Hindustan Unilever - March 2013 Results Preview - Motilal Oswal

- We expect HUL to post 5-5.5% volume growth and 10% revenue growth. Consumer demand continues to remain subdued in HPC for HUL, as per our channel checks.

- We note that soaps can likely have a price deflation due to fading impact of FY12 price hikes and aggressive promotions/grammage increase undertaken to drive volumes.

- Fair & Lovely has not yet recovered from the pricing transition and will likely drag personal care performance.

- Discretionary PP and foods continue to remain under pressure.

- Expect margin expansion of 40bp to 14.9% led by higher gross margin. 4QFY13 will be the first quarter factoring a higher royalty impact (~10bp).

- The stock trades at 29.4x FY14E EPS and 26.8x FY15E EPS. Neutral.

Source : Equity Bulls

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