Cash P/E
EV/Sales
EV/EBITDA
P/BV
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
439
FY15
16.9
18.2
17.2
15.0
90
501
FY16
19.3
20.7
29.0
15.5
97
511
FY17
19.6
21.5
30.0
17.0
98
637
FY18
24.5
26.7
32.7
20.0
99
752
FY19
28.9
31.4
35.4
22.0
95
860
FY20E
33.1
35.6
36.7
26.5
96
1025
FY21E
39.4
42.2
37.7
32.0
97
109.3
101.4
13.1
76.0
107.1
0.8
95.8
88.9
13.0
68.9
63.6
0.8
93.9
85.9
12.7
65.7
61.5
0.9
75.3
69.1
11.7
54.4
56.4
1.1
63.8
58.8
10.5
45.8
52.1
1.2
55.8
51.7
9.3
39.6
50.3
1.4
46.8
43.8
8.2
33.4
48.9
1.7
104.3
158.2
4,523.0
9
8.1
83.3
119.8
290.6
13
4.9
66.5
96.7
118.7
11
4.8
78.1
108.6
144.0
12
4.8
85.0
119.1
197.5
16
4.9
91.8
130.6
301.4
11
5.3
106.1
150.8
537.4
14
5.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Cash Flow Statement
Y/E March
OP/(loss) before Tax
Financial other income
Depreciation
Net Interest Paid
Direct Taxes Paid
(Incr)/Decr in WC
CF from Operations
Other Items
(Incr)/Decr in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Invest.
Dividend Paid
Others
CF from Fin. Activity
Incr/Decr of Cash
Add: Opening Balance
Closing Balance
FY15
55,231
-3,559
2,867
-1,890
-17,775
-2,156
32,719
3,506
263
32,982
1,182
4,951
-29,123
-5,403
-34,504
3,166
22,210
25,376
FY16
59,770
-1,910
3,210
-3,160
-17,040
-1,130
39,740
6,004
-6,740
33,000
3,290
2,554
-33,420
-6,660
-40,080
2,214
25,376
27,590
FY17
61,550
-920
3,960
-2,400
-18,040
5,380
49,530
450
-8,520
41,010
-9,700
-17,770
-35,610
-7,030
-42,640
-10,880
27,590
16,710
FY18
72,850
-2,800
4,780
-2,460
-21,880
8,640
59,130
4,880
-8,270
50,860
7,790
4,400
-38,960
-7,550
-46,510
17,020
16,710
33,730
FY19
85,220
-770
5,240
-2,950
-26,850
-2,610
57,280
4,460
-7,240
50,040
3,270
490
-45,460
-9,160
-54,620
3,150
33,730
36,880
FY20E
101,589
-8,072
5,545
288
-29,969
19,684
89,065
7,603
-5,000
84,065
-1,000
1,603
-68,837
181
-68,656
22,011
36,880
58,891
(INR M)
FY21E
121,107
-9,673
5,885
297
-35,727
-3,308
78,581
9,347
-5,000
73,581
-1,000
3,347
-83,124
29
-83,095
-1,168
58,891
57,724
12 June 2019
21

Hindustan Unilever
NOTES
12 June 2019
22

Hindustan Unilever
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
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2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
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7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
12 June 2019
23

Hindustan Unilever
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
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12 June 2019
24