HUL - 1QFY2014 Result Review - Angel Broking

For 1QFY2014 Hindustan Unilever's (HUL) bottom-line performance was in line with estimates. The company posted a net profit (before exceptional items) of Rs. 885cr (up 3.6% yoy). However, top-line growth at 7% was below estimates as domestic consumer business posted an underlying volume growth of 4% (vs. estimates of 5-6%). Pricing growth stood at a low 3% due to price deflation in soaps and pricing anniversary in detergents. Soaps and Detergent segment posted a 7.7% yoy growth in revenue, while Personal products posted a disappointing 2% yoy growth. The poor performance of the personal products segment was on account of de-growth in Fair and Lovely on a high base and slowdown in the mass skin whitening segment. Growth in Beverages segment stood at 15.8% yoy. OPM stood at 14.4% up 101bp on yoy basis aided by fall in raw material prices and lower other expenses.

We maintain a neutral rating on the stock.

Source : Equity Bulls

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