Valuations are questionable…yes. But the thing with HUL is that they always remain stretched.
This is not a genuine excuse. I admit.
However, if one is ready to accept no returns ( a theoretical scenario ) …say till Mar 21, EPS should be in the range of Rs 40 per share( this includes the GSK kick ).
Now at Rs 40 EPS and Mkt price of Rs 2000, its an earning yeild of 2%. ( this EPS will decide the mkt price of stock ) .Plus u can safely assume an annual dividend payout of say Rs 30 per share for FY ending 21(thats about 1.5% additional return ) …from hereon, both the EPS and DPS should march northwards.
HUL dominates the most promising and profitable Indian Industry- FMCG…that too by a wide margin. There is no one who is even close. Be it soaps, detergents, dishwashing, shampoos, soups, Ketchups, Tea, Coffee, Makeup, Body lotions , face creams etc etc etc.
HUL IN INDIA IS IN AN UNPRECEDENTED SITUATION.
ITS DOMINANCE OF INDIAN FMCG INDUSTRY HAS NO PARALLELS IN THE ENTIRE WORLD.
THAT’S SOME FEAT. THAT’S WHY THE TOP DOLLARS.
Finally, the beauty is in the eye of the beholder.
Regards,
Ranvir Dehal