ICICI Securities: HUL - Willingness (Necessity?) To Sacrifice Gross Margins To Drive Growth 
A shopper places bags of Hindustan Unilever Ltd. Rin detergent on a shopping cart at a supermarket. (Photographer: Sanjit Das/Bloomberg)

ICICI Securities: HUL - Willingness (Necessity?) To Sacrifice Gross Margins To Drive Growth 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Hindustan Unilever Ltd.’s strong double-digit growth in health, hygiene and nutrition portfolio in Q2 FY21 was good (overall volumes up 1%).

There appears a willingness (necessity?) to sacrifice gross margins to drive growth, in our view.

Trade loading of winter season products is delayed a tad (an industry-wide phenomenon, as per management).

We like:

  1. investments to repurpose its brands,
  2. increase in consumer-relevant innovation intensity for hygiene related products (and more),
  3. increase in outlet coverage (back to pre-Covid levels) and
  4. continuing plans to gain market share in tea from unorganised players by absorbing partial input cost inflation.

Click on the attachment to read the full report:

ICICI Securities HUL Q2FY21 Result Update.pdf

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