Hindustan Unilever - Bleak performance in growing segments... - ICICIdirect

Hindustan Unilever's (HUL) results were below our expectation reporting the slowest volume growth in 12 quarters at ~5% and sales growth and earnings growth of 9.9% and 15.5%, respectively (I-direct estimates: 14.5% and 23%, respectively). However, margins at 16.4% were in line with our estimates.

Further, the company's announcement to increase royalty from 1.4% of sales currently to 3.15% by FY18E (in a phased manner) would impact the margin growth, going ahead.

We downgrade our target price to Rs.456/share valuing at 26x FY15E EPS.

Source : Equity Bulls

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