Hindustan Lever
Cluster: Apple Green
Recommendation: Buy
Price target: Rs300
Current market price: Rs256
Price target revised to Rs300
We expect the home and personal care (HPC) product business of Hindustan Lever Ltd (HLL) to grow at a compounded annual growth rate (CAGR) of 18.5% over CY2004-07E for three reasons.
- The consumption of HPC products is rising due to a rise in the personal disposable income of Indians and the increased demand for such products from the rural markets.
- Shampoos and deodorants are the fastest growing segments in the fast moving consumer goods (FMCG) sector (both growing at 30%+) and HLL has a significant presence in both the categories.
- HLL has restructured its major brands, eg Fair and Lovely and Lakme, which are expected to perform better as a result