Hindustan Unilever

India Equity Research | Consumer Goods

December 3, 2018
Company Update Emkay
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CMP Target Price

Horlicks buy provides upsides Rs 1,836

as of (December 3, 2018)
Rs 1,900 (▲)
12 months

Rating Upside
ACCUMULATE (■) 3.5 %

Change in Estimates
 Hindustan Unilever’s big bet on health drinks with GSK acquisition appears positive and
EPS Chg FY19E/FY20E (%) -/-
we estimate EPS accretion of ~6% from the deal. Management’s positive commentary on
category growth and synergy benefit targets can drive more upsides we believe. Target Price change (%) 8.6
Target Period (Months) 12
 HUL believes category offers strong long term growth given low penetration and huge
Previous Reco ACCUMULATE
opportunity for market development and premiumisation. It believes higher distribution
Emkay vs Consensus
reach and innovation capabilities can help leverage these brands significantly.
EPS Estimates
 Managements robust targets from synergy benefits estimated at 800-1000bps makes the FY19E FY20E
deal margin and EPS accretive.
Emkay 28.9 34.3
 We are currently factoring only part of the benefits indicated by the management and Consensus 28.6 33.3
believe Improvement in growth from higher distribution and innovation capabilities can Mean Consensus TP (12M) Rs 1,696
drive more upsides. Maintain Accumulate stance with revised target of Rs1900 (from Stock Details
Rs1750), based on 45x Dec-20 earnings.
Bloomberg Code HUVR IN
Face Value (Rs) 1
 Management positive on category growth and margin accretion: Despite low growth
Shares outstanding (mn) 2,165
in recent past, HUL believes HFD has huge growth potential and can grow at high-single
52 Week H/L 1,840 / 1,241
digit to double-digits. It believes the category offers substantial scope for market
M Cap (Rs bn/USD bn) 3,974 / 56.53
development and premiumiation and will also look at future ready formats.
Daily Avg Volume (nos.) 1,671,941
 HUL’s distribution muscle can drive more upsides to category growth: Management Daily Avg Turnover (US$ mn) 38.6
believes its higher distribution reach (4x of GSK) provides opportunity to increase
penetration (currently at 24%) through low unit packs and unlock potential in North and Shareholding Pattern Sep '18

West. Promoters 67.2%

FIIs 12.1%
 Significant cost savings and synergy benefits make deal EPS accretive: Management
DIIs 7.3%
believes it can target potential net synergy benefit of 800-1000bps of margins from scale
Public and Others 13.4%
efficiencies, network optimization and A&P efficiencies. We note GSK overhead cost
structure at 46% of sales is higher vs peers and that of HUL at 32% of sales and offers Price Performance
room for reduction. (%) 1M 3M 6M 12M

 Expect ~6% EPS accretion; maintain Accumulate stance – We expect the deal to be Absolute 12 8 16 47

EPS accretive to HUL by ~6%, factoring only part of the full synergy benefits indicated by Rel. to Nifty 9 15 13 36

the management. We believe HUL has plenty of levers to drive higher growth led by its Relative price chart
Rs %
higher distribution reach and innovation and market development capabilities which we 1850 40

have not priced in yet. Factoring the upsides from the deal and rolling forward to Dec-19 1730 30

earnings, we increase our target price to Rs1900 (from Rs1750) and maintain our 1610 20

Accumulate stance. 1490 10

1370 0
Financial Snapshot (Standalone)
1250 -10
(Rs mn) FY17 FY18 FY19E FY20E FY21E Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18

Hindustan Unilever (LHS) Rel to Nifty (RHS)

Revenue 318,900 345,250 400,653 458,580 525,698
Source: Bloomberg
EBITDA 60,470 72,760 87,996 104,318 123,323
This report is solely produced by Emkay Global. The
EBITDA Margin (%) 19.0 21.1 22.0 22.7 23.5 following person(s) are responsible for the production
of the recommendation:
APAT 42,930 51,350 62,422 74,253 88,050
EPS (Rs) 19.8 23.7 28.9 34.3 40.7 Ashit Desai
EPS (% chg) 4.3 19.6 21.6 19.0 18.6 ashit.desai@emkayglobal.com
+91-022-66121340
ROE (%) 67.2 75.7 84.4 91.3 97.8
P/E (x) 92.5 77.4 63.6 53.5 45.1 Dhiraj Mistry, CFA
dhiraj.mistry@emkayglobal.com
EV/EBITDA (x) 64.8 53.7 44.3 37.3 31.4
+91-022-66121281
P/BV (x) 61.2 56.1 51.5 46.5 42.0
Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer
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ED: ANISH MATHEW SA: DHANANJAY SINHA

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

Deal specifics
 GSK Consumer will be merged with HUL in an all equity merger. Share swap ration: 4.39
shares of HUL for 1 share each of GSK Consumer (valuing GSK at Rs317bn). Deal is
anticipated to be completed in a year
 Brands owned by GSK India (Boost, Viva and Maltova) to be retained by merged entity.
Unilever to acquire Horlicks brand in India and international markets (including group
companies) currently owned by GSK Plc.
 HUL will distribute GSK’s OTC and oral health products under a consignment selling
agreements for 5 years.
 Unilever paid cash of BDT16.4 billion (£150 million) for GSK’s 82% stake in GSK
Bangladesh Limited; and cash of EUR470 million (£416 million) for the sale of brand rights
and GSK’s consumer healthcare nutrition activities in certain other territories.

Ownership post-merger
 GSK Plc (including Group Companies) to own 5.7% of merged entity
 Unilever shareholding in merged entity will be 61.9% vs. 67.2% prior to the merger

Management call highlights

Growth outlook
 Management optimistic on the category growth and the long term opportunities it offers.
 As per consumer studies the HFD category is expected to grow at high single-digit to
double-digit and HUL will grow in double digit
 Looking at future ready formats to drive growth, which already has healthy pipeline
available
 Will look at opportunities to increase penetration; HUL has a direct reach of 4x vs. GSK
Consumer.
 Category also offers strong potential of market development and premiumisation. Super
premium products are less than 20% of the market and growing at high double digit.

Margins and synergies

 Management expects transaction to be margin and EPS accretive; expect transaction to
be completed by Dec 2019.
 Management highlighted synergy benefits of 800-1000bps on a net level over the medium
term; while gross savings could be higher some of which could be re-invested.
 Big saving is will be from scale efficiencies and network optimization. Savings is also
expected from material management, common IT, media buying and promotions.

OTC business
 HUL will continue to distribute GSK’s OTC and Oral Health care products for 5 years. There
would be some changes in agreement (vs GSK Consumer), however, net margins will be
similar to GSK Consumer had.
 HUL presence in chemist should get a boost which it believes is under leveraged in beauty
and personal care.

Royalty on Horlicks: HUL will have to be pay royalty to Unilever as per SEBI guidelines
(currently GSK pays royalty in range of 1.8% to 4.5% across Horlicks variants).

R&D capabilities of GSK Consumer was largely support from India. HUL will complement its
local and global R&D capabilities in F&R for product development.

As per management, Unilever does not have a call option on GSK stake; GSK can sell the stake
anytime post the transaction is completed.

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 2

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

Exhibit 1: Estimates of merged entity

HUL GSK Merged entity
FY20e FY21e FY20e FY21e FY20e FY21e
Revenue (Rs mn) 458,580 525,698 54,743 61,173 513,323 586,870
Revenue growth (%) 14.5 14.6 12.0 11.7 14.2 14.3
EBITDA (Rs mn) 104,318 123,323 11,845 13,329 116,163 136,652
EBITDA Margin (%) 22.7 23.5 21.6 21.8 22.6 23.3
Synergy benefit (Rs mn) 3,000 4,000
EBITDA est post synergy benefits (Rs mn) 119,163 140,652
EBITDA margin incl synergy benefits (%) 23.2 24.0
PAT (Rs mn) 74,253 88,050 9,638 10,908 85,478 101,113
Outstanding shares (mn) 2,164 2,164 2,348 2,348
EPS of merged entity (Rs) 34.3 40.7 36.4 43.1
EPS accretion (%) 6.1% 5.8%
Source: Company, Emkay Research

Exhibit 2: Category growth is expected to be high single-digit Exhibit 3: HUL distribution reach is 4x of GSK Consumer
9 8.0
Total distribution reach (in mn)
8
7
6
5
4
3
1.8
2
1
0
GSK Consumer HUL

Source: Company, Emkay Research Source: Company, Emkay Research

Exhibit 4: Potential synergy benefits from the merger Exhibit 5: Despite GSK Consumer’s higher gross margin, EBITDA
margin is lower due to higher overheads
% of sales GSK Consumer HUL
Gross margin 67% 53%
Employee cost 12% 5%
A&P spends 13% 12%
Freight 5% 4%
Other expenditure 17% 11%
EBITDA margin 20% 21%
Source: Company, Emkay Research

Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 3

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

Key Financials (Standalone)

Income Statement
Y/E Mar (Rs mn) FY17 FY18 FY19E FY20E FY21E
Revenue 318,900 345,250 400,653 458,580 525,698
Expenditure 258,430 272,490 312,658 354,262 402,375
EBITDA 60,470 72,760 87,996 104,318 123,323
Depreciation 3,960 4,780 5,121 5,523 5,948
EBIT 56,510 67,980 82,875 98,795 117,375
Other Income 5,260 5,690 6,549 7,532 8,661
Interest expenses 220 200 250 250 250
PBT 61,550 73,470 89,174 106,076 125,786
Tax 18,620 22,120 26,752 31,823 37,736
Extraordinary Items 2,850 (2,260) 0 0 0
Minority Int./Income from Assoc. 0 0 0 0 0
Reported Net Income 45,780 49,090 62,422 74,253 88,050
Adjusted PAT 42,930 51,350 62,422 74,253 88,050

Balance Sheet
Y/E Mar (Rs mn) FY17 FY18 FY19E FY20E FY21E
Equity share capital 2,160 2,160 2,160 2,160 2,160
Reserves & surplus 62,740 68,590 74,991 83,306 92,436
Net worth 64,900 70,750 77,151 85,466 94,596
Minority Interest 0 0 0 0 0
Loan Funds 0 0 0 0 0
Net deferred tax liability 1,360 (3,100) (3,100) (3,100) (3,100)
Total Liabilities 66,260 67,650 74,051 82,366 91,496
Net block 40,240 41,420 40,829 39,706 38,457
Investment 37,790 31,090 31,090 31,090 31,090
Current Assets 65,850 87,740 101,485 123,578 148,448
Cash & bank balance 16,710 33,730 41,211 54,830 69,913
Other Current Assets 6,220 6,540 7,444 8,482 9,680
Current liabilities & Provision 79,650 96,900 103,853 116,508 130,999
Net current assets (13,800) (9,160) (2,368) 7,070 17,449
Misc. exp 0 0 0 0 0
Total Assets 66,260 67,650 74,051 82,366 91,496

Cash Flow
Y/E Mar (Rs mn) FY17 FY18 FY19E FY20E FY21E
PBT (Ex-Other income) (NI+Dep) 56,290 67,780 82,625 98,545 117,125
Other Non-Cash items 0 0 0 0 0
Chg in working cap 6,270 7,920 689 4,181 4,704
Operating Cashflow 55,350 65,270 68,482 84,207 98,952
Capital expenditure (13,230) (8,230) (4,730) (4,400) (4,700)
Free Cash Flow 42,120 57,040 63,752 79,807 94,252
Investments (9,990) 6,700 0 0 0
Other Investing Cash Flow (5,260) (5,690) (6,549) (7,532) (8,661)
Investing Cashflow (23,220) (1,530) (4,730) (4,400) (4,700)
Equity Capital Raised 0 0 0 0 0
Loans Taken / (Repaid) 0 0 0 0 0
Dividend paid (incl tax) (42,640) (51,770) (56,021) (65,939) (78,920)
Other Financing Cash Flow (150) 5,250 0 0 0
Financing Cashflow (43,010) (46,720) (56,271) (66,189) (79,170)
Net chg in cash (10,880) 17,020 7,481 13,619 15,083
Opening cash position 27,590 16,710 33,730 41,211 54,830
Closing cash position 16,710 33,730 41,211 54,830 69,913
Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 4

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

Key Ratios
Profitability (%) FY17 FY18 FY19E FY20E FY21E
EBITDA Margin 19.0 21.1 22.0 22.7 23.5
EBIT Margin 17.7 19.7 20.7 21.5 22.3
Effective Tax Rate 30.3 30.1 30.0 30.0 30.0
Net Margin 13.5 14.9 15.6 16.2 16.7
ROCE 95.5 110.0 126.2 136.0 145.0
ROE 67.2 75.7 84.4 91.3 97.8
RoIC 835.9 1,646.0 (3,927.4) (1,828.8) (1,064.1)

Per Share Data (Rs) FY17 FY18 FY19E FY20E FY21E

EPS 19.8 23.7 28.9 34.3 40.7
CEPS 21.7 25.9 31.2 36.9 43.4
BVPS 30.0 32.7 35.7 39.5 43.7
DPS 16.5 20.0 22.0 26.0 32.0

Valuations (x) FY17 FY18 FY19E FY20E FY21E

PER 92.5 77.4 63.6 53.5 45.1
P/CEPS 77.3 64.6 53.7 45.5 38.6
P/BV 61.2 56.1 51.5 46.5 42.0
EV / Sales 12.5 11.5 9.9 8.6 7.5
EV / EBITDA 64.8 53.7 44.3 37.3 31.4
Dividend Yield (%) 0.9 1.1 1.2 1.4 1.7

Gearing Ratio (x) FY17 FY18 FY19E FY20E FY21E

Net Debt/ Equity (0.8) (0.9) (0.9) (1.0) (1.0)
Net Debt/EBIDTA (0.9) (0.9) (0.8) (0.8) (0.8)
Working Cap Cycle (days) (34.9) (45.3) (39.7) (38.0) (36.4)

Growth (%) FY17 FY18 FY19E FY20E FY21E

Revenue 2.7 8.3 16.0 14.5 14.6
EBITDA 5.2 20.3 20.9 18.5 18.2
EBIT 4.1 20.3 21.9 19.2 18.8
PAT 13.5 7.2 27.2 19.0 18.6

Quarterly (Rs mn) Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19

Revenue 83,090 85,900 90,970 94,870 92,340
EBITDA 16,820 16,800 20,480 22,510 20,190
EBITDA Margin (%) 20.2 19.6 22.5 23.7 21.9
PAT 12,760 13,260 13,510 15,290 15,250
EPS (Rs) 5.9 6.1 6.2 7.1 7.0
Source: Company, Emkay Research

Shareholding Pattern (%) Sep-17 Dec-17 Mar-18 Jun-18 Sep-18

Promoters 67.2 67.2 67.2 67.2 67.2
FIIs 13.3 12.9 12.6 12.2 12.1
DIIs 5.8 6.3 6.9 7.3 7.3
Public and Others 13.7 13.6 13.4 13.4 13.4
Source: Capitaline

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 5

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

RECOMMENDATION HISTORY TABLE RECOMMENDATION HISTORY CHART

Closing Period
Date TP Rating Analyst BUY Hold Sell
Price (months) Accumulate Reduce Price
Target Price
12-Oct-18 1,570 1,750 12m Accumulate Ashit Desai 1800
16-Jul-18 1,751 1,750 12m Accumulate Ashit Desai
1592
14-May-18 1,504 1,620 12m Accumulate Ashit Desai
1384
25-Oct-17 1,272 1,480 12m Accumulate Amit Purohit
1176
18-Jul-17 1,158 1,250 12m Accumulate Amit Purohit
18-May-17 990 1,100 12m Accumulate Amit Purohit 968

27-Mar-17 899 950 12m Accumulate Amit Purohit 760

05-Dec-15

03-Dec-16

02-Dec-17

01-Dec-18
04-Jun-16

03-Jun-17

02-Jun-18
23-Jan-17 862 950 12m Accumulate Amit Purohit
26-Oct-16 843 1,000 12m Accumulate Amit Purohit
22-Sep-16 910 1,032 12m Accumulate Amit Purohit Source: Bloomberg, Company, Emkay Research
19-Jul-16 895 904 12m Hold Amit Purohit
10-May-16 862 815 12m Hold Prashant Kutty
18-Jan-16 810 805 12m Hold Prashant Kutty
Source: Company, Emkay Research

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 6

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

Emkay Rating Distribution

BUY Expected total return (%) (Stock price appreciation and dividend yield) of over 25% within the next 12-18 months.
ACCUMULATE Expected total return (%) (Stock price appreciation and dividend yield) of over 10% within the next 12-18 months.
HOLD Expected total return (%) (Stock price appreciation and dividend yield) of upto 10% within the next 12-18 months.
REDUCE Expected total return (%) (Stock price depreciation) of upto (-) 10% within the next 12-18 months.
SELL The stock is believed to underperform the broad market indices or its related universe within the next 12-18 months.

Completed Date: 04 Dec 2018 01:26:09 (SGT)

Dissemination Date: 04 Dec 2018 01:27:09 (SGT)

Sources for all charts and tables are Emkay Research unless otherwise specified.

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ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 7

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

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general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and
the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the
exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever
for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or
further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any
securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities
mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or
seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or
risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent
with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice,
its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies)
referred to in this report and the DBS Group is under no obligation to update the information in this report. This publication has not been reviewed or
authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication
relating to any issuer.

The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and
assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the
valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results.
Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as
a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions,
estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or
events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Please contact the primary
analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that
refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as
recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.

DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering
of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-
making.

ANALYST CERTIFICATION BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL)

The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and
their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is,
or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible of the
content of this research report, in part or in whole, certifies that he or his associate 1 does not serve as an officer, director or employee of the issuer or the
new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment
trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the
new listing applicant). The research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2
in relation to an issuer or a new listing applicant that the analyst reviews. EGFSL has procedures in place to eliminate, avoid and manage any potential
conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as
part of a separate and independent team to the investment banking function of the EGFSL and procedures are in place to ensure that confidential
information held by either the research or investment banking function is handled appropriately. There is no direct link of EGFSL compensation to any
specific investment banking function of the EGFSL.

1
An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse,
minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions
or instructions of the analyst.
2
Financial interest is defined as interest that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or
financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at the
arm’s length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in
securities in respect of an issuer or a new listing applicant.

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 8

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

COMPANY-SPECIFIC / REGULATORY DISCLOSURES BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL):

Disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014
with reference to the subject company(s) covered in this report-:

1. EGFSL, its subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of December 3,
2018
2. EGFSL, and/or Research Analyst does not market make in equity securities of the issuer(s) or company(ies) mentioned in this Research Report
Disclosure of previous investment recommendation produced:
3. EGFSL may have published other investment recommendations in respect of the same securities / instruments recommended in this research
report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment
recommendations published by EGFSL in the preceding 12 months.
4. EGFSL , its subsidiaries and/or other affiliates and Research Analyst or his/her relative’s does not have any material conflict of interest in the
securities recommended in this report as of December 3, 2018.
5. EGFSL, its subsidiaries and/or other affiliates and Research Analyst or his/her relative’s does not have actual/beneficial ownership of 1% or more
securities of the subject company at the end of the month immediately preceding the December 3, 2018
6. EGFSL, its subsidiaries and/or other affiliates and Research Analyst have not received any compensation in whatever form including
compensation for investment banking or merchant banking or brokerage services or for products or services other than investment banking or
merchant banking or brokerage services from securities recommended in this report (subject company) in the past 12 months.
7. EGFSL, its subsidiaries and/or other affiliates and/or and Research Analyst have not received any compensation or other benefits from securities
recommended in this report (subject company) or third party in connection with the research report.
8. Securities recommended in this report (Subject Company) has not been client of EGFSL, its subsidiaries and/or other affiliates and/or and
Research Analyst during twelve months preceding the December 3, 2018

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018 | 9

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

COMPANY-SPECIFIC / REGULATORY DISCLOSURES BY DBS BANK LTD AS DISTRIBUTOR OF THE RESEARCH REPORT
1. DBS Bank Ltd., DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”) or their subsidiaries and/or other affiliates do not have a proprietary
position in the securities recommended in this report as of 30 Apr 2018.

2. Neither DBS Bank Ltd nor DBS HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

Compensation for investment banking services:

3. DBSVUSA, does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager
or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including
any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA
exclusively.

Disclosure of previous investment recommendation produced:

4. DBS Bank Ltd. DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), their subsidiaries and/or other affiliates may have published other investment
recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact
the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd. DBS Vickers Securities
(Singapore) Pte Ltd (“DBSVS”), their subsidiaries and/or other affiliates in the preceding 12 months.

RESTRICTIONS ON DISTRIBUTION
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or
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This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 16800306E) or DBSVS (Company Regn. No.
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Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities,
Singapore
affiliates or other foreign research houses pursuant to an agreement under Regulation 32C of the financial Advisers
Regulations. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with
the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.
This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised
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In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and
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This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at units 608-610, 6th Floor, Gate
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Financial Centre
Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for
professional clients (as defined in the DFSA rulebook) and no other person may act upon it.
This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined
in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes
only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any
financial product. It does not constitute a personal recommendation or take into account the particular investment objectives,
United Arab Emirates
financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you
need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this
report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion
thereof may not be reprinted, sold or redistributed without our written consent.
DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research
analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule
2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities
United States held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for
its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to
such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report
who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.
In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
Other jurisdictions
professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Emkay Global Financial Services Ltd.

CIN - L67120MH1995PLC084899
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018| 10

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

SINGAPORE
DBS Bank Ltd
Contact: Janice Chua
12 Marina Boulevard, Marina Bay Financial Centre Tower 3
Singapore 018982
Tel. 65-6878 8888
Fax: 65 65353 418
e-mail: equityresearch@dbs.com
Company Regn. No. 196800306E

THAILAND
DBS Vickers Securities (Thailand) Co Ltd
Contact: Chanpen Sirithanarattanakul
989 Siam Piwat Tower Building,
9th, 14th-15th Floor
Rama 1 Road, Pathumwan,
Nagkok Thailand 10330
Tel. 66 2 857 7831
Fax: 66 2 658 1269
e-mail: research@th.dbs.com
Company Regn. No 0105539127012
Securities and Exchange Commission, Thailand

INDONESIA
PT DBS Vickers Sekuritas (Indonesia)
Contact: Maynard Priajaya Arif
DBS Bank Tower
Ciputra World 1, 32/F
JI. Prof. Dr. Satrio Kav. 3-5
Jakarta 12940, Indonesia
Tel. 62 21 3003 4900
Fax: 62 21 3003 4943
e-mail: research@id.dbsvickers.com

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018| 11

 Hindustan Unilever (HUVR IN) India Equity Research | Company Update

Ashit Desai, PGDM, FRM

ashit.desai@emkayglobal.com
+91-022-66121340

Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,its respective connected and associated corporations and affiliates are the distributors of the research reports, please refer to the
last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors,Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore

ED: ANISH MATHEW SA: DHANANJAY SINHA December 3, 2018| 12