HUL - 4QFY2012 Result update - Angel Broking

HUL reported a strong set of numbers for the quarter. The company's top line grew by 15.7% yoy to Rs.5,660cr (Rs.4,894cr), in-line with our estimates. Net profit for the quarter grew by 20.6% yoy to Rs.687cr, above our estimates. We remain Neutral on the stock.

Key highlights during the quarter: HUL posted impressive top-line growth of 15.7% yoy, driven by healthy volume growth of 10%. Overall, domestic FMCG business grew by 23.4% yoy, aided by 23.6% yoy growth in the home and personal care (HPC) business and 17.3% yoy growth in the foods business. The soaps and detergent (S&D) segment posted strong revenue growth of 28.6% yoy. The personal products segment witnessed double-digit volume-led growth for the eleventh consecutive quarter. At the operating level, OPM expanded by 126bp yoy to 12.9% despite high inflation due to judicious pricing and tight cost management, thereby driving the company's cost efficiency.

Outlook and valuation: We expect HUL to post a ~16.1% CAGR in its top line over FY2012-14E, largely aided by steady performance of the company's personal care and foods division. In terms of earnings, we expect HUL to post a ~17.3% CAGR. At the CMP, the stock is trading at 26.5x FY2014E earnings. We maintain our Neutral view on the stock.

Source : Equity Bulls

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