Maintain 'Hold' on HUL - TP Rs.425 - Geojit BNP Paribas Financial Services

- 4QFY12 results are ahead of market expectations.

- Maintained strong volume growth of 10% yoy despite price hikes.

- Adjusted revenue increased 22% yoy primarily led by the Soaps and detergent segment's growth of 29% yoy.

- Operating margin improved 170 bps yoy to 14.7%.

- Adjusted PAT increased 32% yoy to Rs. 660 crore and ahead of analysts' estimates.

- Performance of Personal Products segment surprised positively with volume driven revenue growth of 17% yoy and margin improvement of 40bps qoq and 130bps yoy. Sales mix in the Soaps and Detergent segment was encouraging and helped to mitigate commodity cost pressures.

- Food business was a little bit disappointing with growth slipping to single digit.

- Stock valuation is at premium but consistent performance justifies premium valuation.

- Maintain 'hold' rating with a target price of Rs.425.

Source : Equity Bulls

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