Morgan Stanley downgrades HUL to Underweight

Morgan Stanley has downgraded its rating on Hindustan Unilever (HUL) to Underweight from the current Equal-weight rating in its recent research report dated January 23, 2013.

The research firm noted that, both tax rate and royalty payments to Unilever are jumping which will lead to an increase of just 6% CAGR in FY13-FY15 earnings.

The research firm has suggested a switch to Over weight rated Dabur and ITC, as risk-reward is unfavorable in HUL which is currently at a P/E of 28x on FY15e.

Source : Equity Bulls

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