Hindustan Unilever Versus Nestle India: ICICI Securities' Analysis

BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.We believe Nestle India Ltd. may potentially outperform Hindustan Unilever Ltd. in long term driven by multiple favorable factors (both extrinsic and intrinsic). In Nestle, we like:Penetration-led volume growth on the back of rural expansion (Nestle India has the lowest rural revenue salience (~20%) among peers).Lower threat from direct-to-consumer brands given the inherent challenges in scaling up in foods category.Opportunity to bring more from global portfolio in true long term (Nestle India operates in just four categories out of seven categories globally).Getting incrementally important for parent (India is outperforming other markets).Better operating margin expansion headroom (Nestle India’s operating margin has been stable in the range of ~20-24%) versus most in staples at near-peak margins.Beneficiary of long-term tailwind of consumer preferring convenience. Nestle India has relatively lower salience from rural areas (20%; one of the lowest in our coverage) compared to HUL which has been a pioneer in driving penetration-led growth in rural areas through smaller packs and brand architecture. We note that rural regions are one of the large drivers of volumes for most of the fmcg companies..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Hindustan Unilever Versus Nestle India: ICICI Securities' Analysis

We believe Nestle India may potentially outperform Hindustan Unilever in long term driven by multiple favourable factors.

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