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The absurdly of the markets

Market cap of HUL today is at GBP57bn
Unilever today is GBP 108 bn. While Profits of Unilever is ~10x HUL

Just crazy! India's own tulip mania!

@contrarianEPS
@shyamsek
At 14% CAGR profit growth it will take them ~18 years to reach Unilever Profits.

At Unilever's valuation today it will yield roughly 4% p.a

At 2x - 8% p.a.

It will need 4x Unilever valuation today to generate a respectable 12% CAGR

@dmuthuk @unseenvalue
Can I make 14% CAGR from HUL over the next 10 - 20 year.

Possible. But will I bet my retirement money on it. Absolutely no!
Anyone who like this space should rather buy Unilever or Coke or Pepsi or Diageo or Ab Inbev (leveraged though) or Nestle Gloabal
Owning HUL today is like playing Russian Roulette with a gun with 5/6 bullets loaded.
Between '96-2000 HUL price went up 5-6x. It broke that level conclusively in '11. Between '11 -'20 the price has been 8x.
While business of the company hasn't been that volatile over the last 25 years.

History doesn't repeat but often rhymes. Between 2020-2030 ???
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Un-common sense
@Random_Gyan
1/N
ITC Snapshot

For co's with stable cash flows (pricing power), starting PE is the biggest driver of future returns. Notice how between '92-'97 negative returns despite 25% p.a. profit Growth. Reverse was true between 2002-07. 27% p.a. returns despite 18% p.a. PAT growth Image
2/N
My speculation over the next 5-10 yrs

1. Cig+Hotels div profits grows 7% - 10% p.a.
2. FMCG profits to see J curve. Rev expectation of 50k - 70K with 10 -15% PAT margins (Management goal 1Lakh cr rev by '30)
3. Range of outcoumes from 25K (no FMCG J curve) - 40K profits
3/N
4. Dividend Payout ratio to remain 80-85%
5. Exit PE between 15x - 30x
6. Entry price of 180/- (Div of 9/- in May'20)

The Net results is as follows Image
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