INSTITUTIONAL EQUITY RESEARCH

Page | 1 | PHILLIPCAPITAL INDIA RESEARCH Please see penultimate page for additional important disclosures. PhillipCapital (India) Private Limited. (“PHILLIPCAP”) is a foreign broker-dealer unregistered in the USA. PHILLIPCAP research is prepared by research analysts who are not registered in the USA. PHILLIPCAP research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities Inc, an SEC registered and FINRA-member broker-dealer.

Hindustan Unilever Ltd (HUVR IN)

All Hands on deck

INDIA | FMCG | Quarterly Update

29 April 2021

Top takeaways from 4QFY21 HUL’s organic volume growth of 16% was better than expectations of 11%. Domestic

business (ex- Horlicks and VWASH) grew 21% yoy; however, accounting for integration of GSK consumer, revenue was up 31% YoY. Management highlighted demand environment improved sequentially with rural continuing to grow faster than urban led , higher MSP, better rabi crop harvest and reverse migration. However, mgmt expects rural areas to do better in FY22 as well if covid does not spread too much into hinterlands. On the silver lining, management highlighted it has more agile and prepared to handle disruption emerging out of 2nd Covid wave vs earlier lockdown in April-20. It is in better position vs peer companies to handle supply chain challenges, as it has following weapons within its armoury (a) Shikar app – helps to serve GT demand digitally (b) Shakti amma (rural entrepreneurs) – which shall aid in serving rural remand effectively and (c) Increased chemist coverage (owing to GSK Integration) – which has enable to fulfil consumer demand in better manner in wake of restricted working hours of General Trade in urban areas

Health, Hygiene and nutrition portfolio (80% of sales) grew 22% yoy, while out of home (5% of sales) grew 69% YoY owing to favourable base and discretionary personal care portfolio (c15% of sales) saw 10% revenue growth, after three consecutive qtrs of subdued performance. We believe Out of home / discretionary portfolio (20% of business) is likely to face headwinds in 1HFY22 owing to severe intensity of Covid-19; however impact will be far lesser than 1HFY21, as govt has not gone for Pan-India lockdown. Moreover, we expect growth rate in home and hygiene (particularly skin cleansing space) to pick –up meaningfully in FY22 as lot of opportunistic fringe players have vacated this segment and consumer taking extra precaution, given 2nd covid wave being more fatal. Nutrition (GSK business) portfolio saw volume led double digit revenue growth as it launched Rs 2 SKU –which enabled to increased penetration , strong traction seen in pouch packs and re-launch of its adult nutrition range

Gross margin declined c125bps YoY despite healthy recovery seen in high-margin personal care and uptick in premiumization trends in home care segment owing to inflationary pressure seen in PFAD, SMP and Tea and inferior product mix within core portfolio on account of down-trading. However, Ebitda margins expanded c150bps to 24.8% owing to tight lid on operating costs (up only 18% YoY), operating leverage and optimum utilization of ad budgets. Mgmt expects gross margin headwinds to sustain in short term due to higher RM inflation and inferior product mix. However, it is following approach of calibrated price hikes for soaps (have taken cumulative price hike of 7-8%) and Tea portfolio (15-20% price hike taken on blended basis) in order to mitigate RM pressure. Adjusted income grew 44% YoY, in line with Ebitda growth

All Hands on deck ; maintain BUY : We believe HUL has right matrix to sail through such challenging times – (1) Broad product portfolio (2) Focus on premiumization through LUPs, (3) improving distribution means through digital means. We maintain High-conviction BUY with a target of Rs 2,800 (60x Sept -23 EPS) on back of TINA and further strengthening of competitive positioning. Key risks: 1) Intensification of Covid-19 2) Higher than expected commodity inflation (Rs mn) 4QFY21 4QFY20 YoY% 3QFY21 QoQ%

Net Sales 1,19,470 88,850 34.5 1,16,820 2.3

EBITDA 29,570 20,650 43.2 28,540 3.6

Adj PAT 21,030 14,640 43.6 19,510 7.8

BUY (Maintain) CMP Rs 2,407 TARGET Rs 2800 (16%)

COMPANY DATA

O/S SHARES (MN) : 2350

MARKET CAP (RSBN) : 5658

MARKET CAP (USDBN) : 75.5

52 - WK HI/LO (RS) : 2505 / 1902

LIQUIDITY 3M (USDMN) : 79.2

PAR VALUE (RS) : 1

SHARE HOLDING PATTERN, %

Mar 21 Dec 20 Sep 20

PROMOTERS 61.9 61.9 61.9

DII 10.7 10.7 10.8

FII 14.9 14.9 14.5

OTHERS 12.5 12.5 12.7

KEY FINANCIALS

Rs mn FY21E FY22E FY23E FY24E

Net Sales 4,53,110 5,18,358 5,82,375 6,54,298

EBIDTA 1,13,240 1,31,751 1,49,145 1,70,623

Net Profit 79,540 92,028 1,04,359 1,19,798

EPS, Rs 33.9 39.2 44.4 51.0

PER, x 69.6 61.9 54.6 47.6

EV/EBIDTA, x 49.4 42.2 37.1 32.2

P/BV, x 12.2 11.8 11.3 10.7

ROE, % 17.5 19.0 20.6 22.5

Vishal Gutka, Research Analyst (+ 9122 6246 4118) vgutka@phillipcapital.in

Page | 2 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

HUL stock has underperformed benchmark indices post GSK Plc stake sale owing to following concerns and we believe majority of the concerns are likely to abate over a period of time and maintain High conviction BUY with TP of Rs 2800 (60x Sept-FY23 EPS)

1) Hyperinflation in tea/ Palm oil prices: HUL has taken a cumulative price hike of 15-20% (with most recent of c10% being in October, 2020) since April,2020 in order to combat hyperinflation in tea. We believe HUL has deployed right strategy as in near term; it could be margin dilutive but will help in market share gains via shift from unbranded to branded. Similarly, it has taken blended cumulative price hike of 7-8% (although requirement is of 10-12%) during 2HFY21 in soap segment, in order to give more power to market share gain story

2) Integration of GSK consumer – Delayed, not denied: We believe integration of GSK Consumer distribution infra has been delayed via couple of quarters owing to covid-19 pandemic. Mgmt highlighted SAP integration has been completed in 4QFY21 and customer development/ sales related software likely to get done in 2QFY22. In our view, HUL will reap meaningful benefit distribution synergies once integration is complete

3) Revival of personal care / Out of home consumption portfolio: We believe, this might be long haul for HUL, as consumer might defer discretionary / personal care portfolio in wake of low intensity social / marriage functions. Out of home consumption categories might also suffer until economy fully unlocks. However, we expect both the categories to see faster than expected revival owing to commencement of vaccination programme in FY22 and partial lockdown situation, which increases mobility factor –essential for uptick in personal care range

4) Premium detergent portfolio to come back in full force in FY22 : Our ground checks suggest detergent portfolio, which was most impacted in FY21 due to lack of mobility shall come back in full force in FY22, as economy unlocks. Moreover, Premium detergent and large SKU which had faced major brunt owing to ramping down of Modern Trade operations in 1HFY21, shall see meaningful revival as modern trade outlets resort to normalcy. Notably, in 4QFY21 itself, home care segment saw 15% revenue growth on back of improved growth rates in premium products (Liquid and sensorial)

5) Struggling brands within Skin cleansing portfolio have found growth vectors: Lifebuoy and Lux, both the brands which have been on a steady decline in terms of market share, have found new growth vectors respectively to revive growth. COVID -19 pandemic has provided required tailwinds to Lifebuoy, which is one of the strongest brand operating in health segment. Moreover strategic interventions (improving quality, communication strategy and product positioning ) done for Lux brand which should enable it to regain its lost glory to some extent

6) Oral Care on steady wicket: Oral Care is seeing health growth since past few quarters owing to recovery in Close-up brand (Largest brand within freshness segment). Mgmt has a strategy in mind to revive growth of Pepsodent, which is flagging brand

Page | 3 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

Financial snapshot

Rs mn 4QFY20 4QFY21 % YoY Comment

Volume gr (%) -7.0 16.0 Strong volume growth due to 4/5

th of business grew in double-digits

Net Sales 88,850 1,19,470 34.5%

Other operating income 1,260 1,850 46.8%

Total Expenses (69,460) (91,750) 32.1%

EBITDA 20,650 29,570 43.2% Expanded despite gross margin pressure on back of broad based

performance across key segments, tight lid on operating costs and

effectively utilizing ad budgets

EBITDA margin (%) 23.2 24.8 151bps

Interest (260) (90) -65.4%

Depreciation (2,550) (2,490) -2.4%

Other income 2,660 1,090 -59.0%

PBT 20,500 28,080 37.0%

Tax (4,730) (6,790) 43.6%

Tax rate (%) 23.1 24.2 111bps

Exceptional Items (580) 140

Reported PAT 15,190 21,430 41.1%

Adj. PAT 14,640 21,030 43.6%

In line with EBITDA growth despite of lower income on back of lower

interest

EPS 6.8 9.7 43.6%

Cost Details 4QFY20 4QFY21 % YoY

Raw Materials 41,700 57,560 38.0%

As % of Sales 46.9 48.2 125bps

Staff costs 3,550 5,220 47.0%

As % of Sales 4.0 4.4 37bps

Advertising expense 11,640 14,130 21.4%

As % of Sales 13.1 11.8 -127bps

Other expenses 12,570 14,840 18.1%

As % of Sales 14.1 12.4 -173bps

Gross profit 47,150 61,910 31.3% Owing to inflationary pressure in tea /palm oil (up 18/43% YoY

respectively). Gross margin 53.1 51.8 -125bps

Source Company, PhillipCapital India Research

Page | 4 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

Segment operating performance

Rs mn 4QFY20 4QFY21 YoY (%)

Segmental Revenue (Rs mn)

Home Care 33,500 38,400 14.6%

Personal Care 38,010 45,490 19.7%

Foods & Refreshments 17,880 35,110 96.4%

Others 720 2,320 222.2%

Total 90,110 1,21,320 34.6%

Segment EBIT (Rs mn)

Home Care 6,360 8,120 27.7%

Personal Care 9,450 12,520 32.5%

Foods & Refreshments 2,250 5,750 155.6%

Others 40 690 1625.0%

Total 18,100 27,080 49.6%

Segment EBIT margins (%)

Home Care 19.0 21.1 216bps

Personal Care 24.9 27.5 266bps

Foods & Refreshments 12.6 16.4 379bps

Others 5.6 29.7 2419bps

EBIT Margins 20.1 22.3 223bps

Source: Company, PhillipCapital India Research

Robust performance across all category led to increase volume

Strong growth in skin & Foods and nutrition business

Source: Company, PhillipCapital India Research

7.0 5.0 5.0 5.0

-7.0 -8.0

1.0

4.0

16.0

-10

-5

0

5

10

15

20Volume (%)

21.1 17.7

19.7

41.0

2.7

(8.9)

13.9

2.7

27.7

-20

-10

0

10

20

30

40

50 Home care - Ebit gr (%)

8.3 12.8

15.6

7.5

(22.5)

(16.5)

1.0

12.9

32.5

-28-24-20-16-12

-8-4048

12162024283236

Beauty & Personal - Ebit gr (%)

20.1 15.5

(0.3)

28.0

(35.0)

53.6

90.1

41.6

155.6

-50

0

50

100

150

200 Food & Refreshment - Ebit gr (%)

Page | 5 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

Con call highlights

Homecare (30% of revenues; 27% of EBIT):

Homecare segment bounced back with 15% after seeing four consecutive qtr of subdued growth, as economy unlocked and calibrated price hikes undertaken in past 6 months. Mgmt highlighted high margin liquids and fabric sensation performed well on back of market development activities.

We believe performance of detergent segment will be key to watch out in maintain our thesis of consistent and gradual improvement in operating margins in medium term, given 2nd covid wave. One should note out of c1000 EBITDA margin expansion over the past decade at company level, 300-400 bps has come from premiumization in detergent segment.

Dishwashing saw fourth consecutive qtr of double digit growth, as work from Home culture continues to persist

Personal care (39% of revenues; 51% of EBIT):

Soap segment saw double digit revenue growth portfolio on back of healthy traction in Lifebuoy and premium brands –which we have been highlighting since past few quarters in our ground view report – The Great Indian soap opera; construct of the category has changed from low-growth, miniscule involvement to high-growth and involvement. Incrementally, mgmt highlighted it plans to take calibrated price hikes (have taken price hike of 7-8% vs 10-12% required) in order to mitigate RM inflation

HUL has set up separate team within Beauty and personal care divison in order to focus upon premium beauty and skin care products, which shall specifically target masstige segment.

Oral care / hair care saw strong growth on back of innovations and contextual communications. Moreover, Skin care portfolio also saw healthy traction on back of extended winter (Vaseline), penetration led gains in Glow and Lovely and decent performance in face wash and talc sub segment.

Foods and refreshment (29% of revenues; 22% of EBIT):

Mainly driven by acquisition of GSK consumer and increased in home consumption of beverages (Tea and coffee), Ketch-ups, soups and Ice –creams.

Ice cream recovered on back of multiple product innovation (Cornetto, Trixy cup and Premium kulfis)

Nutrition business delivered volume led double digit revenue growth on back of (a) launch Rs 2 SKU for Horlicks and Boost –which shall help in recruiting more customers into category (b) making Boost pan – India brand vs predominantly being South India focussed brand (c) Increasing grammage in Rs 5 SKU (d) Premiumization – focussing on “Plus” range and (e) effective marketing of pouch packs, which are cheaper than jars by 20%

Nutrition margin expanded C370bps on YoY basis in FY21, higher than mgmt expectations, but mgmt is re-investing excess margins to improve product quality and distribution expansion

Segmental margins bounced back with expansion of c380bps to 16.4% YoY (after seeing C375bps YOY decline in 3Q21) owing to improved mix and flow –through of price hikes taken in previous qtrs

Others

60,000 Shakti amma (rural enterprenuers) added during FY21

2% sequential price hike at aggregate level

Have added 0.35 mn outlets on Shikhar app and revenue from shikar app has increased 6x

Mgmt believes Nature Protect brand (naturals oriented home care) could inch up significantly in coming years

Page | 6 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

Financials Income Statement Y/E Mar, Rs mn FY21E FY22E FY23E FY24E

Net sales 4,53,110 5,18,358 5,82,375 6,54,298 Growth, % 18 14 12 12 Other operating income 6,850 7,535 8,289 9,117 Total income 4,59,960 5,25,893 5,90,664 6,63,416 Raw material expenses -2,16,770 -2,44,950 -2,71,895 -3,04,522 Employee expenses -22,290 -24,965 -27,461 -30,207 Other Operating expenses -1,07,660 -1,24,227 -1,42,163 -1,58,063 EBITDA (Core) 1,13,240 1,31,751 1,49,145 1,70,623 Growth, % 18.0 16.3 13.2 14.4 Margin, % 25.0 25.4 25.6 26.1 Depreciation -10,120 -11,844 -13,302 -14,759 EBIT 1,03,120 1,19,907 1,35,843 1,55,864 Growth, % 19.0 16.3 13.3 14.7 Margin, % 22.8 23.1 23.3 23.8 Interest paid -1,080 -1,188 -1,307 -1,437 Other Income 5,130 5,643 6,489 7,463 Non-recurring Items -2,270 0 0 0 Pre-tax profit 1,04,900 1,24,362 1,41,026 1,61,890 Tax provided -25,360 -32,334 -36,667 -42,091 Profit after tax 79,540 92,028 1,04,359 1,19,798 Growth, % 18.0 12.5 13.4 14.8 Net Profit (adjusted) 79,540 92,028 1,04,359 1,19,798 Unadj. shares (m) 2,349 2,349 2,349 2,349 Wtd avg shares (m) 2,349 2,349 2,349 2,349

Balance Sheet Y/E Mar, Rs mn FY21E FY22E FY23E FY24E

Cash & bank 91,897 1,18,881 1,52,431 1,92,256 Marketable securities at cost 12,480 12,480 12,480 12,480 Debtors 12,383 14,167 15,916 17,882 Inventory 29,794 34,084 38,293 43,022 Other current assets 19,610 19,610 19,610 19,610 Total current assets 1,66,164 1,99,222 2,38,730 2,85,250 Investments 20 20 20 20 Gross fixed assets 4,30,678 4,41,678 4,52,678 4,63,678 Less: Depreciation -33,310 -45,154 -58,456 -73,215 Add: Capital WIP 5,130 5,130 5,130 5,130 Net fixed assets 4,02,498 4,01,654 3,99,352 3,95,593 Non-current assets 5,960 5,960 5,960 5,960 Total assets 5,89,912 6,22,126 6,59,332 7,02,093

Current liabilities 98,415 1,11,741 1,24,817 1,39,506 Provisions 14,183 16,225 18,229 20,480 Total current liabilities 1,12,598 1,27,967 1,43,046 1,59,987 Non-current liabilities 10,203 10,203 10,203 10,203 Total liabilities 1,22,801 1,38,170 1,53,249 1,70,190 Paid-up capital 2,345 2,345 2,345 2,345 Reserves & surplus 4,64,767 4,81,611 5,03,739 5,29,559 Shareholders’ equity 4,67,111 4,83,956 5,06,084 5,31,903 Total equity & liabilities 5,89,912 6,22,126 6,59,332 7,02,093

Source: Company, PhillipCapital India Research Estimates

Cash Flow Y/E Mar, Rs mn FY21E FY22E FY23E FY24E

Pre-tax profit 1,04,900 1,24,362 1,41,026 1,61,890 Depreciation 10,120 11,844 13,302 14,759 Chg in working capital 1,734 9,295 9,120 10,246 Total tax paid -25,360 -32,334 -36,667 -42,091 Other operating activities 9,487 0 0 0 Cash flow from operating activities 1,00,881 1,13,167 1,26,781 1,44,804 Capital expenditure -3,56,928 -11,000 -11,000 -11,000 Chg in marketable securities 0 0 0 0 Other investing activities 2,60,670 0 0 0 Cash flow from investing activities -96,258 -11,000 -11,000 -11,000 Free cash flow 4,623 1,02,167 1,15,781 1,33,804 Equity raised/(repaid) 4,02,415 0 0 0 Dividend (incl. tax) -95,153 -75,183 -82,231 -93,979 Other financing activities -3,17,157 0 0 0 Cash flow from financing activities -9,896 -75,183 -82,231 -93,979 Net chg in cash -5,273 26,984 33,549 39,825

Valuation Ratios

FY21E FY22E FY23E FY24E

Per Share data EPS (INR) 33.9 39.2 44.4 51.0

Growth, % 8.5 12.5 13.4 14.8 Book NAV/share (INR) 198.8 206.0 215.4 226.4 FDEPS (INR) 34.8 39.2 44.4 51.0 CEPS (INR) 40.1 44.2 50.1 57.3 CFPS (INR) 36.7 45.8 51.2 58.5 DPS (INR) 40.5 32.0 35.0 40.0 Return ratios

Return on assets (%) 20.5 15.4 16.5 17.8 Return on equity (%) 17.5 19.0 20.6 22.5 Return on capital employed (%) 27.0 18.6 20.2 22.1 Turnover ratios

Asset turnover (x) 2.4 1.4 1.6 1.9 Sales/Total assets (x) 1.2 0.9 0.9 1.0 Sales/Net FA (x) 2.0 1.3 1.5 1.6 Working capital/Sales (x) (0.1) (0.1) (0.1) (0.1) Receivable days 10.0 10.0 10.0 10.0 Inventory days 24.0 24.0 24.0 24.0 Payable days 92.2 92.8 93.1 93.7 Working capital days (29.5) (30.9) (32.0) (32.9) Liquidity ratios Current ratio (x) 1.7 1.8 1.9 2.0 Quick ratio (x) 1.4 1.5 1.6 1.7 Interest cover (x) 95.5 100.9 104.0 108.4 Net debt/Equity (%) (19.7) (24.6) (30.1) (36.1) Valuation PER (x) 69.6 61.9 54.6 47.6 PEG (x) - y-o-y growth 8.2 5.0 4.1 3.2 Price/Book (x) 12.2 11.8 11.3 10.7 EV/Net sales (x) 12.3 10.7 9.5 8.4 EV/EBITDA (x) 49.4 42.2 37.1 32.2 EV/EBIT (x) 54.2 46.4 40.7 35.2

Page | 7 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

Stock Price, Price Target and Rating History

Rating Methodology We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one year. We have different threshold for large market capitalisation stock and Mid/small market capitalisation stock. The categorisation of stock based on market capitalisation is as per the SEBI requirement.

Large cap stocks Rating Criteria Definition

BUY >= +10% Target price is equal to or more than 10% of current market price

NEUTRAL -10% > to < +10% Target price is less than +10% but more than -10%

SELL <= -10% Target price is less than or equal to -10%.

Mid cap and Small cap stocks Rating Criteria Definition

BUY >= +15% Target price is equal to or more than 15% of current market price

NEUTRAL -15% > to < +15% Target price is less than +15% but more than -15%

SELL <= -15% Target price is less than or equal to -15%.

Disclosures and Disclaimers PhillipCapital (India) Pvt. Ltd. has three independent equity research groups: Institutional Equities, Institutional Equity Derivatives, and Private Client Group. This report has been prepared by Institutional Equities Group. The views and opinions expressed in this document may, may not match, or may be contrary at times with the views, estimates, rating, and target price of the other equity research groups of PhillipCapital (India) Pvt. Ltd.

This report is issued by PhillipCapital (India) Pvt. Ltd., which is regulated by the SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd. References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for information purposes only, and neither the information contained herein, nor any opinion expressed should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives. The information and opinions contained in the report were considered by PCIPL to be valid when published. The report also contains information provided to PCIPL by third parties. The source of such information will usually be disclosed in the report. Whilst PCIPL has taken all reasonable steps to ensure that this information is correct, PCIPL does not offer any warranty as to the accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or her own risk and PCIPL does not accept any liability as a result. Securities and Derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily an indication of future performance.

This report does not regard the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realised. Under no circumstances can it be used or considered as an offer to sell or as a solicitation of any offer to buy or sell the

B (TP 1670) B (TP 1650)

N (TP 1720)

N (TP 1760) B (TP 2160)

B (TP 2160) B (TP 2160)

B (TP 2170) B (TP 2000)

B (TP 2330) B (TP 2330)

B (TP 2330)

B (TP 2330) B (TP 2360) B (TP 2300) B (TP 2450)

B (TP 2600) B (TP 2600)

B (TP 2800)

700

900

1100

1300

1500

1700

1900

2100

2300

2500

2700

A-18 M-18 J-18 A-18 O-18 D-18 J-19 M-19 A-19 J-19 J-19 S-19 N-19 D-19 F-20 M-20M-20 J-20 A-20 S-20 N-20 D-20 F-21

Page | 8 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

securities mentioned within it. The information contained in the research reports may have been taken from trade and statistical services and other sources, which PCIL believe is reliable. PhillipCapital (India) Pvt. Ltd. or any of its group/associate/affiliate companies do not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this date and are subject to change without notice.

Important: These disclosures and disclaimers must be read in conjunction with the research report of which it forms part. Receipt and use of the research report is subject to all aspects of these disclosures and disclaimers. Additional information about the issuers and securities discussed in this research report is available on request.

Certifications: The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the research analyst’s personal views about all of the subject issuers and/or securities, that the analyst(s) have no known conflict of interest and no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific views or recommendations contained in this research report.

Additional Disclosures of Interest: Unless specifically mentioned in Point No. 9 below: 1. The Research Analyst(s), PCIL, or its associates or relatives of the Research Analyst does not have any financial interest in the company(ies) covered in

this report. 2. The Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively do not hold more than 1% of the securities of the

company (ies)covered in this report as of the end of the month immediately preceding the distribution of the research report. 3. The Research Analyst, his/her associate, his/her relative, and PCIL, do not have any other material conflict of interest at the time of publication of this

research report. 4. The Research Analyst, PCIL, and its associates have not received compensation for investment banking or merchant banking or brokerage services or for

any other products or services from the company(ies) covered in this report, in the past twelve months. 5. The Research Analyst, PCIL or its associates have not managed or co-managed in the previous twelve months, a private or public offering of securities for

the company (ies) covered in this report. 6. PCIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party, in

connection with the research report. 7. The Research Analyst has not served as an Officer, Director, or employee of the company (ies) covered in the Research report. 8. The Research Analyst and PCIL has not been engaged in market making activity for the company(ies) covered in the Research report. 9. Details of PCIL, Research Analyst and its associates pertaining to the companies covered in the Research report:

Sr. no. Particulars Yes/No

1 Whether compensation has been received from the company(ies) covered in the Research report in the past 12 months for investment banking transaction by PCIL

No

2 Whether Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively hold more than 1% of the company(ies) covered in the Research report

No

3 Whether compensation has been received by PCIL or its associates from the company(ies) covered in the Research report No

4 PCIL or its affiliates have managed or co-managed in the previous twelve months a private or public offering of securities for the company(ies) covered in the Research report

No

5 Research Analyst, his associate, PCIL or its associates have received compensation for investment banking or merchant banking or brokerage services or for any other products or services from the company(ies) covered in the Research report, in the last twelve months

No

Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek compensation for investment banking services from the subject issuers in the next three (3) months. PhillipCapital (India) Pvt. Ltd is not a market maker in the securities mentioned in this research report, although it, or its affiliates/employees, may have positions in, purchase or sell, or be materially interested in any of the securities covered in the report.

Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or particular requirements of any individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors. Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal, tax and accounting considerations applicable to such investor and its own investment objectives or strategy, its financial situation and its investing experience. The value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic, or political factors. Past performance is not necessarily indicative of future performance or results.

Sources, Completeness and Accuracy: The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be reliable, but neither PCIPL nor the research analyst represents or guarantees that the information contained herein is accurate or complete and it should not be relied upon as such. Opinions expressed herein are current opinions as of the date appearing on this material, and are subject to change without notice. Furthermore, PCIPL is under no obligation to update or keep the information current. Without limiting any of the foregoing, in no event shall PCIL, any of its affiliates/employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind including but not limited to any direct or consequential loss or damage, however arising, from the use of this document.

Copyright: The copyright in this research report belongs exclusively to PCIPL. All rights are reserved. Any unauthorised use or disclosure is prohibited. No reprinting or reproduction, in whole or in part, is permitted without the PCIPL’s prior consent, except that a recipient may reprint it for internal circulation only and only if it is reprinted in its entirety.

Caution: Risk of loss in trading/investment can be substantial and even more than the amount / margin given by you. Investment in securities market are subject to market risks, you are requested to read all the related documents carefully before investing. You should carefully consider whether trading/investment is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. PhillipCapital and any of its employees, directors, associates, group entities, or affiliates shall not be liable for losses, if any, incurred by you. You are further cautioned that trading/investments in financial markets are subject to market risks and are advised to seek independent third party trading/investment advice outside PhillipCapital/group/associates/affiliates/directors/employees before and during your trading/investment. There is no guarantee/assurance as to returns or profits or capital protection or appreciation. PhillipCapital and any of its employees, directors, associates, and/or employees, directors, associates of PhillipCapital’s group entities or affiliates is not inducing you for trading/investing in the financial market(s). Trading/Investment decision is your sole responsibility. You must also read the Risk Disclosure Document and Do’s and Don’ts before investing.

Page | 9 | PHILLIPCAPITAL INDIA RESEARCH

HINDUSTAN UNILEVER LTD QUARTERLY UPDATE

Kindly note that past performance is not necessarily a guide to future performance.

For Detailed Disclaimer: Please visit our website www.phillipcapital.in IMPORTANT DISCLOSURES FOR U.S. PERSONS This research report is a product of PhillipCapital (India) Pvt. Ltd. which is the employer of the research analyst(s) who has prepared the research report. PhillipCapital (India) Pvt Ltd. is authorized to engage in securities activities in India. PHILLIPCAP is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not a Major Institutional Investor.

Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through Rosenblatt Securities Inc, 40 Wall Street 59th Floor, New York NY 10005, a registered broker dealer in the United States. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through PHILLIPCAP. Rosenblatt Securities Inc. accepts responsibility for the contents of this research report, subject to the terms set out below, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor.

The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority (“FINRA”) and may not be an associated person of Rosenblatt Securities Inc. and, therefore, may not be subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account. Ownership and Material Conflicts of Interest Rosenblatt Securities Inc. or its affiliates does not ‘beneficially own,’ as determined in accordance with Section 13(d) of the Exchange Act, 1% or more of any of the equity securities mentioned in the report. Rosenblatt Securities Inc, its affiliates and/or their respective officers, directors or employees may have interests, or long or short positions, and may at any time make purchases or sales as a principal or agent of the securities referred to herein. Rosenblatt Securities Inc. is not aware of any material conflict of interest as of the date of this publication Compensation and Investment Banking Activities Rosenblatt Securities Inc. or any affiliate has not managed or co-managed a public offering of securities for the subject company in the past 12 months, nor received compensation for investment banking services from the subject company in the past 12 months, neither does it or any affiliate expect to receive, or intends to seek compensation for investment banking services from the subject company in the next 3 months. Additional Disclosures This research report is for distribution only under such circumstances as may be permitted by applicable law. This research report has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient, even if sent only to a single recipient. This research report is not guaranteed to be a complete statement or summary of any securities, markets, reports or developments referred to in this research report. Neither PHILLIPCAP nor any of its directors, officers, employees or agents shall have any liability, however arising, for any error, inaccuracy or incompleteness of fact or opinion in this research report or lack of care in this research report’s preparation or publication, or any losses or damages which may arise from the use of this research report.

PHILLIPCAP may rely on information barriers, such as “Chinese Walls” to control the flow of information within the areas, units, divisions, groups, or affiliates of PHILLIPCAP.

Investing in any non-U.S. securities or related financial instruments (including ADRs) discussed in this research report may present certain risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on such non-U.S. securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in effect within the United States.

The value of any investment or income from any securities or related financial instruments discussed in this research report denominated in a currency other than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related financial instruments.

Past performance is not necessarily a guide to future performance and no representation or warranty, express or implied, is made by PHILLIPCAP with respect to future performance. Income from investments may fluctuate. The price or value of the investments to which this research report relates, either directly or indirectly, may fall or rise against the interest of investors. Any recommendation or opinion contained in this research report may become outdated as a consequence of changes in the environment in which the issuer of the securities under analysis operates, in addition to changes in the estimates and forecasts, assumptions and valuation methodology used herein.

No part of the content of this research report may be copied, forwarded or duplicated in any form or by any means without the prior written consent of PHILLIPCAP and PHILLIPCAP accepts no liability whatsoever for the actions of third parties in this respect.

PhillipCapital (India) Pvt. Ltd. Registered office: 18th floor, Urmi Estate, Ganpatrao Kadam Marg, Lower Parel (West), Mumbai – 400013, India.