Hindustan Unilever - Use a magnifying glass; Retain REDUCE - Emkay

Reco: REDUCE
CMP: Rs 497
Target Price: Rs 440

- Optically, HUL's Q4FY13 performance beats forecasts with UVG of 6.3% yoy and Apat growth of 14.7% yoy to Rs7.9 bn. Volume beats forecasts by 1% and Apat by 7%

- Quality of performance is weak as earnings beat is a function of cyclical drivers in S&D & Beverages segment rather then marked improvement in growth trajectory

- HUL remains on weak wicket; Soaps faces deflation, Laundry facing competition and PP impacted by lower discretionary spends; Catalysts not in sight

- Just 1% upgrade to FY14E/15E earnings; There is optimism in FY14E earnings; Retain REDUCE rating.

Source : Equity Bulls

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