HUL - Q3 FY13 Result Analysis - Microsec

Hindustan Unilever (HUL) announced its Q3 FY13 results on 22 Jan 2013.

The company's Total Income increased by 12% YOY to INR6655 crore YOY and its EBITDA increased by 12% YOY to INR1089 crore. EBITDA Margin of the company increased from 16.3% to 16.4% YOY but was below estimates. Volume Growth came at 5% which is way below estimates. Adjusted PAT (Excl EO) increased by 15% YOY to INR879 crore. PAT incl EO increased by 16% to INR871crore YOY.

Soaps and Detergent segment registered a growth of 20% with premium brands like'Surf' & 'Rin' delivering another quarter of double digit volume growth. Personal products and beverages grew 13% and 18% yoy respectively.

The company also announced a new royalty agreement with Anglo-Dutch parent Unilever Plc. As per the new agreement, HUL's royalty that it pays to Unilever will increase to 3.15 percent of turnover by March 2018, compared with 1.4 percent now. The company said that the royalty will increase in a phased manner, and for Feb 1, 2013-March 31, 2014 it will only be 0.5 percent higher. The news regarding the increase in royalty was un-expected.

At the CMP of INR480, we maintain Buy on the stock with our Price Target of INR676 for a period of 12 months-15months.

Source : Equity Bulls

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