HINDUNILVR - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.2

🧾 Core Financial Analysis

📈 Profitability & Growth

PAT Qtr: ₹2,565 Cr vs ₹2,604 Cr — ↓2.61% QoQ, flat performance but stable.

EPS: ₹45.3 — solid, though not exceptional given the high valuation.

ROE (20.7%) & ROCE (27.8%) — excellent return metrics, hallmark of a high-quality FMCG business.

💰 Cash Flow & Debt

Debt-to-Equity: 0.03 — virtually debt-free, strong financial health.

Dividend Yield: 1.75% — decent for a defensive stock.

Cash Flow: Consistently strong due to stable margins and low working capital needs.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 55.3 Overvalued vs industry PE of 42.1

P/B Ratio ~11.7 High, but justified by brand strength and ROE

PEG Ratio 10.3 Indicates growth is not keeping pace with valuation

Intrinsic Value Estimated ~₹2,200–₹2,300 Based on earnings and sector benchmarks

🧼 Business Model & Competitive Advantage

Sector: FMCG — Hindustan Unilever Ltd is India’s largest consumer goods company.

Portfolio: Includes household brands like Dove, Surf Excel, Lifebuoy, and Horlicks.

Moat: Deep distribution network, brand equity, and pricing power.

Growth Drivers: Urbanization, premiumization, and rural penetration.

Risks: Valuation pressure, input cost inflation, and regulatory changes.

📉 Technical & Sentiment Indicators

RSI: 55.9 — mildly bullish, but not overbought.

MACD: 25.6 — positive momentum.

DMA 50 & 200: Price slightly above both — stable uptrend.

Volume: Below average — suggests cautious accumulation.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹2,300–₹2,400 — near intrinsic value and DMA support.

Ideal for long-term accumulation during market dips or sector rotation.

📈 Long-Term Holding View

Strong hold for conservative investors.

Premium valuation justified by brand strength, consistent cash flows, and defensive nature.

Hold with a 5+ year horizon for compounding returns and dividend stability.

Upside potential toward ₹2,800–₹3,000 as consumption trends strengthen.

Would you like a peer comparison with Nestlé India or Dabur to explore FMCG sector positioning?

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