Hindustan Unilever
BSE SENSEX
33,957
S&P CNX
10,047
9 June 2020
Annual report Update | Sector: Consumer
CMP: INR2,106
TP: INR2,400 (+14%)
Strengthening building blocks
Buy
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Hindustan Unilever’s (HUVR) FY20 Annual Report highlights the company’s
continuous efforts to strengthen its building blocks, thus enabling the sustenance of
robust growth. Key insights highlighted from the report below:
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 (%)
Financials Snapshot (INR b)
Y/E Mar
2020
Sales
387.9
Sales Gr. (%)
1.5
EBITDA
96.0
Margins (%)
24.8
Adj. PAT
67.4
Adj. EPS (INR)
31.2
EPS Gr. (%)
11.1
BV/Sh.(INR)
37.2
Ratios
RoE (%)
86.0
RoCE (%)
119.8
Payout (%)
96.2
Valuations
P/E (x)
67.5
P/BV (x)
56.6
EV/EBITDA (x)
46.8
Div. Yield (%)
1.2
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-20
67.2
6.7
12.1
14.1
HUVR IN
2,345
4945.2 / 65.5
2614 / 1660
-6/21/29
6725
38.1
Setting up/adapting to key trends keeping HUVR ahead in the game:
The
Personal Care category witnessed significant effects of the slowdown in
2HFY20, which culminated with the sharp COVID-19 led decline toward the
year-end. Despite this, HUVR reported another year of double-digit earnings
growth, taking its earnings CAGR over the past 3 years to 16.6%, even as peers
(many of whom are much smaller) witnessed revenue deceleration over the
same period. If not for the COVID-19 disruption impact, sales growth would
have been healthy for the third consecutive year as well.
A few factors from the FY20 Annual Report and our observations on the
same, which highlights HUVR’s strengths.
Sustained strong growth in Detergents, transformation potential in Skin
Cleansing:
The MGT-9 section in the annual report showcases the
importance of the role played by Detergents (22.5% of total sales) in
driving overall growth. After contributing as much as ~38%/~47%/~44% to
incremental sales in FY19/FY18/FY17, Detergents contributed over 100% of
incremental sales growth in FY20, making up for the decline in Soaps and
Cosmetics and Toiletries (the other two large product categories). Strong
premiumization and considerable success in growing volumes as part of
the company’s ‘Winning in Many Indias’ (WIMI) strategy has led to another
year of (near) double-digit sales growth even as the rest of its portfolio has
slowed down.
While performance of Soaps (~27% of FY20 sales) has been tepid over the
past 5 years now, we believe that the ‘COVID’ and ‘post-COVID’ scenarios
offer an opportunity for transformative growth – not only in terms of sales
but also in terms of premiumization in the category – both benefits that
HUVR is already enjoying in the Detergents business. Thus, the potential
resumption of growth in Soaps should provide strong momentum to half of
HUVR’s sales.
Relentless pursuit of cost savings:
HUVR’s annual report indicates that the
company was able to generate gross cost savings of 7% of sales in FY20,
another remarkable achievement, which also underlines the potential for
margin improvement over the longer term, especially with strong synergies
from the GSKCH business. While margin expansion may take a backseat in
FY21 owing to the COVID-19 fallout, the company’s ability to extract more
savings compared to peers should drive continued superior earnings
growth.
2021E
442.4
14.1
109.5
24.8
79.2
33.8
8.3
55.9
75.0
103.0
103.6
62.3
37.7
44.0
1.7
2022E
515.9
16.6
135.7
26.3
101.7
43.4
28.4
57.3
76.7
103.3
101.4
48.5
36.8
35.4
2.1
Dec-19
67.2
6.7
12.3
13.8
Mar-19
67.2
7.0
11.8
14.0
FII Includes depository receipts
Krishnan Sambamoorthy – Research analyst
(Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 6129 1545
Research analyst: Pooja Doshi
(Pooja.Doshi@MotilalOswal.com); +91 22 6129 1573 |
Dhairya Dhruv
(Dhairya.Dhruv@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.
 Motilal Oswal Financial Services
Hindustan Unilever
Stock Performance (1-year)
Increasing confidence on inorganic growth:
HUVR’s annual report also
enumerates its success and/or ambitious plans on the acquisition of Indulekha,
Adityaa Ice-cream, GSK CH and potentially V-Wash. This leads us to believe that
inorganic growth would remain a highly important part of HUVR’s incremental
growth. While HUVR has the skillset, we believe it now seems to be exhibiting
increasing confidence on inorganic growth due to (a) access to impressive cash
flows, (b) ability to leverage its wide distribution reach, (c) superior
understanding v/s peers on usage of lower unit packs (LUP), and (d) new-found
nimbleness in all aspects of decision making.
WIMI and superior analytics to continue being significant game changers:
While pace of sales growth is likely to slow down temporarily in FY21 due to the
COVID-19 impact, HUVR’s annual report again highlights the quantum of their
lead v/s peers on the WIMI strategy/analytics. Both these factors enable HUVR
to leverage its overall superiority on total distribution reach as well as direct
distribution reach.
Sustainability:
HUVR’s efforts on a host of critical factors like renewable energy
(now 71% contribution), reduction in environmental footprint, 85% reduction in
carbon dioxide emissions over 2008 levels, waste water reduction, and more
recently sustainable sourcing strengthens its long-term investment case.
Valuation and view:
Despite being the largest consumer company in India, its
10-year sales/EBITDA/PAT growth has been healthy at 8.1%/13.3%/12.4% CAGR.
Earnings growth has consistently gained momentum in recent years, which is
particularly impressive given the weak mid-single earnings growth posted by
(much smaller) peers in recent years. HUVR has delivered EBITDA/PAT CAGR of
13%/13.1% in the last five years, while both EBITDA/PAT have reported ~17%
CAGR in the last three years ending FY20.
HUVR’s best of breed analytics and execution ability (exhibited by successful
implementation of the WIMI strategy, cost savings plans, herbals, etc.) are key
factors driving this pace of earnings growth. Additionally, our conviction over
the medium-term is further strengthened by its (a) strong balance sheet, (b)
robust cash flow generation and increasing willingness in recent years to use
cash flow for inorganic growth, (c) excellent management quality/ corporate
governance, and (d) proven track record of consistent delivery even in a weak
consumption environment.
Further, as highlighted in our detailed report in
Feb’20,
we remain positive on
HUVR from a medium-term perspective due to (a) robust earnings growth
potential beyond the near term owing to its portfolio and execution strengths,
(b) significant synergies in FY22E as a result of GSK CH, and (c) its RoCE levels
being well ahead of peers. All these factors mean that premium multiples are
likely to sustain. Moving our forecasts to merged numbers (which add over 9%
to FY22E EPS due to the nature of the GSK merger and synergies), we value the
company at 55x merged EPS, to arrive at a TP of INR2,400 and maintain
Buy.
9 June 2020
2
 Motilal Oswal Financial Services
Hindustan Unilever
Highlights from FY20 Annual Report
Market growth decelerates markedly on challenging macros
Even before the COVID-19 outbreak, the macro-economic environment was
challenging with low GDP growth rates, liquidity crunch and peaking
unemployment rate. FMCG markets witnessed deceleration from the highs of
2018 with rural markets seeing sharper rate of consumption slowdown than
urban markets. FY20 also witnessed some weather disruptions in the form of
late onset of monsoons in certain parts of the country, post-monsoon heavy
showers and a delayed winter.
Overall, the market also witnessed disparate trends across divisions with
discretionary categories like Beauty and Personal Care facing adverse impact of
the slowdown, while Home Care, and Foods and Refreshment categories were
relatively more insulated due to their essential nature.
Exhibit 1: Market context – Challenging
Source: Company, MOFSL
COVID-19 impact and HUVR’s responses
In early-CY20, COVID-19 pandemic started to spread globally. Governments
announced lockdowns, declared geographies as hotspots and asked people to
stay indoors. In these unprecedented times, HUVR relied on the fundamentals
to drive agility and responsiveness across the value chain and structured its
responses around five key imperatives – People, Supply, Demand, Community,
and Cost and Cash.
People:
HUVR was proactive and swift in ensuring safe working conditions,
strict standards of social distancing, necessary infrastructure and equipment
across operations.
Supply:
It continued to work closely with the Government, prioritized key
SKUs, made planning cycles more agile and created flexible alternatives,
which helped it reboot the supply lines to a large extent.
Demand:
Many of HUVR’s categories and brands moved quickly to re-plan
innovations, adjusted to consumer-buying in different channels, and re-
worked brand communication to remain consumer relevant.
9 June 2020
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Hindustan Unilever
Community:
HUVR amplified its efforts, right from donating
Lifebuoy
soaps,
to strengthening healthcare infrastructure and spreading awareness
through a nationwide campaign in partnership with UNICEF.
Cash and Cost:
It focused on the long-term health of the business, keeping
its ambition of savings unchanged.
Exhibit 2: COVID-19 – Adverse nationwide impact in second half of Mar’20
Source: Company, MOFSL
Exhibit 3: Clear imperatives and consistent strategy
Source: Company, MOFSL
Focus on core strategy supported business performance in FY20
HUVR remained focused on (a) strengthening the core, (b) accelerating
premiumization, and (c) driving market development with its large portfolio of
products that straddled the price-benefit pyramid.
Transformation programs such as WIMI, Re-imagining HUL and Connected 4
Growth (C4G) helped the company in faster decision-making, localization and
swifter innovation delivery, and increased speed-to-market, which drove its
business performance.
During FY20, HUVR’s on-shelf availability was at an all-time high with the
Customer Case Fill on Time (CCFOT) at over 95%. At the same time, it improved
9 June 2020
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Hindustan Unilever
on-shelf quality by 30% over the previous year. Moreover, its cost savings
programs helped it deliver 7% of turnover as gross savings last year.
Mergers and Acquisitions – a key growth area
Unlike the past, the inorganic route should be an important component of
HUVR’s top-line/bottom-line growth, in our view. This can be attributed to its (a)
access to impressive cash flows, (b) ability to leverage its strong distribution
reach, (c) superior understanding v/s peers on usage of lower unit packs (LUP),
and (d) new-found nimbleness in all aspects of decision making.
‘GSK CH’ – One of the largest FMCG deals in recent times:
HUVR completed the
merger of GSK CH on 1
st
Apr’20. In order to ensure seamless integration, HUVR
put in place a dedicated team resourced with senior leadership. There was a
detailed plan on the key aspects of integration with clear and measurable
milestones, which was continuously reviewed by management for overall
business integration.
The merger was in line with the company’s strategy to build a sustainable
and profitable Foods and Refreshment (F&R) business in India by leveraging
the megatrend of health and wellness. GSK CH is the undisputed leader in
the Health Food Drinks (HFD) category, with iconic brands such as
Horlicks
and
Boost,
and a product portfolio supported by strong nutritional claims.
Thus, this merger should bolster HUVR’s focus to build a profitable and
sustainable Nutrition business in India. GSK CH’s other brands like
Maltova
and
Viva
would also come to HUVR’s brand portfolio due to the merger.
As mentioned in the annual report, “In
accordance with the merger scheme,
HUVR issued and allotted 184.6m equity shares of INR1 to eligible
shareholders of the now amalgamated GSK CH, who were holding shares of
GSK CH as on the record date i.e. 17
th
Apr’20 in the ratio of 4.39 shares of the
Company for every one share held in GSK CH.”
Consequent to the scheme,
the authorized share capital of the HUVR increased to 2,850m equity shares
of INR1/- each.
Following the merger of GSK CH, HUVR now has ~21,000 employees working
across 31 company-owned factories and 15 offices, more than 1,150
suppliers (and products stocked in warehouses) and over 4,500 distributors
across the country.
Exhibit 4: Leverage on mega trend of health and wellness
Source: Company, MOFSL
9 June 2020
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Hindustan Unilever
Exhibit 5: Transaction highlights
Source: Company, MOFSL
VWash:
During the year, HUVR entered into an agreement with Glenmark
Pharmaceuticals to acquire its intimate hygiene brand
VWash.
The deal involved
acquisition of intellectual property rights including trademarks, design and
know-how related to the
VWash
brand.
The proposed acquisition is in line with HUVR’s strategic intent to enter the
fast-growing segments of the future in the premium Beauty and Personal
Care category.
Exhibit 6: Intimate hygiene – Huge potential for market
development
Exhibit 7:
VWash
– Strong and established brand
Source: Company, MOFSL
Source: Company, MOFSL
Key highlights from Form No MGT-9
In this segment of the annual report, the company shares data on sales of key
categories (beyond the usual broad segmental details). Key observations on the
top three categories i.e. Soaps, Detergents and Cosmetics and Toiletries are
mentioned below:
Soaps:
Over the past 5 years, contribution of soaps to HUVR’s total revenue
has declined steadily from 32% in FY15 to 27% in FY20, due to tepid sales
growth over the same period. High penetration and less premiumization
compared to Detergents has been a major problem. In fact, sales actually
posted 3.4% decline in FY20. However, we believe that the ‘COVID’ and
‘post-COVID’ scenarios offer an opportunity for transformative growth – not
9 June 2020
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Hindustan Unilever
only in terms of sales but also in terms of premiumization in the category –
both benefits that HUVR is already enjoying in its Detergents business.
Exhibit 8: Over the past 4 years, share of soaps to HUVR’s total revenues has been steadily declining
Y/E
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 (%)
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
FY20
1,06,954
1,03,337
28.4
27.0
3.0
-3.4
3,097
(3,617)
10.2
(59.0)
Source: Company, MOFSL
Detergents:
While Soaps’ performance has been disappointing, Detergents
– despite the huge category size and equally high penetration level – has
been a stellar performer. Despite the heavy base of 17.1% in FY19,
Detergent category sales were robust at 9.9% in FY20 (a period when overall
revenues grew ~2%). Moreover, after contributing 44.1%/47.4%/37.6% of
incremental sales during the preceding three years, detergents contributed
over 100% of incremental sales in FY20. This was led by massive
premiumization as well as healthy volume growth in the category. Given
that the category is an important part of incremental sales, we need to keep
a close eye on the competition, especially from P&G Home Products.
Exhibit 9: Detergents – Stellar performance despite the huge size
Y/E
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 (%)
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
FY20
78,333
86,114
20.8
22.5
17.1
9.9
11,449
7,781
37.6
126.9
Source: Company, MOFSL
Cosmetics and Toiletries:
After some revival in FY19, sales growth again
dipped to 2.2%. However, category contribution to HUVR’s incremental
sales stood resilient at 23% in FY20.
Exhibit 10: After some revival in sales growth last year, Cosmetics and Toiletries reported mere ~2% growth in FY20
Y/E
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 (%)
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
FY20
64,681
16.9
2.2
1,413
23.0
Source: Company, MOFSL
9 June 2020
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Hindustan Unilever
Key broader segmental highlights
A) The Beauty and Personal Care (BPC) division
being discretionary in nature was
more affected due to the challenging macro-economic environment. Within the
category, Personal Products delivered good growth in FY20. However, the company
is working on its Skin Cleansing portfolio to strengthen its competitiveness by taking
decisive interventions in areas such as product, proposition, pricing and
communication. Despite the challenges, the company has continued to strengthen
its core business by driving penetration of
Fair & Lovely, Pond’s, Sunsilk, Dove
and
Close Up
to name a few. Moreover, it remains focus on (a) strengthening its core
brands, (b) accelerating premiumization of its portfolio, (c) driving market
development at scale, and (d) strengthening its ‘Naturals’ play.
Exhibit 11: Beauty and Personal care performance
Particulars (INR b)
Beauty & Personal Care revenue
YoY growth (%)
Contribution to total turnover (%)
Beauty & Personal Care EBIT
YoY growth (%)
Margins (%)
Beauty & Personal Care contribution to total EBIT (%)
FY17
163
1.8
47.3
38
1.2
23.6
64.9
FY18
165
1.0
46.8
42
8.1
25.3
60.9
FY19
FY20
177
173
7.2
(1.8)
46.2
44.7
47
49
12.6
3.9
26.5
28.1
58.0
56.2
Source: Company, MOFSL
In the Beauty and Personal Care (BPC) division,
HUVR has huge portfolio of more
than 900 SKUs spread across one or more categories with many products tailored
for 14 consumer clusters identified in India.
1)
Within Skin Care,
Fair & Lovely
continued to deliver healthy growth. In 2019,
Fair & Lovely
combined the new facial glow trends along with enhanced
technology to arrive at a ‘High Definition (HD) Glow’ product line to meet its
consumer needs. HUVR also launched
Fair & Lovely
soap in FY20, which received
good initial response. Moreover, advanced moisturizing and skin refreshing
ranges were launched by HUVR’s
Lakmé
to meet evolving consumer needs.
2)
In Skin Cleansing,
Dove, Pears
and the liquid portfolio led HUVR’s
premiumisation journey. The company launched a new transparent
Pears
bar,
with the range inspired by natural ingredients through use of proprietary ‘ultra-
low TFM (total fatty matter)’ technology.
3)
Within Hair care,
HUVR launched new variants in
Dove
and
Sunsilk
in line with
its continued focus on ‘Naturals’ trend in this category. It also launched
TRESemmé
sachet to drive more users to the category and accelerate
premiumization.
4)
Within Deodorants,
Rexona,
a leading anti-perspirant brand continued to drive
market development.
5) ‘Naturals’ portfolio in BPC was strengthened with its three-pronged approach:
The master brand LEVER Ayush continued its momentum in the focused
market
of South India. It further strengthened the portfolio by launching
LEVER
Ayush Bhringaraj
hair oil.
HUVR has continued to build specialist brands
like
Indulekha
and
Hamam.
Indulekha
delivered robust performance and a new variant – Neemraj oil –
was launched in FY20.
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Hindustan Unilever
The third leg of its ‘Naturals’ strategy involved various natural variants
within its existing portfolio of products
like
Lifebuoy
neem and turmeric,
Dove
and
Sunsilk
‘Naturals’ in Hair Care, and the aloe vera range in Vaseline.
6)
Other launches:
(a) Matte revolution – a premium makeup range – drove
growth in the category along with a 3D makeup range, (b) A purpose-driven
brand from the Unilever stable –
‘Love, Beauty and Planet’
– made from
sustainably sourced ingredients and packaged in recycled plastic.
B) The Home Care business
continued its strong volume-driven profitable growth
during FY20 in both Fabric Solutions and Home and Hygiene.
Exhibit 12: Home Care performance
Particulars (INR b)
Home care revenue
YoY growth (%)
Contribution to total turnover (%)
Home care EBIT
YoY growth (%)
Margins (%)
Home care contribution to total EBIT (%)
FY17
113
4.9
32.9
13
19.6
11.1
21.2
FY18
116
2.5
33.0
17
34.7
14.6
24.8
FY19
129
10.7
33.7
22
27.6
16.8
26.8
FY20
136
5.9
35.2
26
18.3
18.8
26.6
Source: Company, MOFSL
1)
Fabric Wash delivered healthy performance on the back of
Continuous premiumization in
Surf Excel
and
Rin
whilst regaining growth in
the mass segment led by
Wheel.
Flexible lower unit packs (LUPs) were introduced in detergent liquids and
fabric conditioners to make them more affordable to consumers and further
drive consumption and penetration. As a result, HUVR reported strong
growth trajectory in
Surf Excel Matic
liquid and
Comfort
fabric conditioner.
The year also saw the strategic re-launch of
Rin Matic
powders to create
affordable solutions for the mid-tier washing-machine consumer segment.
The company’s focus was to build a portfolio of liquid detergents spread
across the price-benefit map.
Surf Excel
started this journey with the first
detergent liquid launch of ‘Matic’ designed for washing machines; in 2019,
HUVR launched
Surf Excel Easy Wash
liquid in the hand-washing segment. In
FY20, HUVR also launched
Sunlight
liquid detergent in select geographies
and a premium expert-care solution range under the new detergent brand –
Love & Care.
The company launched
Comfort
perfume-deluxe range in select geographies
offering longer-lasting benefits of fragrances and introduced a unique
ancillary product –
Magic
rinse-powder sachet – to ease the rinsing process,
thereby reducing foam and water requirement.
Rin
bar was also re-launched in South India with visual cues.
2)
In the Life Essentials segment,
HUVR sharpened its focus on the premium
portfolio and launched
Pureit Copper+.
3)
In Household Care,
Vim
led the market development for dish-wash by driving
category adoption of
Vim
bar in rural India and upgrading existing consumers
from bars to the liquid format in urban India.
Vim
liquid and
Domex
powder continued to perform well.
Domex
toilet
cleaner was re-launched with long-lasting freshness proposition. The low-
cost
Domex
powder, designed for squat toilets, was extended to selected
geographies in India.
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Hindustan Unilever
Vim
also entered the dish-wash applicator space through the launch of
Vim
scrubber.
C) Foods and Refreshment business
delivered yet another year of healthy growth,
however, the pace of growth slowed down in FY20.
Exhibit 13: Food and Refreshments’ performance
Particulars (INR b)
Foods & Refreshment revenue
YoY growth (%)
Contribution to total turnover (%)
Foods & Refreshment EBIT
YoY growth (%)
Margins (%)
Foods & Refreshment contribution to total EBIT (%)
FY17
60
7.1
17.3
8
6.3
14.1
14.2
FY18
65
8.6
18.4
10
17.4
15.2
14.4
FY19
71
10.0
18.7
12
25.4
17.3
15.3
FY20
75
4.4
19.2
12
(0.3)
16.5
14.2
Source: Company, MOFSL
1)
In Foods,
the core portfolio of Jams and Ketchup delivered good growth.
Kissan
range of international sauces launched last year was made nationally available.
2)
In Spreads,
HUVR launched
Hellmann’s
mayonnaise in Kolkata.
3)
Refreshments:
With on-trend, superior product offering, Tea continued to
deliver robust, volume-led growth.
BRU
Green Label Nice was launched in South Karnataka, which was
specifically tailored to the needs of conventional coffee consumers in the
region.
Within Coffee, the company introduced an improved instant coffee product.
HUVR launched
Lipton
Matcha Green Tea on Ecommerce to capture the
growing health and wellness trend amongst millennials and urban
population that are over-indexed on such Ecommerce platforms.
4)
In the Ice Cream and Frozen Desserts business,
HUVR rolled out a number of
innovations at the top end as well as at the bottom of the pyramid, which
catered to both global and local palates, such as
Cornetto
Brownie Silk,
Magnum
Hazelnut,
Sundae
Cup, Aamras and Dry fruit
Rabri Kulfi,
A new range of tubs in Choco Fudge, Tender Coconut flavours,
Watermelon stick,
Kwality Wall’s
formed a tie-up with food delivery platform ‘RailYatri’.
Overall financial performance
In 9MFY20, domestic consumer sales growth stood at 6%, reflective of HUVR’s
strong performance delivery. In the Mar’20 quarter, HUVR’s performance at an
aggregate level remained competitive with steady growth before the COVID-19
outbreak in India. The second half of Mar’20 saw an exacerbated slowdown due
to the virus outbreak, resultant containment measures by various states and
finally, a nation-wide lockdown. This had an adverse impact on operations with
breakage in supply lines, shortage of manpower and disruptions in
procurement/transport, offsetting the resilient growth levels achieved hitherto.
Given these disruptions, FY20 domestic consumer growth stood at only 2% with
underlying volume growth of also 2%.
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Exhibit 14: 9MFY20 domestic consumer sales growth stood at 6% even on a high base…
Domestic FMCG sales growth (%)
Source: Company, MOFSL
Exhibit 15: …underlying volume stood at 5% YoY in 9MFY20
Underlying volume gr. (%)
Source: Company, MOFSL
Exhibit 16: Volumes growth stood at 2% in FY20
Doemstic volume growth (%)
9.3
6.8
4.0
4.8
5.8
6.5
2.0
9.8
Exhibit 17: Tepid revenue growth due to COVID-19 impact
Total Revenue (INR b)
16.7
12.1
8.6
9.9
0.8
2.7
8.3
10.7
1.5
Revenue growth (%)
14.1
16.6
0.8
221 258 280 308 311 319 345 382 388 442 516
Source: Company, MOFSL
Source: Company, MOFSL
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Exhibit 18: HUVR’s reach is significantly superior to peers with total reach of 8m outlets
43%
41%
35%
Direct reach as a % of total reach
33%
33%
31%
22%
18%
18%
16%
HUL
BRIT
TGBL
CLGT
NEST
Jyothy
GCPL
MRCO
HMN
DABUR
Source: Company, MOFSL
The company’s EBITDA margin stood at record high of 24.8%. The margin
expansion was a result of strong savings agenda, scale efficiencies achieved on
the back of healthy volume growth, mix impact given strong portfolio of
premium brands and market development cells. PAT (bei) grew 10.9% to
INR67.4b. We believe that the encouraging gross cost savings of up to 7% of
sales in FY20 as well as GSKCH’s synergies provide significant encouragement for
continuous improvement of longer-term margins. However, this is albeit some
let up in FY21 as during the first few months of the year (a) pace of sales growth
is likely to be affected, and (b) demand for discretionary products (usually higher
margins) is likely to be weak.
Exhibit 20: Highest-ever operating margins in FY20
EBITDA Margin (%)
54.1 54.3
55.7
22.6
24.8 24.8
26.3
Exhibit 19: Robust gross margins
Gross margin (%)
53.0 53.0
46.9 47.7
48.8 49.3
50.7 50.8
16.0 16.9
14.9 15.5
18.5 19.0
21.1
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 21: Margin expansion trajectory likely to continue in medium term
Y/E March (INR b)
Gross Profit
Gross Margin (%)
Gross margin change – YoY (bps)
EBIDTA
EBITDA Margin (%)
EBITDA margin change – YoY (bps)
FY15
152
49.3
50
52
16.9
90
FY16
158
50.7
140
57
18.5
160
FY17
162
50.8
10
60
19.0
50
FY18
183
53.0
220
73
21.1
210
FY19
203
53.0
0
86
22.6
150
FY20
210
54.1
110
96
24.8
220
FY21E
FY22E
240
287
54.3
55.7
10
140
110
136
24.8
26.3
0
150
Source: Company, MOFSL
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Exhibit 22: Other expenses (incl. A&P) to sales trend over the past 4 years
Companies
HUL
Britannia
Colgate
Dabur
Emami
GCPL
ITC*
Marico
Nestle
P&G Hygiene and Healthcare*
FY16
27.2
21.8
30.8
21.9
27.6
23.5
17.1
25.0
25.8
29.3
FY17
26.8
20.3
32.0
20.5
28.3
24.3
15.6
25.5
25.0
27.0
FY18
FY19
FY20
26.9
25.8
25.0
19.2
21.0
20.2
30.6
30.7
31.3
19.3
18.2
18.4
29.5
28.4
28.0
24.9
24.7
25.1
14.7
15.0
15.7
22.0
21.1
22.2
24.0
24.8
23.9
31.1
32.9
37.0
Source: Company, MOFSL, *Estimates
Exhibit 23: HUVR has derived maximum benefit through savings in other expenses (incl.
A&P expense) as percentage of sales post GST (FY18-20)
Savings in other expenses (incl. A&P) as % of sales (FY18-20)
1.8
1.5*
0.9
0.1
-1.0*
-0.2
-0.2
-0.7
-1.0
-5.9*
Source: Company, MOFSL, *Estimates
Exhibit 24: EBITDA CAGR of 18.9% over FY20-22E
EBITDA (INR b)
22.9 21.6
16.4
11.8
10.4
5.2
33
40
45
52
57
60
73
86
96
110 136
EBITDA growth (%)
20.3
23.9
18.7
11.1
14.1
Exhibit 25: Adj. PAT CAGR of 22.8% over the same period
Adj. PAT (INR b)
22.6 23.9
11.5
14.2
37
2.7
42
42
1.9
53
61
67
79
102
Adj. PAT growth (%)
24.7
14.7
17.5
10.9
28.4
26
32
36
Source: Company, MOFSL
Source: Company, MOFSL
Working capital improved by 7 days YoY (on year-end basis) and stood at
negative 35 days. RoE expanded by 340bp YoY to 86% in FY20. Growth in OCF at
28% YoY was ahead of PAT growth. With slight decline in capex, FCF rose 32% to
INR66b.
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Exhibit 26: Consistent OCF and FCF generation
OCF (INR b)
FCF (INR b)
137.2
75.3
102.1 98.0 95.9
90.3
79.2
96.5 96.0
82.3
97.9
Exhibit 27: Robust FCF to PAT conversion
FCF to PAT (%)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 28: Cumulative yield of 68% on CMP of INR240 (in 2010)
Cumulative dividend
DPS (INR)
22
15
17
20
25
164
4
FY10
7
FY11
7
FY12
18
13
15
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY20
*Only considered final dividend of INR3.5 in FY10 (Total dividend in FY10 is INR6.5)
Source: Company, MOFSL
Piggybacking on data and technology to service customers
With HUVR’s agenda of ‘Reimagining HUL’, it has embedded technology across
end-to-end value chain to build a business that is ‘future-fit’.
The company is picking up consumer signals real-time through the
People Data
Centre,
which analyzes consumer sentiment and conversations about brands
and categories as well as driving precision marketing to identify consumer needs
and direct target content.
Moreover, its
Connected Stores Program
is coming of age, where it is creating a
complete ecosystem across shoppers and retailers covering demand generation,
demand capture and demand fulfillment. To drive this program, HUVR has a
cross-functional digital council consisting people that are committed to bringing
a digital and technological revolution.
Channels:
In the traditional channel, HUVR is focusing on modernizing trade
through data and technology, and in turn, improving the profitability of retailer
with better assortment and optimized capital.
Through its B2B ordering app, it receives direct feedback from the smaller
local stores. It is also engaged with modern trade and Ecommerce partners
to discuss the appropriate portfolio for each channel, servicing of orders and
providing value to consumers. It has also introduced smartphone apps so
that retailers can place product orders directly, and at the same time, is
designing products appropriate for each channel.
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Exhibit 29: Digital initiatives through use of data and technology
*5)
Source: Company, MOFSL
Sustainability
The company is well placed to deliver long-term value through its strategy and
the Unilever Sustainable Living Plan (USLP).
Exhibit 30: 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
Nutrition
Target
By 2020, Unilever will help more than a billion people
By 2020, Unilever will double the proportion of its
globally to improve their health and hygiene. This will
portfolio across the globe that meets the highest
help reduce the incidence of life-threatening diseases
nutritional standards, based on globally recognized
like diarrhea.
dietary guidelines. This will help hundreds of millions of
people achieve a healthier diet.
Performance
In India, over 152 million people have been reached
50% of HUL’s Foods and Refreshment portfolio met the
through our WASH (Water, Sanitation and Hygiene)
highest nutritional standards in 2019, based on globally
initiatives.
recognized dietary guidelines.
Source: Company, MOFSL
Exhibit 31: 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
~120,000 Shakti Entrepreneurs
4.5m+ people positively impacted
rights with a focus on eight salient
empowered through the Shakti
through Project Prabhat across
human rights issues identified by
program by Mar’20.
manufacturing locations. The
Unilever globally.
initiatives focus on enhancing
livelihoods, water conservation,
nutrition and health and hygiene.
Source: Company, MOFSL
Performance
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Exhibit 32: 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.
Water
By 2020, water
abstraction by Unilever’s
global factory network
will be at or below 2008
baseline despite
significantly higher
volumes.
Water consumption (in
m3 / t of production) in
HUL’s manufacturing
operations reduced by
58% 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 generated (kg
/ t of production) from
HUL’s factories reduced
by 63% over 2008
baseline.
Sustainable sourcing
By 2020, Unilever will
source 100% of its
agricultural raw materials
sustainably.
Performance
CO₂ emissions (kg/t of
production) in HUL’s
manufacturing operations
reduced by 85%
compared to 2008
baseline.
In India, a total of 78% of
tea sourced for Unilever’s
brands is from sustainable
sources. 76% of tomatoes
used in
Kissan
ketchup
were sourced sustainably.
Source: Company, MOFSL
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:
In FY20, HUVR increased the renewable energy share in
their manufacturing to 71%. This was achieved by converting agricultural
process waste from their operations into fuel, besides increasing the utilization
of bio-fuels like agri-waste.
Carbon Dioxide reduction:
The increase in renewable energy usage and
reduction in specific energy consumption has also contributed to CO
2
reduction
in HUVR’s operations per ton by 85% (59% in 2018) as compared to the 2008
baseline.
Plastic Waste:
During the year, HUVR, along with its partner, has been able to
process approximately 12,000t of plastic waste and convert it into electricity. In
addition to this, approximately 59,000t 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 continues to maximize reuse of waste
generated in the manufacturing units, reduction at source, waste segregation
and pre-processing facilities provided at all locations for improving recyclability,
which has resulted in total waste reduction by 58% v/s 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 the entire plastic used by HUVR 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 a
cumulative water conservation potential of over 1,200b liters. Till FY20, HUF’s
water conservation capacity stood at 1,200b liters cumulatively. To put things in
perspective on the importance of the water potential created by HUF – 1b liters
can meet the drinking water needs of over 8lac 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 optimization, improving efficiencies
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and maximizing the use of RO plants have contributed to reduction of water
usage (cubic meter/t of production) in manufacturing by 58% v/s 2008 baseline.
Sustainable sourcing:
HUVR has a clear roadmap to achieve the bold
commitment to source 100% agricultural raw materials sustainably by 2020. In
2020, 76% of tomatoes used in
Kissan
ketchup continued to be sourced
sustainably. In 2020, over 78% of tea in India procured for Unilever brands was
sourced from sustainable sources.
Exhibit 33: HUVR’s delivery on its sustainability plan
Particulars
Reduction in CO2 emissions (kg/t of production) in manufacturing operations compared to 2008 baseline
Reduction in water consumption (m3/t of production) in manufacturing ops. compared to 2008 baseline
Reduction in total waste (kg/t 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
2018
59%
55%
58%
0.11
65%
>150m
2020
85%
58%
63%
0.12
78%
>152m
Source: Company, MOFSL
Remarkable capability building programs
HUL has retained its title of the ‘No. 1 Employer of Choice’ in the industry for the
past 11 years.
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 Program (UFLP):
Enables to identify talent early
and invests to build capability through this flagship program.
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:
HUVR continues to place significant importance on
diversity and inclusion (D&I) in the workplace. Active steps have been taken
over the years to improve gender balance, with a focus on managerial and
senior leadership levels. The company has achieved 41.4% gender balance
at the managerial level (WL2+) in FY20 v/s 39.9% in FY19. The Gender
Balance for senior leadership positions (WL4+) improved from 19.1% in FY19
to 33.3% in FY20.
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 7,159 employees (excluding workmen) and over
5,000 employees are employed on contractual / temporary basis as at FY20.
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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
120,000 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.
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Key tables and charts
Exhibit 34: Gross salary of Mr. Sanjiv Mehta (Chairman and MD) stood at INR194m
Particulars of Remuneration (INR m)
(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
FY17
75
10
23
31
0
0
3
142
0.9
0.2
0.3
Sanjiv Mehta (Chairman and MD)
FY18
FY19
70
88
10
11
56
27
54
58
0
0
0
0
4
4
194
189
1.1
1.1
0.3
0.2
0.4
0.3
FY20
125
0
33
32
0
0
5
194
1.1
0.2
0.3
Source: Company, MOFSL
Exhibit 35: Total remuneration of Mr. Srinivas Phatak (CFO) stood at INR51m
Particulars of Remuneration (INR m)
Gross salary
(a) Salary as per provisions contained in section 17(1) of the IT 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
Srinivas Phatak/ P. B. Balaji (ED, Finance and IT & CFO)
FY17#
FY18*
FY19
FY20
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
24
0
14
8
0
0
5
51
0.3
0.1
0.1
Source: Company,
MOFSL
Exhibit 36: Total remuneration of Mr. Wilhelmus Uijen – ED supply chain stood at INR75m (incl. INR56.9m paid to Mr.
Pradeep Banerjee who ceased to be a WTD of the Company w.e.f. 31
st
Dec’19)
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. Banerjee
Wilhelmus Uijen / Pradeep Banerjee (ED,Supply Chain)
FY17
FY18
FY19
FY20*
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
13
0
2
3
2
17
0
0
0
0
0
15
58
59
75
0.3
0.4
0.1
0.1
0.1
0.1
Source: Company, MOFSL
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Hindustan Unilever
Exhibit 37: Total remuneration of Mr. Dev Bajpai (ED, Legal and Corporate Affairs & CS) declined by 18% in FY20
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
Dev Bajpai (ED, Legal and Corporate Affairs & CS)
FY18
FY19
FY20
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
25
0
13
13
0
0
5
55
0.3
0.1
0.1
Source: Company, MOFSL
Exhibit 38: Economic value added remains healthy
Particulars (INR m)
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
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
20
-
-
-
-
-
-
-
-
-
31,180 34,620 40,180 37,150 43,380 56,640 58,310 61,810 66,670 72,260
31,200 34,620 40,180 37,150 43,380 56,640 58,310 61,810 66,670 7,2260
5.4
6.2
6.0
6.4
5.6
5.4
4.9
5.2
5.8
5.3
12.9
10.1
10.1
11.6
10.9
12.0
12.9
14.2
11.8
9.1
12.9
10.1
10.1
11.6
10.9
12.0
12.9
14.2
11.8
9.1
4,031 3,497 4,046 4,317 4,740 6,785 7,493 8,771 7,894 6,580
21,530 25,990 33,140 35,550 38,430 41,160 42,470 51,350 60,800 67,430
-
10
170
240
110
-
-
-
-
-
21,530 26,000 33,310 35,790 38,540 41,160 42,470 51,350 60,800 67,430
4,031 3,497 4,046 4,317 4,740 6,785 7,493 8,771 7,894 6,580
17,499 22,503 29,264 31,473 33,800 34,375 34,977 42,579 52,906 60,850
Source: Company, MOFSL
Exhibit 39: 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
71,099
1,422
-
1,422
1,437
-
Source: Company, MOFSL
Exhibit 40: Other operating income remains a healthy component of sales albeit slight decline in trend in recent 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
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
FY20
3,82,730
98.7
5,120
2,550
2,570
1.3
Source: Company, MOFSL
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Hindustan Unilever
Exhibit 41: Company shared the below data on trade discounts in FY20 Annual Report
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
FY19
4,29,030
52,430
3,76,600
12.2
13.9
FY20
4,41,970
59,240
3,82,730
13.4
15.5
Source: Company, MOFSL
Exhibit 42: 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
FY17
1,730
740
150
1,670
110
-
860
-
-
5,260
FY18
1,300
1,220
140
1,880
-
20
1,130
-
-
5,690
FY19
2,320
700
950
1,020
-
10
FY20
2,810
390
1,800
950
-
10
1,640
1,370
-
-
-
-
6,640
7,330
Source: Company, MOFSL
Exhibit 43: 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
FY17
FY18
FY19
FY20
14,590
14,590
20,600
20,600
35,190
10,250
10,250
18,300
18,300
28,550
8,800
8,800
18,130
18,130
26,930
-
-
12,480
12,480
12,480
Source: Company, MOFSL
Exhibit 44: 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
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
FY20
24
13
68
-31
FY21E
25
12
68
-31
FY22E
27
14
70
-29
25
29
29
10
15
15
70
76
74
-35
-32
-30
Source: Company, MOFSL
9 June 2020
21
 Motilal Oswal Financial Services
Hindustan Unilever
Exhibit 45: 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
FY17
9
1
3
14
1
28
9
1
2
14
1
27
FY18
8
1
2
13
1
25
8
1
3
13
1
25
FY19
8
0
2
12
1
23
8
0
2
12
1
23
FY20
8
1
2
12
1
24
9
1
2
12
1
25
Source: Company, MOFSL
Valuation & View
Despite being the largest consumer company in India, its 10-year
sales/EBITDA/PAT growth has been healthy at 8.1%/13.3%/12.4% CAGR.
Earnings growth has consistently gained momentum in recent years, which is
particularly impressive given the weak mid-single earnings growth posted by
(much smaller) peers in recent years. HUVR has delivered EBITDA/PAT CAGR of
13%/13.1% in the last five years, while both EBITDA/PAT have reported ~17%
CAGR in the last three years ending FY20.
HUVR’s best of breed analytics and execution ability (exhibited by successful
implementation of the WIMI strategy, cost savings plans, herbals, etc.) are key
factors driving this pace of earnings growth. Additionally, our conviction over
the medium-term is further strengthened by its (a) strong balance sheet, (b)
robust cash flow generation and increasing willingness in recent years to use
cash flow for inorganic growth, (c) excellent management quality/ corporate
governance, and (d) proven track record of consistent delivery even in a weak
consumption environment.
Further, as highlighted in our detailed report in Feb’20, we remain positive on
HUVR from a medium-term perspective due to (a) robust earnings growth
potential beyond the near term owing to its portfolio and execution strengths,
(b) significant synergies in FY22E as a result of GSK CH, and (c) its RoCE levels
being well ahead of peers. All these factors mean that premium multiples are
likely to sustain. Moving our forecasts to merged numbers (which add over 9%
to FY22E EPS due to the nature of the GSK merger and synergies),
we value the
company at 55x merged EPS, to arrive at a TP of INR2,400 and maintain Buy.
9 June 2020
22
 Motilal Oswal Financial Services
Hindustan Unilever
Exhibit 46: HUVR P/E (x)
75.0
55.0
35.0
23.5
15.0
21.0
P/E (x)
Min (x)
Avg (x)
+1SD
53.4
41.4
29.4
70.3
Max (x)
-1SD
Exhibit 47: Consumer sector P/E (x)
51.0
41.0
31.0
P/E (x)
Min (x)
Avg (x)
+1SD
40.5
40.3
34.9
24.5
29.3
Max (x)
-1SD
46.1
60.6
Source: Bloomberg, Company, MOFSL
Source: Bloomberg, Company, MOFSL
9 June 2020
23
 Motilal Oswal Financial Services
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
3,01,705
6,351
3,08,056
9.9
1,56,236
1,51,821
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
3,04,990
5,619
3,10,609
0.8
1,53,053
1,57,556
50.7
1,00,070
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
3,12,980
5,920
3,18,900
2.7
1,56,850
1,62,050
50.8
1,01,580
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
3,39,260
5,990
3,45,250
8.3
1,62,320
1,82,930
53.0
1,10,170
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
3,76,600
5,640
3,82,240
10.7
1,79,600
2,02,640
53.0
1,16,270
30.4
86,370
18.7
22.6
5,240
280
6,640
87,490
19.1
23.2
27,480
-790
30.5
60,800
14.7
16.1
-440
60,360
FY20
3,82,730
5,120
3,87,850
1.5
1,77,930
2,09,920
54.1
1,13,920
29.4
96,000
11.1
24.8
9,380
1,060
7,330
92,890
6.2
24.3
23,940
1,520
27.4
67,430
10.9
17.6
-50
67,380
FY21E
4,37,187
5,222
4,42,409
14.1
2,02,348
2,40,061
54.3
1,30,521
29.5
1,09,540
14.1
24.8
10,846
1,047
10,060
1,07,707
16.0
24.6
28,464
0
26.4
79,243
17.5
18.1
0
79,243
(INR Million)
FY22E
5,10,410
5,484
5,15,893
16.6
2,28,767
2,87,127
55.7
1,51,428
29.4
1,35,698
23.9
26.3
11,593
1,068
12,915
1,35,952
26.2
26.6
34,219
0
25.2
1,01,733
28.4
19.9
0
1,01,733
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: MOFSL 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 Million)
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
1,00,736
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
1,02,060
70,700
15,860
15,500
-3,445
76,595
0
FY20
2,160
78,150
80,310
50,560
5,130
2,500
12,500
2,610
1,22,720
26,360
10,460
50,170
35,730
1,15,710
73,990
25,560
16,160
7,010
80,310
0
FY21E
2,345
1,28,607
1,30,952
40,714
5,256
2,500
13,500
3,749
2,13,629
34,670
18,697
1,15,448
44,814
1,48,396
92,056
32,452
23,888
65,233
1,30,952
0
FY22E
2,345
1,31,963
1,34,307
34,121
5,256
2,500
14,500
3,749
2,39,381
40,412
21,787
1,30,765
46,417
1,65,199
1,05,267
34,075
25,858
74,182
1,34,308
0
9 June 2020
24
 Motilal Oswal Financial Services
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
Working Capital Ratios
Debtor (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
439
FY15
16.9
18.2
17.2
15.0
90
124.8
115.7
15.0
86.9
122.3
0.7
104.3
158.2
9
8.1
0.0
501
FY16
19.3
20.7
29.0
15.5
97
109.3
101.5
14.8
78.7
72.6
0.7
83.3
119.8
13
4.9
0.0
511
FY17
19.6
21.5
30.0
17.0
98
107.3
98.1
14.5
75.0
70.2
0.8
66.5
96.7
11
4.8
0.0
637
FY18
24.5
26.7
32.7
20.0
99
86.0
78.9
13.3
62.1
64.4
0.9
78.1
108.6
12
4.8
0.0
730
FY19
28.1
30.5
35.4
22.0
95
75.0
69.0
12.0
52.3
59.5
1.0
82.5
119.1
16
4.9
0.0
812
FY20
31.2
35.6
37.2
25.0
96
67.5
59.2
11.7
46.8
56.6
1.2
86.0
119.8
10
4.8
0.0
879
FY21E
33.8
38.4
55.9
35.0
104
62.3
54.8
11.0
44.0
37.7
1.7
75.0
103.0
16
3.3
0.0
1128
FY22E
43.4
48.3
57.3
44.0
101
48.5
43.6
9.4
35.4
36.8
2.1
76.7
103.3
16
3.8
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
E: MOFSL Estimates
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
FY20
90,920
-1,630
9,380
-3,940
-24,650
2,970
73,050
22,660
-7,020
66,030
22,490
38,130
-62,440
-4,320
-66,760
44,420
5,750
50,170
FY21E
1,07,707
-10,060
10,846
1,047
-28,464
7,055
88,131
64,670
-1,126
87,005
-1,000
62,544
-82,062
-3,520
-85,397
65,278
50,170
1,15,448
(INR Million)
FY22E
1,35,952
-12,915
11,593
1,068
-34,219
6,368
1,07,847
20,153
-5,000
1,02,847
-1,000
14,153
-1,03,163
-3,520
-1,06,683
15,317
1,15,448
1,30,765
9 June 2020
25
 Motilal Oswal Financial Services
Hindustan Unilever
NOTES
9 June 2020
26
 Motilal Oswal Financial Services
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.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products.
MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on
www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOFSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading
Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity
& Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository
Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory &
Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are available on the
website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should
be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant
banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from
MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or
use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong
Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act"
and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and
investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for
distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document
relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule
15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order
to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities
International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in
respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of
which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
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 Motilal Oswal Financial Services
Hindustan Unilever
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of
MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature.
The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed,
in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose
and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report
constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities
discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives,
financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document
should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including
the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be
suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial
risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions
contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as
endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and
alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect
or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment
banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and
independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other
person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of
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MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category
of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors,
employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may
arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any
and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold
MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person accessing this information due to any
errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management
Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of
Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a
group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory
services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee
of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj
Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOFSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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